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🌍 US & Europe · Cap table & fundingParticipating preferred
Also called: participating preference, double dip
In one line
Preferred stock that collects its liquidation preference and then also shares in the remaining proceeds with common.
In plain English
Participating preferred 'double dips': investors first take their money back, then also join common holders in splitting what's left. It leaves less for employees than plain preferred.
If you were explaining it to a 5-year-old
The VIP guest gets their money back first AND still takes a normal slice of the leftover cake — two helpings.
Why it matters when you sell
Participation can significantly shrink common proceeds at exit, which is a core reason employee shares sell at a discount.
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.
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