5 Ways To Raise Funds for Your Startup, Startups generally offer preferred shares when they raise money. Common stock is typically given to founders and reserved for options. The reason to offer preferred shares is that they often come with provisions like rights and liquidation preference. They are also senior to the common stock. This will make the investment more attractive and assure the investor he or she will be paid out first. After all, they are some of the first people to put up money to help your startup succeed.”
, you will understand that having preferred shares and associated preferred voting rights is very important to angel investors. Venture capitalists, who tend to be more savvy than angel investors, insist on preferred shares.
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