Exit waterfall calculator

Enter the share classes and an exit value to see who gets paid what: liquidation preferences, participation, seniority, and the point where preferred is better off converting to common. Everything runs in this browser tab; nothing is sent anywhere.

How it's calculated

• Preferences first, by seniority. Rank 1 is paid first. Each class's preference is issue price × shares × multiple. Classes with the same rank are pari passu and share any shortfall in proportion to their preference.
• Non-participating preferred takes the larger of its preference or its as-converted share. It converts when its share of the whole exit, including the preference it gives up, beats the preference. Classes with the lowest preference per share convert first as the exit rises.
• Fully participating preferred takes its preference and then shares what is left with common, as if converted.
• Capped participating preferred participates until its total reaches the cap (a multiple of the issue price, preference included), and the excess goes to everyone else. It converts to common once its as-converted share beats the cap.
• Options vest in full at the exit and are valued with the treasury method, net of the strike. Options with a strike above the price per share get nothing.

Example: 5M common shares and 5M preferred shares bought at $1.00, 1x non-participating. Below a $10M exit the preferred takes its $5M preference. Above $10M, half the exit is worth more than $5M, so it converts. At $12M each side gets $6M.

This page runs the same waterfall engine as the CapStack GP app. Not modeled here, but handled in the app: accruing dividends, transaction fees, escrow and debt.

Beyond one exit

CapStack GP runs the waterfall across a range of exit scenarios, adds SAFEs and notes, and rolls each holder's proceeds up into fund MOIC.

Related: SAFE conversion calculator · Startup dilution calculator · Rule of 40 calculator

Illustrative model only. Not legal, tax, or investment advice. Real payouts depend on the exact terms in the charter, which can differ from these standard rules.