Distribution Waterfall
Definition
The distribution waterfall is the order in which exit proceeds are paid: debt first, then liquidation preferences by seniority, then common shareholders, with participating preferred complicating the flow.
Wie es im Fundraising vorkommt
Founders model the waterfall before accepting terms: in modest exits, preferences determine whether common stock receives anything at all.
Häufig gestellte Fragen
Why can a $40M exit pay founders little?
If the company raised $35M with 1x preferences, investors take $35M first; the remaining $5M splits among common holders and options.
What makes a waterfall founder-friendly?
1x non-participating preferences, pari passu between series, and total capital raised kept proportional to realistic exit sizes.
Verwandte Begriffe
Setzen Sie diesen Begriff ein
Definitionen gewinnen nur dann Verhandlungen, wenn Sie sich in einer befinden. Finden Sie die Investoren, die Ihre Phase finanzieren, und beginnen Sie das Gespräch.
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