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Suppose that the VC holds convertible preferred with 1X liquidation rights. The VC invested $2.5m...

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Suppose that the VC holds convertible preferred with 1X liquidation rights. The VC invested $2.5m and if they convert, they would own 20% of the equity. Suppose the company the VC invested is sold for $10m. How much would the VC get in the sale? Would the VC want to convert their shares? The VC wouldn't want to convert their shares. By not converting, they get $2.5m. The VC would want to convert their shares. By converting they would get $2.75m

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