Liquidation Preferences Without the Jargon
A liquidation preference decides who is paid first when a company is sold. The common arrangement returns an investor's money before the remaining proceeds are shared.
The plain form, one times and non-participating, means the investor chooses: take the money back, or convert and share like everyone else. It is a floor, not a bonus.
Complexity arrives with participation and with multiples. Each addition moves value from the common holders to the preferred, and each is felt most sharply in the modest outcomes, not the great ones.
Model the waterfall at several sale prices before signing. The clause reads abstractly and pays out concretely.