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Preferred Equity Versus Common Equity

  • Home / Preferred Equity Versus Common Equity

Preferred Equity is given certain rights that Common Equity is not necessarily afforded. In the case of a liquidity event, preferred equity holders are paid back before common stockholders and often before owners and employees receive their compensation.

Preferred equity holders often have pro-rata investment rights. This means that they are given more preference to maintain their ownership portion when subsequent rounding subsequent rounds of funding occur.

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