Make sure you understand the exact terms of the stock. There are many different varieties of "preferred"; it's good to know exactly which rights you're getting

Make sure you understand the exact terms of the stock. There are many different varieties of "preferred"; it's good to know exactly which rights you're getting with preferred stock. In general, this sounds like an excellent deal that is not available to most startup employees. Most employees get common, and the big problem with that is that they're last in line to cash out and can get wiped out even if the company IPOs or gets acquired if other investors got preferred stock with better terms. For example, things like liquidation preferences mean that a VC might get back all the money they put in before the remainder is divided up between stockholders; a 2x liquidation preference means that if the startup sells for any less than twice the amount of last funding round, the common stock holders get wiped out. Warrants can also dilute the common shareholders in the event the startup does well. Again, be aware of the specific terms of the stock.