Business Pitch Dictionary by pitch.dog
Term-sheet economics · Core

Non-participating preferred

Also called: non-participating preference

ELI5

Investors usually take either their preference or common-share value.

Used in conversation

“Non-participating preferred aligns better in many ordinary exits.”

Definition

Preferred stock whose holder generally chooses between taking the preference or converting to common to share proceeds.

Here “Non-participating preferred” means: Preferred stock whose holder generally chooses between taking the preference or converting to common to share proceeds.

Pitch context

You will see “Non-participating preferred” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches term-sheet economics.

Why it matters: In term-sheet economics, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Sources & evidence · 5

Direct term-level sources and supporting source families.