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Liquidation stack

Also called: preference stack, liquidation preference stack

In one line

The combined, layered liquidation preferences across all funding rounds that must be paid before common holders see anything.

In plain English

Each round can add its own preference. Stacked together — sometimes senior rounds first, sometimes equally — they form the total that comes off the top at exit, ahead of you.

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

Every VIP guest's 'money back first' rule piles up. All those piles must be paid before any cake reaches the kids' table.

Why it matters when you sell

A tall preference stack can consume a large exit entirely, so understanding it reveals the real value of your common shares.

Related terms

Liquidation preferenceSeniority (preferences)Pari passuExit waterfallParticipating preferred

Put it to use

Exit waterfall calculator

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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.