Definitions for "liquidation preference"
Liquidation preference specifies the peeking order of creditors during bankruptcy...
A negotiated term of a round of venture capital financing that calls for certain investors to have all or most of their entire investment repaid if the company is liquidated. Often also triggered by a deemed liquidation (see paragraph 4, Section IV above).
The amount an investor is entitled to receive prior to any distribution to holders of common stock. For preferred stockholders, the liquidation preference is usually equal to the purchase price plus any unpaid accumulated dividends.
a standand (and rarely negotiable part) of a VC investment