Participating Convertible Preferred Share - PCP

Dictionary Says

Definition of 'Participating Convertible Preferred Share - PCP'

An equity holding that gives investors the right to claim excess earnings (along with common-stock shareholders) in addition to the preferred dividend. PCPs are commonly used in venture-capital financing; venture capitalists will often exercise the option to convert their PCPs to common stock when they intend to exit an investment. The type of exit – initial public offering or trade sale – determines the security's cash flow right.  
Investopedia Says

Investopedia explains 'Participating Convertible Preferred Share - PCP'

The National Venture Capital Association is the industry lobbying and advocacy organization for venture capitalists. According to a 2009 Global Insight research study, companies with venture-capital backers accounted for 12.1 million jobs and $2.9 trillion in revenue in the U.S. in 2006 alone. 

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Venture Capital

    Money provided ...
  2. Venture Capitalist

    An investor who ...
  3. Initial Public Offering - IPO

    The first sale ...
  4. Angel Investor

    An investor who ...
  5. Venture Capital Funds

    An investment ...
  6. Participating Preferred Stock

    A type of ...
  7. Common Stock

    A security that ...
  8. Muppet Bait

    Naive investors ...
  9. Gross Spread

    The difference ...
  10. Absorbed

    1. In a general ...

Articles Of Interest

  1. 5 Tips For Investing In IPOs

    Thinking of investing in IPOs? Here are five things to remember before jumping into these murky waters.
  2. IPO Lock-Ups Stop Insider Selling

    Ownership plays a key role when companies go public. Find out how.
  3. The Rise Of The Modern Investment Bank

    Get to know a little bit about the institutions whose actions help to guide free markets.
  4. Greenshoe Options: An IPO's Best Friend

    Find out how companies can save or boost their public offering price with these options.
  5. Investing In IPO ETFs

    Learn the history, rules and risks of investing in IPO exchange-traded funds.
  6. How The Sarbanes-Oxley Era Affected IPOs

    After the infamous collapse of companies like Tyco, Enron and WorldCom, the government responded to try and prevent it from happening again.
  7. Private Equity A Trendsetter For Stocks

    This funding is one of the forces that drives capital market valuations.
  8. Cashing In On The Venture Capital Cycle

    Find out how VC firms make the market go round, and round and round.
  9. Seek An Adventure In Venture Capital

    Make a career out of chasing down the "next big thing".
  10. Top 9 Venture Capital Interview Questions

    Ace your interview by learning how to break down the most common questions asked.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center