Just thought I'd point out that the example given doesn't tell us anything about liquidation preferences (though of course you can assume they would be involved

Just thought I'd point out that the example given doesn't tell us anything about liquidation preferences (though of course you can assume they would be involved, since we're talking VCs here, but they don't matter). The relevant financing term here is anti-dilution. Here's Feld: http://www.feld.com/archives/2005/03/term-sheet-anti-dilution.html http://www.feld.com/archives/2005/03/term-sheet-anti-dilutio....