[sx]

I am an entrepreneur myself and I think an 1x liquidation preference makes sense. You cannot get X dollars at a 3X valuation and then turn around and sell the company for X keeping 2/3 of X and only giving 1/3 of X to the investor.

I think what most people disagree with are the 2x and 3x liquidation preference terms that are not uncommon in term sheets. They are a very effective way, for the investors, to push the founders to a more risky / bigger potential path so that they can also make money. This works well in the context of the VC model (for the VCs).