Which is better for stock option between preferred vs common if startup is acquired ?
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In a startup, preferred share is at least as good as common share, and usually much better.
You dont get this choice as a start up employee. You get common. Preferred stock are investor shares that protects them from less than stellar exits at your expense. The best part about preferred shares is that they stack. Each round of investment is a new layer and almost all of them will have a 1x preference so it your company gets sold for less than the investment it took in - you get nothing. God help you if those shares are participating preferred. If they are then you need an even higher share price before any cash comes your way. In an IPO everyone or an acquisition with at least a 3x return to investors, everyone would converts to common and the waterfall is really simple.
Preferred will either be converted to regular stock , or it will be bought back — in a startup , preferred and/or warrants are issued to give the capital round special rights , preventing unexpected dilution of equity ... in a cash-flow positive business , preferred is more like debt, with a high dividend , and is bought back when the organization no longer needs that slug of capital