Cap Table / Exit Waterfall
Visor Studio · Valuation · Generated September 21, 2026
Cap Table / Exit Waterfall
Preferred classes + common + option pool. Liquidation preference → participation distribution at exit.
Exit scenario
Preferred classes (junior → senior)
| Class | Shares | Liq. pref | Multiple | Participation | Cap (×) | |
|---|---|---|---|---|---|---|
Ownership pie (pre-money)
- Common46.2%
- Option pool15.4%
- Series A23.1%
- Series B15.4%
Exit distribution
Waterfall distribution
| Payout | Shares | Amount | % of exit |
|---|---|---|---|
| Series B (pref) | 2,000,000 | 10,000,000 | 10.0% |
| Series A (pref) | 3,000,000 | 6,000,000 | 6.0% |
| Common | 6,000,000 | 50,400,000 | 50.4% |
| Option pool | 2,000,000 | 16,800,000 | 16.8% |
| Series A (participation) | 3,000,000 | 0 | 0.0% |
| Series B (participation) | 2,000,000 | 16,800,000 | 16.8% |
v1 does not simulate the “convert-if-better” decision for non-participating preferred. At high exit values, conversion to common may beat liquidation preference — add that in a later pass.
What it calculates
A cap table waterfall models how exit proceeds are actually distributed across preferred shareholders, common shareholders and option holders. Ownership percentages tell you almost nothing about payouts once liquidation preferences are in play, and this shows the difference.
How it is calculated
Proceeds are allocated by seniority. Preferred holders take their liquidation preference first, multiplied by any preference multiple, in order of seniority where the stack is layered. Participating preferred then also shares in the remainder alongside common. Non-participating preferred faces a choice at each exit value: take the preference, or convert to common and take the pro-rata share - whichever is larger. Options are included only where the exit price exceeds their strike.
How to read the result
Plot payout against exit value and look for the flat region, where common holders receive nothing because proceeds are still being consumed by preferences. Find the conversion point, the exit value at which non-participating preferred is better off converting. Below that point ownership percentage is irrelevant to what common actually receives, which is why a headline 20% stake can be worth zero in a modest exit.
Worked example
Investors put in 20,000,000 with a 1x non-participating preference for 40% of the company. At a 40,000,000 exit they can take the 20,000,000 preference or convert for 40% of 40,000,000, which is 16,000,000 - so they take the preference and common splits 20,000,000. The conversion point is 50,000,000, where 40% equals the preference exactly. Above it, converting wins.
Common questions
- What does participating preferred mean?
- The holder takes their liquidation preference and then also shares pro-rata in what remains, so they are paid twice from the same proceeds. It is materially more expensive to common holders than non-participating, and is often capped at a multiple to limit the effect.
- Why can founders receive nothing despite owning a majority?
- Because preferences are paid before common. If preferences total more than the exit value, common holders receive nothing regardless of ownership percentage. This is routine in exits that are respectable in absolute terms but below the total capital raised.
- How do option strike prices affect the waterfall?
- Options only participate when the per-share proceeds exceed their strike, and the strike money paid in is added to the proceeds pool. Deep out-of-the-money options simply drop out of the calculation, which raises the payout for everyone else.
Keep this calculation
This calculator is free and always will be. A free account saves your scenarios so you can reopen and adjust them, and paid plans add a shared team workspace, version history, comments and Excel export.