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Glossary

Liquidation preference

A liquidation preference defines how preferred shareholders are paid before common shareholders in a sale, liquidation, or similar event.

Accurate as of Jun 4, 2026

Legal GovernanceEquity Ownership

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Pro rataPro rata rights let an investor buy enough of a future financing to maintain their ownership percentage.Accredited investorAn accredited investor is a person or entity that meets one or more eligibility criteria under U.S. securities law. The criteria can involve income, net worth, professional credentials, or entity status.Anti-money launderingAnti-money laundering, or AML, refers to legal and operational controls used to identify, assess, and report potential money-laundering risks.

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Usage can vary across firms, programs, and jurisdictions; this definition describes the venture-scouting context.