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Understanding Secondary Market Transactions with Becki DeGraw | Wilson Sonsini Startup Legal Basics
This Week in Startups
The Importance of Common Stock in Early Investors
The company's raising 100 million it's at a billion dollar valuation was picking even numbers here and 20 million of that is going to go towards secondary 80 million is going to be primary goes into the company. There's a concept that comes up pari pasu maybe we could explain this and how it relates to early investors and early employees and the foundersYeah absolutely so if we if the buyer or investor in that situation buys directly from the employees they're going to buy common stock and common stock doesn't have all the bells and whistles that the preferred stock does because it doesn't have a liquidation preference. Sometimes investors will say I don't want to hold common stock because I want the downside
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