[arjunnarayan]

> However, if investors are buying 70M shares at $1 each, it implies that they believe a share of the company is worth that much.

Well, you need to unpack what "worth" means in that above sentence. If you're using some kind of probability distribution over expected future outcomes (say, using some present value future discounted cashflow model with a probability distribution of possible future cashflows), you can see that there are all these possible future worlds that Stripe can inhabit. In some of these, Stripe is making lots of money, and so the stock is "worth" a lot. In some of these, Stripe is crashing and burning. In those worlds, common stock is worthless. But the preferred stock isn't as badly off due to the 1x (or higher) liquidation preference, and the other terms. So the expected value of the preferred stock across all these worlds is higher than that of common, and imputing its value over common doesn't quite make sense.

[vikramhaer]

Agreed, that's why I've always thought of it as an implied valuation. Investors are going into it expecting upside, and the terms allow them to have a floor (regardless of what happens with common/ prior rounds), but I don't think they would make the investment if they felt an acquisition/ IPO/ other liquidity event would value each share of the company at less than what they paid for it. I don't think its unreasonable to use this to get to an implied total valuation.