CMV : ESOPs of most startups are worthless for employees

I am currently reading Venture Deals by Brad Feld and Jason Mendelson.
Unless a startup is going to IPO in an year or so, those ESOPs are worthless. In the book, it has been mentioned that investors get preference shares while employees get ESOPs, which are common shares. There are several ways in which your ESOPs are made worthless:

• Mostly those preference shares have participating liquidation preference, at ~1-2x. For example: If a VC invests $10 million for 40% of the company, ESOPs are worth 20% and founders have 40%, then:
  • If the startup is sold for less than 2x ie. $20 million, VC gets all the money and the employees get nothing.
  • If the startup is sold for more than 2x, lets say $30 million, VC gets $20 million + 40% of remaining $10 million ie. $4 million. VC gets $24 million in total. Founder gets 40% of $10 million = $4 million. The employees get 20% of $10 million = $2 million.
• VCs normally get anti-dilution protection in case of down round. This anti-dilution clause will directly dilute ESOPs and founder shares even further.
• VCs get drag-along rights. When a startup is getting sold for less than the liquidation preference, VC can exercise his drag-along rights (if in majority) and make the founder and ESOP holders vote in favour of selling the company, even though the ESOP holders won't get anything.

These are some points from just 2 chapters of the book. The book has 19 chapters. Here are real world examples of the above things in action:

• Founders and employees of Truepill got $0 even after a $525 million accuisition.
• Employees of Eero got $0 even after a $97 million acquisition.
• Founders and employees of FanDuel got $0 even after a $465 million exit.

This might be the reason why we see popular founders working on their 2nd/3rd startup, even after a successful previous multi-million dollar exit. They might not have got any substantial exit from their previous startups. They won't be able to discuss such things in public due to non-disclosure agreements.

Mind you these are the stories of startups that got acquired. Startup returns typically follow the power law ie. 2-5% of startups are responsible for majority of returns, all other startups fail. So, not only your startup needs to get acquired, it needs an acquisition amount significanctly greater than the liquidation preference. The other option is an IPO. This is the only legit way for employees to mint wealth since preference shares get converted to common shares before an IPO, so no liquidation preferences here.

So the best option for both founders and employees is to either not have a VC altogether, which means bootstrapping. In that case, everyone will get money on a pro-rata basis after an acquisition. The other option is an IPO, in which everyone gets wealthy.