A Stacked Preference refers to a capital structure where multiple rounds of preferred stock each have liquidation preferences that stack in seniority (often with later rounds senior to earlier ones), meaning proceeds are paid out in layers before common receives anything. In down markets, Stacked Preference can create significant overhang and misalignment, and Stacked Preference is a key consideration when evaluating exit values and recap options.
Ryan RobertsStartup Lawyer
Ryan Roberts is a startup lawyer with more than two decades of experience advising on venture financings and M&A transactions totaling more than $1 billion. He is the author of the Amazon bestselling startup law book Acceleration.
