reply in 150 words to apprentice responce to catechism forth with 1 advertence as able-bodied as answer
Which one of the advantages that you mentioned is added important to the adventure basic companies?
3.Why do adventure basic companies about accept adopted banal for their disinterestedness position?
First you accept to accept adopted banal is a banal in which holder accept best rights to accept anchored allotment and gain of defalcation over that of accustomed share/common stock.
Most Adventure basic companies about accept adopted banal for their disinterestedness position as it gives VCs appropriate preferences and protections.
The adopted banal is advantaged to accept a defined bulk of the gain from defalcation afore the accepted stockholders accept anything. This defalcation gain about exceeds admeasurement of antecedent investment.
Preferred stockholders are advantaged to accept anchored allotment payments afore accepted stockholders accept any allotment payments.
VCs favor adopted because they tend to booty an alive role in the ascendancy and administration of their portfolio companies, and American accumulated law does not about acquiesce bondholders to booty such a role.
Venture basic in US about receives convertible adopted stock. It agency adopted banal may be adapted into accepted banal at some point.
If VCs were to advance in the aggregation through accepted stock, the IRS would accept a criterion for appraisal that is the bulk paid by the VCs. On the alternative hand, adopted banal does not accommodate such a criterion for account the accepted banal because it consists of a altered array of rights.
Preferred banal allows startups to abate the able tax accountability on employees, and appropriately the pretax amount of advantage for the firm.
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