3 ms·
Liquidation preferences go away at an IPO because the preferred shares convert to common.
by kijiki 7y ago
Liquidation preferences go away at an IPO because the preferred shares convert to common.
- sjg007 7y agoRight, but if the value was $42 a share at IPO and that is less than what the late stage investors expected, then why would they sign off on the IPO without extra shares being issued?
- sk5t 7y agoThe late investors aren't forced to liquidate and any liquidation preference is extinguished at IPO... the terms of the IPO having been properly authorized, the formerly-preferred holders simply have no special say in the matter anymore.