Liquidation Preference Calculator
Understand how investors and founders get paid at exit. Model non-participating vs participating preferred.
Deal Parameters
Exit & InvestmentTotal amount invested by preferred shareholders
Percentage owned by preferred shareholders
Preference Terms
Multiple & TypeInvestor takes greater of preference OR pro-rata
Key Metrics
Liquidation Preference
$10.00M
1x x $10.00M
Investor Pro-Rata Value
$12.50M
25% of $50.00M
Conversion Point
$40.00M
Exit where pro-rata > preference
Exit Payouts
At $50.00M exitInvestor Payout
$12.50M
25.0% of exit
ConvertedFounder/Common Payout
$37.50M
75.0% of exit
Waterfall Breakdown
Investor converts, gets 25.0% = $12.50M
Key Insights
Investors converted to common stock because pro-rata ($12.50M) exceeds preference ($10.00M).
Investor ROI at this exit: 125.0% (1.25x)
Preference Comparison
At $50.00M exitExit Scenarios
Payouts across exit valuesRed line: Liquidation preference ($10.00M)
Orange line: Current exit value ($50.00M)
Quick Reference
This calculator provides educational estimates for understanding liquidation preferences. Actual exit distributions depend on specific term sheet language, multiple investor classes, and other factors. Consult with legal and financial advisors for your specific situation.
Want to learn more?
Understand how liquidation preferences work, including non-participating vs participating preferred, and how they impact founder payouts at exit.
Read the complete guide