Silicon Valley Self Regulation

Liquidation Preference

photo by Sebastiaan ter Burg

photo by Sebastiaan ter Burg



Liquidation preference sets the order of payout for stakeholders in the case of a liquidity event. Put simply, liquidation preference establishes the “how much” and the “when” of your payout if you are a stakeholder in the company. 

helpful resources

Liquidation Preference selection at Investopedia

Connie Loizos's WTF is a liquidation preference? at TechCrunch

Sam Wu's Liquidation Preference 101 and Liquidation Preference: Nonparticipating vs. Participating at The Startup Lawyer

Marcus Gosling's Funding your Startup — a Founder’s Guide to Liquidation Preferences at

Charles Yu's The Ultimate Guide to Liquidation Preferences at Medium

David Willbe's Investment Termsheet: Liquidation Preference at StartupGrind