Paleobiologists have long sought to explain how alternative modes of speciation, including budding and bifurcating cladogenesis, shape patterns of evolution. Methods introduced over the past decade have paved the way for a renewed enthusiasm for exploring modes of speciation in the fossil record. However, the field does not yet have a strong intuition for how ancestor-descendant relationships, especially those that arise from budding speciation, might influence the shape of trees reconstructed for fossil or living clades. We developed a simulation approach based on classic paleobiological theory to ask what proportion of ancestral nodes in paleontological phylogenies are expected to correspond to sampled taxa under a range of preservational regimes. We compared our simulated results to empirical estimates of absolute fossil record completeness gathered from the literature and found that many fossilized clades of marine invertebrates are likely to display upwards of 80% sampled ancestors. Under a primarily budding model, phylogenies where 100% of the internal nodes correspond to named species are very possible for well-sampled clades at local and regional scales. We also leveraged our simulation approach to ask how budding might shape extant clades. We found that the ancestral signature of budding causes rampant hard polytomies (i.e., multifurcations), greatly impacting the shape of extant clades. Our results highlight how budding can yield dramatic and unrecognized effects on phylogenetic reconstruction of clades of both living and extinct organisms.