How do private tech start-ups deal with competitive investments, either direct or publicly-traded, by their execs and employees? Are there any standard or recommended policies regarding such investments?

Assuming that most of the executives would have employment agreements or at least, on-competition contracts, most of them include provisions that prohibit working, consulting and advisory role, owning <5% or more of investments in any competitive organization. It usually indicates that any external activities can not detract from their corporate responsibilities. Other prohibitions and ethics policies should preclude any related issues. Given the recent outcry on executive excesses and the need for transparency, we expect there may be new and more encompassing legislation forthcoming.