PrivateTechSharesDividend
Also called: dividends
In one line
A distribution of profits to shareholders — rare for growth startups, which reinvest rather than pay out.
In plain English
Dividends share profits with shareholders. Most venture-backed startups pay none, reinvesting instead, though preferred shares sometimes carry accruing dividend rights that add to their payout at exit.
If you were explaining it to a 5-year-old
Pocket money the club hands out from its profits. Most growing clubs skip this and spend on growing instead.
Why it matters when you sell
Accruing preferred dividends can increase what investors take at exit, nudging down what common holders receive.
Related terms
Put it to use
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.