Preferred Stock

Definition

The special shares VCs get that have extra rights and protections—the VIP section of the cap table.

Example Usage

The VCs insisted on Series A preferred stock with a board seat and anti-dilution rights, which gave them more control than our founders.

Origin

Corporate finance term describing a class of shares with preferential rights

Fun Fact

Preferred stock features vary wildly, but typically include board seats, liquidation preferences, and anti-dilution protection

Source: Venture capital and corporate finance terminology

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