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> Just raised a seed on convertible notes, was never asked for any kind of preference

Notes are debt. They're inherently higher than stock on the capital structure. They may convert into shares with no preference. But as long as they're notes, they're higher than even preferences shares.



Sure but those preferences only really affect equity payouts when the company’s in distress.

When selling the a non-distressed company, equity will receive cash.


> those preferences only really affect equity payouts when the company’s in distress

Liquidation preferences and bankruptcy priority only matter when a company is distressed.


Is it not possible to sell a company that is currently profitable, cash flow positive, and is worth less than what investors had put in?




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