What are Preferred Shares?

Angel investors are important capital sources for entrepreneurs, providing cash as debt, some of which may be converted later into equity, or more commonly to purchase equity interests in the company. Seasoned angel investors favor funding seed and startup companies by purchasing preferred shares, rather than simply owning common (ordinary) shares or convertible debt (see: Angels: Convertible Debt Is Seldom the Right Security for Startup Investments http://www.theicehouse.co.nz/Internal/InternalBlogs/AngelsBlog/tabid/236/EntryId/48/Angels-Convertible-Debt-Is-Seldom-the-Right-Security-for-Startup-Investments.aspx and When is Convertible Debt the Right Instrument for Angel Investments? http://www.theicehouse.co.nz/Internal/InternalBlogs/AngelsBlog/tabid/236/EntryId/49/When-is-Convertible-Debt-the-Right-Instrument-for-Angel-Investments.aspx )

Written by: Bill Payne

Full Story: http://www.theicehouse.co.nz/Internal/InternalBlogs/AngelsBlog/tabid/236/EntryId/79/What-are-Preferred-Shares.aspx