4 ms·
I think he's saying that the valuation would be lower if the liquidation preference were lower. This makes sense since a higher liquidation preference reduces t
by vecter 8y ago
I think he's saying that the valuation would be lower if the liquidation preference were lower. This makes sense since a higher liquidation preference reduces the risk of the investment, thus allowing you to grant a higher valuation.
- mbesto 8y agoExactly. This basically makes later stage investments risk-free (nothing is risk free, but you get my point) while pushing all of the risk to the founders and employees.