Here are a couple ways that common stock can become worthless: - The most obvious and common, the company fails / does not exit - The company raises money and the investors have liquidation preferences. This means that the investor is guaranteed to make 3 times what they put in when the company is acquired. So, for example, if you raise 10 million dollars and your investors have 3x liquidation preferences, you have to sell the company for over 30 million before common shareholders see any money at all. So in this situation (and it is common), the common stock is essentially worthless.