Venture Capital Quizzes-Participating preferred stock grants

Answer to Quiz

Participating preferred stock grants have more favorable terms to venture capitalists than normal preferred stock.

Answer: (a), True
In the venture capital context, "participating preferred stock" means preferred stock in a corporation that receives its liquidation preference in a merger or acquisition, and also participates in the remaining merger or acquisition proceeds with the other shareholders. Normal or typical preferred stock would not grant the holder the extra "participation" rights.

Next Quiz:

Who was the main early venture capital backer in eBay?

(a) VantagePoint Venture Partners
(b) Benchmark Capital
(c) Accel Partners
(d) Sequoia Capital

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