How common is it that series A investors have better liquidation preference terms than investors in a later round?
Pretty common if your negotiating position is weak and the company is struggling with a significant burn rate.
When things are tough, and you are really struggling to put together a round, and the burn rate is material, and you barely have one option at all … the terms get tough.
One of the first things new money asks for in a “tough round” is a very senior liquidation preference. Often, they will use a drag-along or pay-to-play provision to partially wipe out prior preference as well.
In these medium-to-high burn, company is struggling scenarios … the new money often tries to wipe out as many of the “preferred” rights of the prior rounds.
So if you are doing well, and have multiple options, it is very rare.
If you are struggling, it’s a bit more common.
In that scenario — it is what it is.