Common Stock is issued to Founders and Employees. Preferred Stock is a different class of ownership with terms (features) that provide advantages to investors – typically designed to help them in instances where the investment doesn’t work out as planned. Those terms normally include a preference, anti-dilution, dividends, and voting controls. For example, preference gives investors a choice at the time of an exit to either get their money back or convert into the percent of the company they own. Almost universally, investors typically buy Preferred Stock when they invest in a company.