Participating and non-participating liquidation preferences can lead to very different exit outcomes, particularly in mid-range exits where structure matters more than headline valuation.

Liquidation preferences determine who gets paid first on an exit, and why headline valuation does not always translate into proportionate returns.

Valuation caps and discounts quietly shape how equity is allocated when a convertible note converts, often in ways founders only appreciate much later.

Anti-dilution clauses are often overlooked at the start of a funding journey, but they shape outcomes most when valuations fall and leverage disappears.