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Nothing you said here is wrong, but it also doesn't explain how likely or not employees with those common shares will have made money. Having been on both sides of these transactions, I think it's likely that they made very little on their vested shares, but they likely will have been given new hire packages with Atlassian that will be worth something (RSUs vs options).

Why do I think they didn't make much from vested shares? Simple preference math. While I don't know Loom's cap table, or how each round was structured, I think we can all agree that they gave shares to investors that at least had 1X preference. Given that the sale happened at a substantial discount to their last round valuation, it's likely that preferences ate up most if not all of the proceeds of the deal. There may have been a sweetener of some sort offered to the leadership team, and that may have been distributed to all existing employees, but that would have been independent of the cap table (they're not going to give a package to departed employees that exercised options).

Most employees probably made some money, just not very much.

Early employees would be lucky to get options worth 10-20bps of the company, so assuming $800M was distributed to shareholders after accounting for 1x liquidation preference that might only be $800k-$1.6M before accounting for dilution for the very earliest employees, and a lot less for everyone else.

Yes. For instance, at an early stage company I co-founded, we saw 409A of 10% of the most recent priced round.

yes, this is very much stage-specific

by the time of these $100M+ rounds for $1B unicorns to hire a lot of people, the 90% discount is long gone

It might not be a 90% discount but it still will be a >50% discount

for companies raising 9 figure later-stage rounds? that's not obvious to me

and relevant to this case, often the investor will do a higher valuation (artificially minting a unicorn etc) for optics/vanity reasons, which eats an additional 1+ years of future growth, eliminating the relevance of a discount here

and for folks who many not have followed terms above: investors get preferred shares, with rights over these discounted common shares. These include things like veto rights over acquisitions, first money out ("if $200M raised, no one else sees any $ until that $200M is paid back"), and for high-valuation unicorn rounds, often something like a participation multiple ("guaranteed extra $100M profit, so no one sees anything till $300M paid"), high interest rate on convertible debt portions, etc. So beyond the obvious dilution hit of new investors, there are a lot of these gotchas that trade a bigger bank account for heightened exit value risks to employees.

The people who come up with 409a prices have every incentive to make it as low as possible provided it is somewhat defensible to the IRS.

I assure you they can get more creative than saying that the last preferred price was at $X, therefore our hands are tied and the common must be close to that. They can take into consideration the preferred preferences, the current state of the business, the time since the last round, etc. For example, the 409a value can keep going down and down if the value of the business is (defensibly) going down and down, regardless of the last fundraising round.

This is a thing I'd love to see data for - the strike price discount at time of acquisition for later-stage companies. These same companies in that megaround companies probably have stock on secondary markets, which might be a good proxy for some of this.

And totally agree wrt creative arguments being viable... Just not clear what ends up happening in practice. Ex: I can imagine a split between paper unicorns vs ones w revenue backing it up being closer to market, and those later ones often switching to RSUs. So genuine curiosity here.

Totally, I am sad to say my companies have never reached a 100MM round, so I wouldn’t know.