Pari Passu regains popularity in early-stage
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The use of pari passu as a liquidation structure has increased in early-stage, while remaining relatively consistent in late-stage, in the first half of 2024, according to data from Aumni-tracked equity financings.At the start of 2024, ~83.7% of early stage deals had a pari passu liquidation structure. This portion rose to ~86.8% of early-stage deals by mid-year. Meanwhile, in late-stage, the prevalence remained fairly stable, between 57.8% - 58.8%.
Pari passu is generally considered to be a relatively neutral set of terms while other, more structured terms, such as seniority ordered-by-equity-class (sometimes known as “standard” structure), tend to be thought of as investor‑friendly. The data supports the trend of structure remaining popular in late-stage. We recently noted that the prevalence of atypical liquidation preference rights and participating liquidation preferences are on the rise in Series C+, and that pay-to-play is spiking across various parts of the market
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