Liquidation Preference

Definición

A liquidation preference guarantees preferred shareholders get paid a set amount (usually 1x their investment) before common shareholders in an exit or wind-down.

Cómo aparece en el fundraising

The standard venture term is a 1x non-participating preference: investors take either their money back or their ownership percentage, whichever is greater.

Preguntas frecuentes

What is the difference between participating and non-participating?

Non-participating investors choose preference or conversion; participating investors take the preference and then share in the remainder, double-dipping. The latter is off-market at early stages.

How do preferences affect founders in small exits?

In an exit near or below total capital raised, preferences can consume most proceeds, leaving common holders little; this is the hidden cost of overraising.

Recursos de Round Funded

Pon este término en práctica

Las definiciones solo ganan negociaciones cuando estás en una. Encuentra los inversores que financian tu etapa y empieza la conversación.

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