The Board is reviewing a proposed term sheet for a Series A Convertible Preferred Stock (CPS-A) in which the venture capital (VC) firm proposed a participating liquidation preference (LPref). The CFO suggests countering with a fixed return liquidation preference structure that would provide the VC with a 3X return in the event the liquidation preference is exercised. This means that if VC pays $5/share for the CPS-A , that in a liquidation it would recieve $15/share before the common stock (CS) had any recovery. A Director commented Group of answer choices VC may prefer this structure because they have down-side protection with upside optionality. VC may not like this structure because in the event the