What is preferred stock and why is it issued to investors? : Startup Company Lawyer

• http://www.startupcompanylawyer.com/2007/05/19/what-is-preferred-stock-and-why-is-it-issued-to-investors/

(Note: read the comments on this blog page.) Preferred stock generally has rights senior to common stock. Startup companies typically issue common stock to founders (and options to purchase common stock to employees) and preferred stock to investors. One reason for issuing preferred stock to investors is to preserve the ability of a company to issue options to purchase common stock at an exercise price at a significant discount from the preferred stock price.

• http://www.startupcompanylawyer.com/2007/05/19/what-is-preferred-stock-and-why-is-it-issued-to-investors/