2x-3x Liquidation Preference

Biological Parallel

Parent birds provision 2-3x more food to chicks than the minimum needed for survival—this 'insurance premium' protects against foraging variability and sibling competition. The extra investment seems wasteful in good years but prevents total loss when conditions deteriorate. Elephant seals nursing pups transfer 300kg of fat reserves—nearly 3x the minimum survival requirement—because ocean conditions are unpredictable and pup mortality is catastrophic. Liquidation preferences encode the same logic: overprovisioning early investment to ensure minimum viable return even in worst-case scenarios.