A clause common in early round funding, loans to restructure companies, private equity deals or leveraged buyouts, that provide for one source of funds to receive payments before, at a higher rate, or on another preferred basis in certain circumstances, typically called “liquidation events” such as an IPO or sale of the business. Liquidation preferences are often very complex provisions, which enhance returns for one investor over other only in limited circumstances. One type of liquidation preference is a Waterfall Provision