Does that include non-key employees like programmers, etc? One of my wife's friends cofounded a company (one you would know) that got sold. He had left years ago but couldn't cash out until then. They were relatively cash poor and income poor but were worth a lot in paper - that there was likely a buyer for.
Operating a venture based on unrealistic prospects or ideas/concepts/products that would not sell is one thing but at least they are operating a business set out to make money and some businesses fail and some succeed that's the nature of the beast and the risk that everybody who invest in businesses would have to take. What I am concerned about are those businesses who were set out to just defraud investors with elaborate schemes disguised as legitimate business ventures but never had any intention of making money but make away with people's money and also those Enron-like companies that knowing their businesses are failing choose to cook the books to hide the losses and exaggerate the gains to continue to extract or keep those mom and pop investors' money. There is a reason why mom and pop investors were barred from private investment. It's not really because of the inherent high risk of the investment because face it, penny stocks are lot more risky or as risky and yet anybody is allowed to invest in those. No the reason why private investment had been barred from mom and pop investors is really the high incidence of fraud in private investment due to the lack of opportunity or means for closer scrutiny and lack of recourse against them when fraud did happen and the SEC still hasn't come up with effective means to curtail fraud and/or to protect investors and now they want to open this segment. It's like opening a zoo to spectators with animals not in their enclosures and telling the spectators it's exciting you will get higher reward being with animals so up close and personal. SEC has even failed in regulating investments where there are regulations in place and now they want to open up investments to the public when there is no regulations.