Funding and ownership
Preference shares
Shares with extra rights over ordinary shares, usually to be paid back first if the company is sold or wound up, and sometimes a fixed dividend. Investors normally take them when they invest. Americans call them preferred stock.
A plain-English explanation, not financial or tax advice. Rules and rates change, so check your own situation. For free, impartial guidance, try MoneyHelper. Disclaimer.
You'll hear it as
The Series A investors hold preference shares, so they get paid out first.
Why it matters to you.
When a company sells for less than hoped, preference shares can take most or all of the money before ordinary shareholders, including staff, see anything.
Also called Preferred stock, Preferential stock.
Related terms.
Videos.
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