My impressions is that late stage investors generally have lots of protection here, so that the company is forced to IPO by certain dates to avoid penalties, and if the IPO isn't at an agreed upon number, the company gives more shares to the investor to make up for it. IIRC square had such a clause, although I don't know how that turned out.

Picking the winners isn't so hard if you can protect your investment like this. The lower bounds on their expected returns isn't $0.