[amtab]

True, but the risk profile for a late-state venture investor and an investor in public markets are very different. Let's say a company's valuation starts at 2 billion and drops to 200 million at some later date. If someone invested 100 million at 2 billion valuation, their losses from that value drop are very different. The private investor with downside protection due to liquidation preference gets their 100 million back, while the investor in public markets would get back only about 10 million. Late stage investments, such as those in Snapchat, are essentially bets that the value of the company at exit will not be below the value of the round in which they are investing.