A preference is just a term on the investment. They could be mixed. It can get pretty complicated.

Take this scenario: (A) Series A non-participating 5M, (B) Series B non-participating 10M, (C) Series C participating 10M, owns 25%. Founders own 50%, no options pool. Company sells for 30M.

    - C gets 10M first
    - B gets 10M next
    - A gets 5M next
    - 5M left over, only C is participating; A & B are just floors.
    - Pro-rata, remaining ownerships ratio of 50:25 = 2:1.
    - 5M/3*2 = 3.33M goes to founders.
    - 5M/3*1 = 1.67M goes to Series C investors.

Total tallies:

    - Founder:  3.33M.
    - Series A: 5M.     ROI: 0%
    - Series B: 10M.    ROI: 0%
    - Series C: 11.67M. ROI: 16%

This is mostly for intellectual curiosity, though. If you're a startup founder today… just don't take on any investors who ask for participating preferred. If you're an investor, don't ask for it, it makes you a vulture.