>> You can no more declare that investors shouldn't have liquidation preferences ... Not suggesting that. In fact, I have no objection to any clauses or terms

>> You can no more declare that investors shouldn't have liquidation preferences ... Not suggesting that. In fact, I have no objection to any clauses or terms that are negotiated in the original funding, although employees don't always have access to the terms in these agreements. However, these negotiated terms merely form an upper bound to what employees actually get. There are a variety of situations in which the investors end up with more than the original agreement would suggest, and employees end up with less. Some of them are discussed here: http://news.ycombinator.com/item?id=2958766 http://news.ycombinator.com/item?id=2958766 Founders sometimes end up with an outcome similar to the investors, but more often an outcome similar to the employees. Employees expect that their interests are aligned with the founders, and that founders will protect them, but this is not always the case.