Preferred Stock

Definitions

1. A class of shares that gives investors special rights relative to common stock, such as liquidation preference, anti-dilution protections, or other preferences. Venture investors usually buy preferred stock in priced rounds.

   In plain English: A class of shares with special investor protections and rights.

   Example: "The financing converted the SAFE holders into preferred stock with the new round terms."

Related Terms

• Vesting
• Cap Table
• Dilution
• Cliff
• Corporate Venture Capital
• Double Trigger
• Anti-Dilution
• Participation Rights