The article makes it sound like a liquidation preference is some new phenomenon that explains the recent surge of ostensible $1B valuations. In fact this has been a standard deal term since the 90s.
The fact that liquidation preference has been standard in term sheets for decades mean that its advent cannot have caused the recent inflated valuations. But the way that VCs are employing liquidation preference may have changed. For example, the liquidation-preference term may have increased in importance if IPOs are becoming less common relative to other liquidation events or if out-of-control valuations mean that liquidation-preference is a more important form of protection than it used to be.
I agree with you. My argument was against altogether discouting Liquidation Preference as a suspect in higher evaluation by stating its existence in '90s.
