This is somewhere the reality distortion field hits hard. I have even heard "we are about to raise at an $X valuation, we'll offer you options at that price." W

This is somewhere the reality distortion field hits hard. I have even heard "we are about to raise at an $X valuation, we'll offer you options at that price." When you sit them down and explain that those investors are getting preferred shares, which have some measure of protection against bankruptcy, and that the common stock is not worth nearly that much without the insurance, it (in my experience) enrages startup people. Many of them won't show their cap table or even discuss their past fundraising terms.