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🌍 US & Europe · Cap table & fundingSeniority (preferences)
Also called: seniority, preference seniority
In one line
The ranking that decides which investors' liquidation preferences get paid first when a company exits.
In plain English
When rounds are 'stacked', later investors are often senior — paid before earlier ones. When they're pari passu, they rank equally. Seniority sets the order money flows at an exit.
If you were explaining it to a 5-year-old
It's the order of the queue for cake: whoever is 'senior' gets served before the others.
Why it matters when you sell
Higher seniority for investors means more comes off the top before common holders, affecting what your shares yield at exit.
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.