Non-participating preferred means that either you are the first to get money off an exit up to the amount of your investment OR you convert to common and get your ownership percentage. For example, say you invested $10m into a company at $30m post and then owned 33%. If the company sold for $20m, you would get $10m and the common would split the remaining $10m. If the company sold for $30m you would get your $10m back either way. If the company sold for $100m, you would convert to common and get $33m.