Being a founder, I tend to always take the founders' side, but even with that bias, I'm not sure there's anything wrong here. It sounds like things went to hell, the founders left, and a new CEO came in who used to be an exec with one of the VC firms. Things were very messy. Complicating matters, it doesn't sound like FanDuel was in great financial shape - a Forbes article suggested they could face a cash crunch in 2018.

With what I know, it's hard to attribute anything the VC firms did to malice.

Isn't that a bit like asking why they sold for $465M instead of demanding $930M? Presumably, they sold for the highest amount they could get. If the company falls off the hockey stick, there may be no better time than right now to sell it for what you can get.

$465M was right at the point where investors still got ROI while investors got nothing. It’s not like they took a loss. If I were a founder I would be beyond pissed that the investors sold right in the band where they made money but not the founders and employees. Granted, I don’t know the exact terms of their contract nor the full context

Alternative explanation is that the company was already sinking. It had dropped past the point where founders and employees were going to get anything out of the deal and was started to approach the point where investors would lose money. Investors stepped in at this point and dumped the company to prevent an even bigger loss. It is unlikely the investors were waiting around for the valuation to drop to this point for the sole purpose of screwing the other parties.

I understand what you're saying - if I was the founder here, I might be pretty pissed off too. But, I balance that with the knowledge that this company got very messy, and as founder, one of my jobs is to keep things from ever getting that messy.