[nradov]

You've got that backwards. Liquidation preferences typically go to early stage investors who receive special share classes. Those arrangements are fully disclosed to later stage investors. They knew what they were getting into and it's their own fault for making a sucker bet.

[mgfist]

Not true (newer investors generally get seniority), but more importantly this is about common shareholders (generally employees and even founders) who never have the opportunity to get liq pref.

[XCabbage]

More importantly, employees with options are generally not sophisticated enough to realise liquidation preferences may exist and may dramatically devalue the common stock options they have, and even if they are sophisticated enough, they will often have no means to find out what liquidation preferences exist. (They theoretically have information rights that probably entitle them to that info, but companies simply find spurious excuses to refuse books and records requests, knowing no options holder is going to drop six figures on a lawsuit to exercise those information rights.)

[lmeyerov]

New funding round investors generally get seniority over old

But new money may allow buyouts of existing at that time so early team or investors can cash out a bit early

And common doesn't cash out till IPO or private market equivalent, or yes, gets screwed

[intrasight]

> About 200,000 people put money into the scheme, which offered a stake in the company, discounts and perks.

Hopefully they took advantage of the discounted beer.