Skip to main content

Glossary Classes of Stock

Stock is the basic unit of ownership in a corporation. A corporation can have more than one class of stock, though, meaning that each class may be given distinct rights. The two most common classes of stock for a startup are common stock and preferred stock. Founders and employees usually get common stock (or stock options), whereas investors usually get preferred stock. Preferred stock confers certain benefits on investors, including things like protective provisionsliquidation preference, and more.