Thanks Eloise, really great article. Definitely agree that with a NPP at the sample vals. it makes limited difference. Either the company fails and has nothing to distribute or it succeeds and the preference is irrelevant on exit. The investors are likely to prevent an exit at the entry val. if they can in any event as it is essentially a loss for the investor.
It becomes more relevant with more advanced companies with material assets. If the company fails and the assets are sold on liquidation, there will be something available for distribution under the preference (but maybe not much) and this provides material down side protection. VC is very high risk even at a later stage and this is a valuable right.
Given the limited number of later series B/C etc. rounds in AUS it seems we have adopted all of the traditions from the US without the thought process.