IPO vs Pref stack

One reason the market for acquisitions might be closed if your sale valuation would be lower than your previous valuation is that your choices are:

- Sell privately and the founders get killed by the preference stack, or

- IPO and the pref stack gets wiped out (prefs don't survive IPOs).

Theoretically, you could negotiate somewhere in between but it's hard and some VCs will have told their investors the investment has held its value because of the preference.