It’s important to grasp general legal concepts and definitions as a startup founder. This page is sourced from Clerky’s Legal Concepts for Founders page.
While most startups issue convertible notes or safes in seed financings, some issue preferred stock (which is standard for post-seed financings). Financings where the startup sells preferred stock are known as equity financings, since preferred stock is a form of equity.
Typically, startups create a new series of preferred stock for each equity financing. Startups issuing preferred stock in a seed financings will usually call the new series Series Seed or Series AA. These financings often use forms based on those used in post-seed financings, but that are specifically adapted for seed financings.
By convention, for post-seed investments, the series are designated by letters in alphabetical order. For example, the series created for the first post-seed financing is typically called Series A Preferred Stock. The series created for the next financing is usually called Series B Preferred Stock, and so on.