Breakit continues to write about ‘dirty term sheets’ and Julia Dalin argues against preference shares when raising seed capital. For most startups I think only accepting common shares at seed will give a worse overall deal for founders, as they will get a lower valuation and higher dilution.
The reason is that terms have value. If you change terms, you are likely to see an impact on valuation. And of all the terms that can be negotiated, negotiating for common shares instead of a 1x non-participating liquidation preference doesn’t seem to give the most value for money when raising equity capital.