Liquidation & exit
What is Liquidation Preference?
The amount preferred shareholders receive first at exit - typically 1× their investment, before common shareholders see a dollar.
Liquidation preference is a preferred-stock right that gets paid before common shareholders at exit. The standard is 1× (1 times the original investment), non-participating. Multipliers above 1× (2x, 3x) are investor-favored and rare in healthy markets. Non-participating means the preferred holder chooses pref OR converted-common, whichever is more. Participating means they get pref AND pro-rata. Liquidation preferences stack across multiple rounds - Series B typically gets paid before Series A, before Seed.