Jargon Translator with Scarlett Sieber from Money20/20 is the segment where financial terms that seem simple on the surface but carry real weight underneath are broken down . In this episode, we unpack the “capital stack,” a core concept in finance that defines who gets paid first and who gets what’s left when a company succeeds or struggles. Think of it as a hierarchy: at the top are senior secured lenders, first in line and backed by collateral; followed by mezzanine lenders, who take on more risk for higher returns; then preferred equity holders with added rights and priority; and finally, common equity holders, founders, employees, and shareholders who receive whatever remains.
Understanding the capital stack is essential because it shapes risk, return, and control across any business or investment. It’s the ultimate financial pecking order, where your position determines your outcome especially when things don’t go as planned. Whether you’re an investor, operator, or just curious about how money flows behind the scenes, this is a concept you need to know.