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Investopedia explains '"A" Round Financing '
When investing in companies, private equity investors typically prefer convertible preferred stock to common stock for the various rounds of financing, such as Series A, Series B etc., because of the special features of the security. Convertible preferred stock have features such as dividend accrual and convertibility into common stock, which may become very profitable. As well, preferred stock will have a higher degree of rights compared to a common shareholder.
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