Not really. A liquidation preference is worth something, so if you really didn't want to give on, you could give up more equity. But as Fred Wilson once pointe

Not really. A liquidation preference is worth something, so if you really didn't want to give on, you could give up more equity. But as Fred Wilson once pointed out, it's a great way to handle a situation where the founder thinks the company is worth way more than the VC does. If the founder is right, the VC owns less stock than they otherwise would have; if the VC is right, and the company is bought for a low valuation, the VC gets a higher percentage of the payout. Essentially, a liquidation preference can give you "conditional equity"--the founders own, say, 50% of the company if it's sold for a small amount, and 80% if it's sold for a large amount.