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How does Preferred Stock work?

As a non-lead investor investing a small amount, the most important terms to pay attention to are the Post-Money Valuation or the Pre-Money Valuation. This is effectively what the company is considered to be worth, and 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 today are based on the National Venture Capital Association templates. 

Read more about the NVCA documents.
Learn more about terms.

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