Cap table basics
What is Share Class?
A category of stock with distinct rights - e.g., Common, Series Seed Preferred, Series A Preferred - each tracked separately on the cap table.
Companies maintain multiple share classes to give different rights to different shareholders. Common stock is one class (founders, employees). Each priced round creates a new preferred class with its own liquidation preference, anti-dilution terms, and protective provisions. A typical Series B company has Common, Series Seed, Series A, and Series B as four distinct classes - each with its own term sheet provisions encoded in the charter.