This is correct in an M&A scenario, but usually not in an IPO. In an IPO, the most common treatment of preferred is to force-convert everyone who holds it to the equivalent amount of common stock, and such a term typically appears in later-round VC term sheets.
Not only do public investors dislike having a junior series of common stock out of the gate (Google-style two-class shares notwithstanding), but the special rights that come with VC-type preferred stock (series votes, class votes, rights to appoint directors, anti-dilution, blocking M&A, etc.) are eliminated once there are public shareholders.
[Speaking as a former VC now public investor who builds and sells VC cap table modeling software.]
Not only do public investors dislike having a junior series of common stock out of the gate (Google-style two-class shares notwithstanding), but the special rights that come with VC-type preferred stock (series votes, class votes, rights to appoint directors, anti-dilution, blocking M&A, etc.) are eliminated once there are public shareholders.
[Speaking as a former VC now public investor who builds and sells VC cap table modeling software.]