Liquidation preference means they are preferred when there is a liquidation. So if the company is sold the person with the liquidation preference gets their mo

Liquidation preference means they are preferred when there is a liquidation. So if the company is sold the person with the liquidation preference gets their money out first at the liquidation preference ratio. In this case, $2Mx2 means if the company is sold for $10M even though they only own 10% they get the first $4M. http://www.investopedia.com/terms/l/liquidation-preference.asp http://www.investopedia.com/terms/l/liquidation-preference.a...