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Dictionary by pitch.dog
Funding instruments & exemptions · Core

Preferred stock

Also called: preferred shares

ELI5

Investor shares with special economic or control rights.

Used in conversation

“The Series A preferred stock has a liquidation preference.”

Definition

An equity security with rights or preferences senior or different to common stock, often issued to venture investors.

Here “Preferred stock” means: An equity security with rights or preferences senior or different to common stock, often issued to venture investors.

Pitch context

You will see “Preferred stock” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches funding instruments & exemptions.

Why it matters: In funding instruments & exemptions, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Connected terms

  • Preferred sharesThe search label “Preferred shares” can route to both entries.
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Sources & evidence · 5

Direct term-level sources and supporting source families.