Yes. Liquidation preferences are often seen as an advantage for investors because they're paid before other shareholders. The downside to company liquidation preference is that it can hurt the performance of the remaining business if the investor pulls out too quickly and there's not enough reinvestment capital left. Nevertheless, I believe that at least providing preferential treatment to long-term holders with a relatively small stake is worth it for most entrepreneurs, especially when you consider how vital any credibility or "signaling" benefits might be later on in life with future investors.