Class FF Stock

Class FF stock is a hybrid form of equity that combines elements of both common and preferred stock. It allows founders to convert their shares into common shares or future preferred equity, enabling participation in future financing rounds. This stock type is common in startups undergoing multiple equity financing rounds, with specific limitations such as board approval and valuation-based conversion.

What is a key characteristic of Class FF stock compared to founder stock?

• It is only issued to equity investors.

• It is purely a form of common stock.

• It has more restrictive rights than preferred stock.

• It is identical to preferred stock.

What is a common provision for Class FF stock?

• It can be converted into debt.

• It can be converted into real estate.

• It can be converted into common shares.

• It can be converted into bonds.

What unique opportunity does Class FF stock provide to founders?

• The ability to issue new shares.

• The ability to convert shares into future preferred equity.

• The ability to sell shares at a fixed price.

• The ability to avoid board approval for conversions.

What must be considered when converting Class FF stock to future equity?

• The current market trends.

• The original purchase price of the stock.

• The company's valuation at the time of conversion.

• The number of shares held by the founder.

In what type of companies is Class FF stock most commonly used?

• Large multinational corporations.

• Startups with multiple rounds of equity financing.

• Non-profit organizations.

• Government-owned enterprises.