Definition
Special shares that get priority in liquidation, dividends, or control—essentially investor insurance against founder incompetence.
Example Usage
Series A investors got Series A Preferred shares with 2x liquidation preference and board seats, while founders got Common stock with no special rights.
Origin
Corporate finance concept dating to the 19th century; standardized in VC culture during the 1980s-90s.
Fun Fact
Different series of preferred shares (Series A, B, C) create a complex waterfall in acquisitions, often resulting in founders getting nothing.
Source: Venture capital law and corporate finance
Related Terms
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See “Preference Shares” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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