How to Build a Unicorn From Scratch – and Walk Away with Nothing. Heidi Roizen. post 
This is a grim fairy tale about a mythical company and its mythical founder.
Pied Piper is forced to run the whole campaign, blowing through all $200 million. The good news: They increased their user base by 10x. The bad news: The resulting business model those users end up actually supporting equates to more of a ‘market valuation’ of $200 million.
In more bad news, turns out Richard incorrectly estimated the cost of supporting those users, most of whom are taking advantage of the ‘free’ part of a freemium model. Support costs skyrocket.
Liquidation preferences, participation, ratchets – even the very term preferred shares are things every entrepreneur needs to understand.
Most terms are there because venture capitalists have created them, and they have created them because over time they have learned that terms are valuable ways to recover capital in downside outcomes and improve their share of the returns in moderate outcomes.
.
This slap in the face by the silent hand of capitalism is fair warning to the creators and inventors that think VC money is theirs to spend.