Yep, https://medium.com/@CharlesYu/the-ultimate-guide-to-liquidation-preferences-478dda9f9332 https://medium.com/@CharlesYu/the-ultimate-guide-to-liquidat... is

Yep, https://medium.com/@CharlesYu/the-ultimate-guide-to-liquidation-preferences-478dda9f9332 https://medium.com/@CharlesYu/the-ultimate-guide-to-liquidat... is a decent overview. An oversimplified scenario might be that if a VC invests $25mm at a pre-money $100mm valuation with a 2x liquidation preference, and the company eventually sells for say $60mm (or raises money in a down round at that valuation, which doesn't bode well for a sale price much greater than that)... then the VC would get $50mm before any other investors, including founders, could split the remaining $10mm. What was once a 20% share of the company given to that VC balloons to a 5/6 share of the company. Not fun for founders and early investors.