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> Someone with 'preferred' shares gets their money back first, sure, but someone with an 'option' never even has to put their money in the first place. That’s
by bradleyjg 7y ago
> Someone with 'preferred' shares gets their money back first, sure, but someone with an 'option' never even has to put their money in the first place.
That’s not true. They are paid for at very high opportunity costs.
- alecbenzer 7y agoYes but the context here is liquid investment, which is what preferred stock are meant to be a defense for (at least according to what I've heard). (The opportunity cost is also paid slowly over years; I think VCs get better terms in part for front-loading all the money.)