Startup exit · Preferred stock

Liquidation Preference Calculator

Compare preferred-stock payout rights with common-stock conversion and estimate how exit proceeds are divided.

Exit and preference terms

CurrencyExit proceedsPreferred investmentLiquidation preference multipleAs-converted ownership (%)Participation typeParticipation cap multiple

Estimated distribution

Contract preference amount—

As-converted payout—

Recommended election—

Preferred investor payout—

Common holders payout—

Participation component—

Investor share of proceeds—

Investor return multiple—

Common conversion threshold—

Unallocated proceeds—

How this exit waterfall works

Non-participating preferred receives the greater of its contractual preference or its as-converted common payout. Participating preferred first receives its preference and then shares the remaining proceeds on an as-converted basis. Capped participation limits that total return, while still allowing common conversion if it pays more.

The NVCA model legal documents present alternative venture-financing terms, but exact definitions, seniority, dividends, multiple preferred series and transaction costs can change the waterfall. Use signed documents and qualified legal and tax advice. This calculator is educational, not legal or investment advice.