This is a true and important point from the new investors' perspective. However, it is also the case that the insiders, taking the dilution and granting the pre

This is a true and important point from the new investors' perspective. However, it is also the case that the insiders, taking the dilution and granting the preferences, believe a greater-than-$17B whole-enterprise valuation is attainable or even likely. That is, they are committing to take an extra dilutive hit for any exit less than $17B, but they expect, especially with the new capital, that won't happen, and that instead, the investors will wind up converting to common at IPO/etc. And, since the insiders know the business better than anyone, that revealed valuation should also have some weight.