Definition
Liquidation preference determines who gets paid first when a company is sold. 1x non-participating is standard: investors get their investment back before common gets anything. Participating preferred (more investor-friendly) lets investors get their money back PLUS share in the remaining proceeds.
Frequently Asked Questions
What's a standard liquidation preference?
1x non-participating is market standard for seed and Series A. 2x+ preferences are common in down rounds. GitDealFlow tracks engineering momentum to help founders negotiate better terms.