Preferred stock is the share class issued to venture investors in priced equity rounds. It carries a defined package of economic rights (liquidation preference, anti-dilution protection, accruing dividends in some structures) and control rights (protective provisions, board representation, consent thresholds, registration rights) that common stock does not have, with each series typically receiving its own terms. It is the structural contract that defines investor protections and the share class that determines who actually gets paid in non-home-run outcomes.
The standard package of preferred-stock rights in modern venture rounds: