It feels sneaky because in these deals someone always seems to get rich except those who who were teased into investing their time (employees with “equity”) or invested with small-money (stockholders) rather than big-money (VCs, banks). I have no idea about the particulars of this deal, so maybe no individual got rich off the deal, and VCs/banks only recouped a portion of their investment. But in my experience, usually a failure still sends up as a success for those who are in a position to negotiate a deal. In other words, Nvidia didn’t do this deal out of the kindness of their hearts — there was still something of value to them that they paid for, and I’d be quite surprised if the board of 3dfx didn’t find a way to capture some of that value personally. Saying that “creditors get paid before shareholders” doesn’t capture the full story of most of these sales, where some equity owners are special and some aren’t.