[redwood]

This is not the whole story. While there may be some value in terms of marketing to claim a higher valuation there are also many downsides to a higher valuation which in turn for example leads to a higher fair market value that makes executing stock options on a private company extraordinarily costly from a tax perspective. Admittedly the holders of the preferred stock like investors might not have the same incentives as the people who are given stock options but their interests are largely aligned in that they're both interester in retaining great talent and making the company successful (eg valuation higher) but later