One thing I read that isn&#x27;t often mentioned is how liquidation preference for late rounds can drive a lot of these insane valuations.<p>For example, let&#x27;s say you raise $250MM in a series E at a 10B post money. As a company&#x2F;founder, this makes you look awesome on paper and super valuable as a company. Meanwhile, the series E investors usually have the top priority for liquidation, meaning the risk is actually pretty small, since the sale&#x2F;IPO value would have to go below 250MM before you lose money.<p>The real people getting screwed by these paper unicorns though are the late stage employees being sold options as compensation.