If the valuation of the company is higher than the VCs invested at (post-money), then assuming something screwy isn't going on with the pref structures in earli

If the valuation of the company is higher than the VCs invested at (post-money), then assuming something screwy isn't going on with the pref structures in earlier rounds - ie, there aren't any or they're 1x non-participating, plus the round you're investing in isn't a down round - then they will. Basically post-money valuation, exit price and pref structures are the only important numbers here. 1x non-participating means all investors get their money back, so as long as every round was an up round and the exit is above the last round post-money, everyone will do better by converting to common and taking their share rather than their pref right.