Preferences define how investors take money out of the company when it liquidates. Investors might get 1-3x their money back if the company sells, or worse, get 1-3x and their percentage share of the proceeds after that money is taken off the table. If a company succeeds but isn't a breakaway success, preference terms can have a big impact on how much common shareholders earn off the sale.
I'm assuming by "ratchets" he meant anti-dilution provisions, which often mean that if the company raises a new round on anything less than amazing terms, existing investors get topped up with new shares to maintain their ownership percentage, at the expense of common shareholders.
As long as we're being precise here I have to correct some minor issues:
A preference, strictly speaking can be with or without a ratchet. A preference means that, at a liquidity event, you get paid before another class of shares. A ratchet means that you get paid a specified minimum price before other shareholders get paid.
An anti-dilution provision usually is invoked in a "down round" and it does what it says: It compensates earlier investors for dilution in cases where the value of their shares don't go up. The details are often complex, and the circumstances where this happens are often where a company is in trouble, and holders of common and options on common are going to get massacred anyway. At which point, if the company wants to keep you, you'll get a new set of options. Which is a long way of saying "you got bigger problems."
IMO none of this really matters when you're picking whether or not to join a company. As an outsider, if a down round happens while negotiating, you should move on.
In virtually any case where a company has a down round, or fails to meet preferences in a sale, you want to leave anyway. Your stock being worthless is the least of your problems. The exception is if you're specifically part of a turnaround, in which case you'll have a newly negotiated package (unless you were a VERY early hire sitting on a bunch of still in the money options or something).
