I'd love to see an entire blog post about Sam's footnote #1. Though I find it funny that every point about why this is bad for late-stage companies I believe applies exactly the same to post demo-day YC seed stage companies with extremely high valuations.
Though I think in both cases if the company can be disciplined then cheap capital should be good, but staying disciplined is hard...
pg: "Yes, investors with preferred stock usually get their money back first. Sometimes they get a multiple, but that's considered overreaching nowadays and the more promising startups never have to agree to that. I suppose that is implicitly a target valuation in a sense. But no one views it as a target, because it only matters if things go badly." https://news.ycombinator.com/item?id=6896833
Though I think in both cases if the company can be disciplined then cheap capital should be good, but staying disciplined is hard...