Every late-stage private company's cap table contains five or six different share classes, each with different rights, restrictions, and price points. In a private market marketplace, the class you're buying matters as much as the price you're paying. If you're still building foundational context on how pre-IPO investing and secondary share structures work across different classes, review the complete guide to pre-IPO investing, plus our walkthrough on the 409A valuation for how the IRS-required appraisal floor relates to actual secondary marks across the same cap table.

Common stock

The base layer. Held mostly by founders, employees who exercised options, and early non-investor shareholders. Common has no liquidation preference — at a sale, common holders get whatever is left after all preferred classes have been paid their preferences. In a successful exit, common often pays out at or near the most recent preferred price; in a down-round exit, common can be wiped out entirely.

On the secondary, common is usually the cheapest share class to buy. That cheapness is real — you're taking the most subordinated position in the cap table — but for high-quality companies expected to clear preference stacks comfortably, common can offer the best risk-adjusted upside.

Preferred stock (Series A, B, C, ...)

Issued in funding rounds, each with its own liquidation preference (usually 1x non-participating). Later series sit senior to earlier series in liquidation. Preferred almost always converts to common at IPO.

On the secondary, preferred trades at a premium to common because of the liquidation preference. The gap can be 20–40% in a stable cap table; wider for companies with messy preference stacks.

RSUs (restricted stock units)

A promise to deliver shares once vesting and a liquidity event occur. Most late-stage privates with RSU programs use 'double-trigger' vesting: time-based vesting, plus a liquidity event (IPO or sale). Until both conditions hit, the holder doesn't actually own anything they can transfer.

RSU sellers can structure forward contracts but cannot do direct or SPV transfers — there are no shares to transfer yet. Buyers of RSU forwards take both counterparty risk and the risk that the second trigger (IPO/sale) never arrives.

Founder stock and early-issued common

Same legal class as regular common, but the holder usually paid pennies per share and may be subject to vesting agreements that lock the shares to the company. Founder stock that has fully vested transfers cleanly; partially vested founder stock can't be sold.

What to ask

  • Which share class is being offered?
  • If preferred — which series, and what's the liquidation preference?
  • If common — what's the most recent preferred-round price for comparison?
  • If RSUs — single or double trigger, and what's the vesting status?
  • Are there any side agreements (transfer restrictions, voting agreements) that travel with these specific shares?

The cap table is public to insiders and largely visible to specialist secondary buyers. If a venue won't tell you which class you're buying, that's the question to push on. When you're evaluating private company shares across multiple listings, the share class — and its preference stack — is the first line item to compare, not the price. For the seller-side view of how class translates into a fair indication, see our guide on private share pricing.