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Venture-Capital
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A company sold for $60 million. The founders got zero. Not because the deal was bad. Because of where they sat in the waterfall. The VCs held preferred stock with liquidation preferences. They get paid first when a company sells. By the time the proceeds reached the founders and common stockholders, there was nothing left. And when the founders sued, the court ruled the deal was fair. Zero was the fair value of their shares given the structure in place. Here's the mechanism that made it airtight
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