The fact that liquidation preference has been standard in term sheets for decades mean that its advent cannot have caused the recent inflated valuations. But th

The fact that liquidation preference has been standard in term sheets for decades mean that its advent cannot have caused the recent inflated valuations. But the way that VCs are employing liquidation preference may have changed. For example, the liquidation-preference term may have increased in importance if IPOs are becoming less common relative to other liquidation events or if out-of-control valuations mean that liquidation-preference is a more important form of protection than it used to be.