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

Preference multiple

Also called: liquidation multiple

ELI5

How many times the investment is paid before common.

Used in conversation

“A two-times preference materially changes the exit waterfall.”

Definition

The multiple of original investment used to calculate a liquidation preference.

Here “Preference multiple” means: The multiple of original investment used to calculate a liquidation preference.

Pitch context

You will see “Preference multiple” 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.