To give or not to give employee equity, that is the question. One of the first issues startups deal with is how they plan on compensating key personnel. For startups with limited funds, there may not be many options. The want or need to issue equity really depends on your startup’s short and long term goals, as well as its financial capabilities.
Preferred stock refers to a certain type of equity, where certain shareholders possess a higher claim (preference) during the liquidation of stock than common shareholders.