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Is there a recursive model that explains why later investors have senior preferences?
by sukilot 12y ago
Is there a recursive model that explains why later investors have senior preferences?
- vidarh 12y agoIt's simply about (real or perceived) risks. A senior liquidation preference is a way of mitigating risk for later investors by increasing the chance they can get a return on their investment, or at least their money back in the event things doesn't do great, while giving up less upside potential for earlier investors if things does go great.