Common stock

Also called: common shares, ordinary shares

In one line

The basic class of shares held by founders and employees, ranking behind preferred stock when the company pays out.

In plain English

Common is what your options turn into. It's 'last in line' in an exit — investors with preferred shares get paid first, and common holders split whatever is left.

If you were explaining it to a 5-year-old

At a party, some guests (investors) get first pick of the cake. You and your friends get whatever slices are left after they've taken theirs.

Why it matters when you sell

Because common sits behind preferred, your shares can be worth noticeably less than the headline price per share — and a buyer will price that in.

Put it to use

Exit waterfall calculator · What's fair on price?

Hold private-company shares? Our free estimator shows what your stake could be worth and whether you can sell — no sign-up. Value my equity (free) → · Back to the glossary →
When you're ready to go deeper, there's an optional Equity Toolkit and Report.

Sources

A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.

Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.

Common stock

Related terms

Put it to use