For the complete documentation index, see llms.txt
For the complete documentation index, see llms.txt
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Preferred stock
Similar to common stock, this security is piece of ownership in a company. Typically, preferred stock carries voting rights, as common stock does. Preferred stockholders also get priority over common stockholders when it comes to being paid dividends (money paid out regularly to shareholders out of a company's profits) or a liquidation event ie. an exit.
Also, the dividends paid to preferred stockholders are often fixed.
For investors, the essential terms to pay attention to are the Post-Money Valuation or the Pre-Money Valuation. This is what the company is considered worth; with it, you can calculate your percentage ownership. Comparatively, the price of the stock is relatively meaningless.
Most priced round contracts for venture-backed companies are based on the [National Venture Capital Association templates](http://cooleygo.com/documents/nvca-financing-documents/).
[Learn more about terms](https://feld.com/archives/2008/06/revisiting-the-term-sheet/).
