> huh? and how exactly would they do that in a legal way? Simple: The acquiring company turns to the VCs and says "If you want the acquisition to happen, you

> huh? and how exactly would they do that in a legal way? Simple: The acquiring company turns to the VCs and says "If you want the acquisition to happen, you are going to waive your liquidity pref". It's not complicated. And as for "legal", contracts are renegotiated all the time. You might in fact argue that the liquidity pref is put in as a throwaway, since it is rare that they are ever exercised.