Good questions… Scenario 1 is $300mm pre, $700mm in investment, $1bln post. If there’s are strong preference rights, you need a multi billion dollar exit for e

Good questions… Scenario 1 is $300mm pre, $700mm in investment, $1bln post. If there’s are strong preference rights, you need a multi billion dollar exit for employees to get anything. PE vs VC isn’t binary, it’s a spectrum. VC firms generally don’t care about so-so outcomes. So they give up downside protection for upside. (They give up preferences to get a higher share of the company, which reduces valuation) On the flip side, PE firms are trying to make as return on every investment. So they’re ok with crazy high valuations as long as they get liquidity preferences. Which means in so-so exits they get most of the money.