For example, the investor director a VC appoints to a board does not generally get any stock options - just a fee for attending board meetings (generally paid to the VC firm, not the individual). It also feels unlikely that a VC today would appoint their own CEO - it does happen, but it is far more likely that they would either back the existing management team or not invest at all, such is their view of how critical the team's quality is to the company's prospects.
The author also describes the VC and its appointed CEO taking ~75% of the company. I've never seen anything like that happen - investors usually end up with about ~30% stake, regardless of what funding phase you are at.
The paragraph about the 'down round' scenario is bizarre. There would need to have been serious failures in the company's/founder's legal work to allow this type of retrospective revaluation to occur. I've never heard of anything like this.
I guess the reason for these oddities is because the landscape was very different in 2001, when we were just emerging from the dot com boom, but I'm not sure. Can anyone else comment?
Anyway, overall it's a really good article, and the final parts ('Fixing the problem') was pretty insightful, since things like this have actually happened since then.