• Paddy Power Betfair is acquiring fantasy sports company FanDuel.
  • FanDuel was valued at $1 billion just three years ago. Now, the company is being sold for less than half that amount.
  • According to documents that detail the deal's specifics, FanDuel's original founders might not make any money from the sale.

Selling a company is usually cause for celebration, but for the founders of fantasy sports company FanDuel, the moment is likely to be bittersweet.

The nine-year-old company, which was once one of Britain's most closely watched startups, was said to be valued at over $1 billion just three years ago. Now, it's valued at less than half that amount by the company that's buying it, Dublin-based bookmaker Paddy Power Betfair.

FanDuel's founders' loss is a classic case of the dangers of a sky-high valuation, in which the founders' original shares are so diluted that their original involvement reaps little compensation when it comes time to sell the company.

The biggest winners of FanDuel's sell? The company's current executives, who are set up to make at least a few million dollars a piece.