alt Hacker NewsYou've got that backwards. Liquidation preferences typically go to early stage investors who receive special share classes. Those arrangements are fully disclosed to later stage investors. They knew what they were getting into and it's their own fault for making a sucker bet.
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lmeyerov • yesterday at 8:14 PM
New funding round investors generally get seniority over old
But new money may allow buyouts of existing at that time so early team or investors can cash out a bit early
And common doesn't cash out till IPO or private market equivalent, or yes, gets screwed
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Not true (newer investors generally get seniority), but more importantly this is about common shareholders (generally employees and even founders) who never have the opportunity to get liq pref.