Series A Preferred Stock
In venture capital terminology, the term Series A Preferred Stock refers to the stock or equity which is issued at the Early or Venture Stage in order for a new company to raise money. This Series A Preferred Stock is the first in the series of Seed Stage equity financing.
For example, issuing Series A Preferred Stock may make sense for a new company which has already been formed and has had success in providing a service. The company needs to buy equipment in order to expand the business and so it decides to issue Series A Preferred Stock to raise the money for the equipment. The company has proved its success to a degree, and it is at the point of growth. With solid management in place and a business plan drawn up, all that is needed is additional financing. The Series A Preferred Stock issue will then provide the first of the four Early Stage Financing stock issue round series, leading up to the company’s Initial Public Offering or eventual sale of common stock to the public.