Exit Waterfall & Liquidation Preference Calculator
Who gets paid what when the company is sold?
In a sale, preferred investors often get their money back first. Small exits can leave founders with much less than their ownership suggests.
How this calculator works
Non-participating: investors take the larger of (invested × multiple) or their ownership % of the exit. Participating: investors take invested × multiple, then their ownership % of what remains. Founders, employees and other common holders get the rest. This models a single class of preferred stock.
Frequently asked questions
What is a 1× non-participating preference?
The most common founder-friendly term: investors either get their money back once or convert to common and share pro-rata — whichever is more — but not both.
Why does this matter?
At lower exit values the preference can take most of the proceeds. Knowing the break-even exit value helps founders judge acquisition offers.
Results are estimates based on the numbers you enter and simplified assumptions. They are not financial advice. See our disclaimer.