$500M exits where founders got nothing: the liquidation preference trap
MatthewChang · x · 2026-10-21
Investor Matthew Chang on why he backs HELOC founders and warns about dilution: common shareholders in VC-backed companies get crushed as early investors stack liquidation preferences and later rounds enter at inflated valuations while burning cash. He's seen $500M+ exits where founders barely got paid, employees got nothing, and VCs got made whole. His advice: blame the unsustainable structure, not the buyer — play a game aligned with your interests.
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