Preferred stock (also called preferred shares, preference shares or simply preferreds) is a type of stock which may have any combination of features not possessed by common stock including properties of both an equity and a debt instrument, and is generally considered a hybrid instrument. Preferred stocks are senior (i.e., higher ranking) to common stock, but subordinate to bonds in terms of claim (or rights to their share of the assets of the company) and may have priority over common stock (ordinary shares) in the payment of dividends and upon liquidation. Terms of the preferred stock are described in the articles of association.
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- Common StockCommon stock is a form of corporate equity ownership, a type of security.
- Term SheetA term sheet is not a promise to invest. It's a contract that typically provides for confidentiality and temporary exclusivity and sets out the main parameters of the investment.
- Qualified Small Business StockQualified Small Business Stock (QSBS) is a tax benefit whose purpose is to encourage long term investment in small businesses and startups. Gains on investments that qualify as QSBS can be eligible for reduced or deferred federal tax.
- Fair Market ValueFair market value (FMV) is an estimate of the market value of a property, based on what a knowledgeable buyer would pay to a knowledgeable seller in the market.
- Andreessen Horowitz (a16z)Andreessen Horowitz (also named a16z) is a US venture capital firm, founded by Marc Andresseen and Ben Horowitz in 2009.
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