If I invest X money at Y 'valuation', but I get more than just stock such as liquidation preferences, then the stock alone it's not actually worth X money. Or if you prefer my stock + what else I get is worth X money, but the other shareholders lost something of value.
Thus the company is not actually worth Y valuation and pretending otherwise ignores the terms of the deal.
EX: If the company is nominally worth 1 billion at the time of investment, and later sold for 900 million the last investor may actually have profited via money that early investors never received.
Thus the company is not actually worth Y valuation and pretending otherwise ignores the terms of the deal.
EX: If the company is nominally worth 1 billion at the time of investment, and later sold for 900 million the last investor may actually have profited via money that early investors never received.
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