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Thanks. It would seem like a 0x liquidation preference would provide protection in this scenario. i.e. VC is guaranteed to get his original investment back,

Thanks. It would seem like a 0x liquidation preference would provide protection in this scenario. i.e. VC is guaranteed to get his original investment back, but not a multiple of it. "Say the VC puts in 5M, gets 20% equity. The founder sells for 5M" VC could just get the 5M back in this case.

auganov 12y ago
This is exactly what 1x non-participating liquidation preference is. The 1x is 1x of the invested amount, not a profit multiplier. https://vcexperts.com/buzz_articles/185 https://vcexperts.com/buzz_articles/185