> In the last year, we have seen, on more than one occasion, a behavior among later-stage VCs that we’ve rarely observed in the years before
Which seems to imply it's not a common practice. As I mentioned, it's 100% theoretically possible to do it, but the percent of companies that actually do it is very low.
It would be not only bad for early employees, but also bad for early investors - it would hurt the founders reputation among their early investors (and employees) which most founders wouldn't be willing to do.
Your points about why this is bad are entirely correct.
But founders with shareholding may (do) work with later investors to their joint benefit, screwing over other early shareholders or investors.
With VC money holding shares already, that is not so likely to happen - unless it is the VC buying-in more equity.
However, smaller enterprises with startup beginnings are very likely to follow this pattern, as later investors (and perhaps greedy founders) do not care about those that came before.
