Two important classes of stock are common stock and preferred stock. In general, preferred stock has โrights, preferences, privileges, and restrictionsโ that common stock does not have. Typically, investors get preferred stock, and founders and employees get common stock (or stock options).
The exact number of classes of stock and the differences between them can vary company to company, and, in a startup, these can vary at each round of funding.
โconfusionโ Another term youโre likely to hear is foundersโ stock, which is (usually) common stock allocated at a companyโs formation, but otherwise doesnโt have any different rights from other common stock.*