You get your full investment back in a liquidation event before common stock gets paid off.
To illustrate, if LSVP was the only investor in Ning (which it isn't) at a $15MM on $750MM, then if the company gets sold for just $15MM, LSVP would still get $15MM back, and nobody else would get anything.
But with prior preferreds expecting a return, and (theoretically) no pressing need for the money and such a high valuation -- that seems an excessive amount of downside protection to offer for a smallish amount of late money in an 'up' round.
I guess the interesting scenario to me is: what if the liquidation amount is enough to give the early investors a modest return, or the latecomers their money back, but not both? Can we assume that there are tiers, and even that the earlier tiers might get an X% return before the late tier gets their full investment back?