Preferred return
A preferred return is a contractual distribution priority or threshold that may be paid to investors before other specified distributions. It is not a guaranteed return.
Why it matters to a capital raiser
I explain how it accrues, when it is payable, and where it sits in the waterfall.
Related terms
- Hurdle
- Waterfall
A term can mean something different in a particular deal, so read it with the governing documents. General education only. Not legal, tax or investment advice.