Par—short for par value—is the nominal face amount printed on a stock certificate or debt instrument, used for legal and accounting purposes more often than for market pricing.

How it works

Delaware startups commonly authorize millions of shares at $0.00001 par. Founders pay par (or a bit more) at incorporation; priced rounds later set fair market price per share far above par. In bonds and notes, par is the principal repaid at maturity. If an investor buys a note below par, the discount may trigger original issue discount treatment.

Venture conversations rarely hinge on par except in cap table setup, some conversion formulas, and debt docs. Preferred stock liquidation preferences reference investment amounts and share classes, not par labels alone.

Stock splits and recapitalizations can change par value administratively without changing economic ownership percentages. Read split notices carefully—they adjust authorized shares and par but not necessarily your economic stake.

Why it matters

• Founders: Low par keeps incorporation fees manageable and separates legal capital from economic value created in financings.
• Investors: In credit, trading “below par” signals distress or higher yield; in equity, focus stays on price per share and ownership.

Investors in priced rounds focus on price per share, not par, when computing ownership.

Common mistake

Thinking par value equals what your company is worth. A $0.0001 par common share can represent vastly different economic value after venture rounds.

Corporate secretaries track par value in charter amendments when authorizing new share classes.

Related ideas

See original issue discount, price per share, and authorized vs issued shares.