Common Stock
The standard type of ownership shares, typically held by founders and employees, with no special financial protections beyond a proportional claim on the company.
Quick Answer
Do founders always hold common stock instead of preferred?
Almost always, yes — founders typically hold common stock while investors receive preferred stock with additional protections, meaning common holders are paid only after the preferred stack is satisfied in an exit.
- Common stock sits behind preferred in a payout order
- Vested options usually convert into common stock, not preferred
- Confirm your specific class before assuming exit proceeds
The Lovie Advantage
Lovie separates common and preferred classes clearly on your cap table, so exit modeling reflects the actual payout order.
See how this connects to Liquidation Preference. For the formal definition, see Investor.gov's glossary entry on asset classes.
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