Common stock
In accounting, common stock means the residual class of shares — founders', employees' and option holders' — paid after creditors and after any preferred stock's preference. The class a 409A valuation prices.
Authority: 8 Del. C. §151 (opens in a new tab). Sources
The lessons that teach this
From the free founder back-office course, taught on one company's books, with exercises to work it yourself.
- Cap tableFounder stock, vesting and the 83(b) electionAuthorized versus issued shares, par value, a restricted stock purchase at $0.0075, four-year vesting with a one-year cliff, and the 83(b) election — on Northwind's founders.10 min
- Cap tableThe cap table explainedWho owns what, counted two ways: common and preferred, the option pool, SAFEs as converted, and pre-money versus post-money — Northwind's table before its Seed.9 min
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
- Stock options, 409A valuations and vesting for startupsHow option strike prices are set by a 409A valuation, how vesting and the cliff work, and why ASC 718 makes every grant an expense on your P&L.
- Balance sheet explained for startupsAssets equal liabilities plus equity. What each startup line means, from deferred revenue to the SAFE and the accumulated deficit, and why it must balance.
- Chart of accounts for startups: a starting templateA starting chart of accounts for a US startup: number ranges, the expense accounts you need, and when to add an account versus a class or tracking tag.
What it is not called
Each of these means something else. Use one here and an accountant reading the product notices.
- ordinary shares in US copy
- equity (which also holds APIC and retained earnings)
Components that render this
These components name it in their spec, grouped and labeled exactly as the catalog shows them.
Also in Equity & financing
Defined in Lexicon. This page is generated from that document, so the two can't disagree.