[aneesh]

How did preferences make it worse? Generally, preferred shares convert to common in the event of an IPO, so preferences are discarded.

[smileysteve]

> With Square, investors were guaranteed a 20 percent premium on their investment, which would be worth $18.56 a share, meaning Square had to issue more shares to those investors, further devaluing the stock owned by employees.

http://www.bloomberg.com/news/articles/2015-11-19/square-emp...