Distribution Waterfall
Définition
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.
Comment cela se présente dans le financement
Founders model the waterfall before accepting terms: in modest exits, preferences determine whether common stock receives anything at all.
Questions fréquemment posées
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.
Termes associés
Mettez ce terme en pratique
Les définitions ne gagnent des négociations que lorsque vous y êtes. Trouvez les investisseurs qui financent votre étape et commencez la conversation.
Parcourir la base de données des investisseurs