Model an exit waterfall

Check the records that drive the waterfall

Open Exit scenarios. Before modeling proceeds, review issued shares, preferred-class terms, convertible balances, option strike prices, RSUs, and any recorded acceleration terms. A correct ownership percentage alone is not enough to calculate a sale distribution.

The model uses the current company records and today’s date for its calculations. Unallocated plan capacity does not receive a holder payout. The liquidation preference guide explains why holders with similar ownership percentages can receive different proceeds.

Enter the sale and award assumptions

1. Give the scenario a descriptive name.
2. Enter the Exit value. The app treats this as the total sale price before escrow, fees, and tax; those deductions are not modeled.
3. Choose whether unvested awards at close Participate or are Cancelled.
4. Review Assume a change of control against the recorded acceleration terms.

The change-of-control assumption applies the app’s recorded acceleration logic. A double trigger assumes the holder is also terminated at close. When all unvested awards already participate, acceleration does not change that participation result. These controls model assumptions; they do not determine the actual deal terms.

Read the results in payment order

Start with the Waterfall summary, then review preferred classes, convertibles, award treatment, and proceeds by holder. Inspect the amount actually paid, not just a preference claim or an as-converted comparison.

In this model, convertible notes are treated as debt repayments at exit. SAFEs are evaluated under the modeled cash-out and conversion outcomes. Preferred-class rights affect preference payments and participation in the remainder. If sale proceeds are insufficient, a claim can exceed its payment.

Breakeven points identify modeled sale values where outcomes change. Select one to inspect the waterfall at that value, then compare results above and below it.

Save distinct scenarios

Select Save scenario to retain the sale value and award assumptions. Saving with an existing name updates that scenario. Use a different name to keep another case for comparison.

A saved scenario retains inputs, not a frozen copy of the company. Changes to securities or class terms can change its results when reopened. Saving a scenario does not record an acquisition, distribute money, or close securities. Reconcile modeled proceeds with the final transaction calculations before using them for a real distribution.