See how exit proceeds split between investors and common holders under a liquidation preference, with or without participation. The result updates as you type so you can compare scenarios quickly.
The method
Keep in mind
Use the calculator to compare scenarios rather than as a guaranteed forecast.
See how an exit is split between investors and common holders under a liquidation preference, and what participation costs founders.
Preferred receives the greater of its preference (invested times multiple) and its pro-rata share if non-participating; the preference plus a pro-rata share of the rest if participating, subject to any cap. Common shares the remainder.
On a £30m exit with £8m invested at 1× for 35%, non-participating preferred takes £10.5m and a 1% common holder gets about £300,000. With full participation the same holder gets about £250,000.
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Worked out from your figures above. Tap a row to try it.
Who uses it, and when
Founders and employees reading a term sheet or planning for an exit.
Mistakes worth avoiding
Questions
See how exit proceeds split between investors and common holders under a liquidation preference, with or without participation.
Preferred receives the greater of its preference (invested times multiple) and its pro-rata share if non-participating; the preference plus a pro-rata share of the rest if participating, subject to any cap. Common shares the remainder.
The core calculation or transformation runs in your browser. Normal website security and analytics may still record page-level events, but the tool does not need to create a public record from your inputs.
Assuming everyone is paid pro-rata. Forgetting later rounds are usually senior to earlier ones. Overlooking that options and debt come out before common.
No. Use the result as a practical check or planning aid and verify important decisions with the relevant primary source, provider or professional advice.
Executive Insights
Results are estimates based on the figures entered, for general information only, and not financial, investment, tax or legal advice. See our terms of use.
