The breed of preferred stock most often used by VCs is called participating preferred.  The word participation refers to a specific feature of the stock:  its ability to convert to common during attractive exit events. 

This is an important aspect as it ensures that the owners of the stock are able to get a cut of exit proceeds allocated to the equity pool in proportion to their ownership levels.  In plain English, this means that if the participating preferred holders have 25% of the shares in the company they will typically get 25% of the proceeds made available to the common stock pool. 

It's worth noting that the portion that is available to the common stock holders is not the total exit value of the company as other stakeholders, such as lenders, typically get paid before the common equity holders. 

In sum, participating preferred shares have different rights then the common stock holders, but get to participate in the companies eventual exit as if they were common shares.