Preferred investors, who typically pay a higher price than common stockholders, generally receive registration rights as part of their investment. These rights provide liquidity to investors and allow them to require the company to register their shares to the public.

There are two principal types of registration rights. Demand rights give investors the right to force a company to register shares of common stock so that the investor can sell them in the public market without restriction. The second type, piggyback rights, give the investor the right to include their shares in a registration carried out by the company.

Click here a more detailed discussion on the ins and outs of registration rights.