Employees and Investors of private companies hold different class(es) of stock. Employees (and Founders) have common stock, while Investors get preferred stock

Employees and Investors of private companies hold different class(es) of stock. Employees (and Founders) have common stock, while Investors get preferred stock. Preferred stock carries with it a "liquidation preference", which basically means holders of that stock get paid out first during a liquidity event, including some multiple of their original investment. What ever is left, is divided among the holders of common stock. If the company is publicly traded, then all owners of stock hold the same class of stock (common).