Common stock is the basic ownership share class of a corporation, held by founders, employees, and option-holders after exercise. It represents residual ownership in the company after all preferred-share rights are satisfied. In a venture-backed startup, common stock is junior to every series of preferred stock in liquidation waterfalls and typically carries fewer rights than preferred, though it carries the upside in exit scenarios above the preferred preference amounts.
The structural position of common stock in a venture-backed cap table: founders hold common from day one, employees receive options that exercise into common, advisors hold common (often via restricted stock or options), and early non-priced investors (SAFE an...