The right of an investor to priority in receiving the proceeds from the sale or liquidation of a company. This right is usually attached to the preferred shares and gives the holders of such shares a position that is senior or ahead of the holders of common shares or junior preferred shares if the company is sold or liquidated. The order in which investors, or debt holders, get paid in the event of company liquidation or bankruptcy. Commonly used by venture capitalists to ensure they see a return on their investment in different liquidation scenarios.
