"There is a massive disconnect in late-stage preferred stock, because if you’re using it to synthesize debt it doesn’t matter what the price is."

Actually, price is crucial with this weird 'debt' since you're betting on the cumulative probabilities of hitting your liquidity preference and liquidity cap numbers. (Really it's an integral over that range, but whatever.) Whereas in equity venture investing the power law distribution of returns dominates linear optimizations of price.

Thanks for reporting on this. I don't think many people knew about this insane liquidation straddle instrument. I sure didn't.