You are completely missing the plot. First, forget liquidation preferences. $20 million is a drop in the bucket to Kleiner. This funding is not concerned with

You are completely missing the plot. First, forget liquidation preferences. $20 million is a drop in the bucket to Kleiner. This funding is not concerned with downside; as the post clearly explains, it's designed to manufacture leverage to the upside. Note that leverage isn't exclusive to Snapchat; the name of the game is perpetuating and promoting the market dynamic of arguably insane valuations. Second, if this was convertible debt, it wouldn't be pegged to a valuation. The use of late stage convertible debt is typical when the funding would be dilutive and the company needs a bridge to its next round of funding. You often see existing (and not new) investors do late stage convertible deals because they're less concerned with valuation and maximizing their stake. Kleiner, as far as I know, is a new investor in Snapchat, and having raised well over $100 million in the past year and a half, I doubt very much that Snapchat needs a bridge.