Cap Table Waterfall
A calculation showing exactly how sale or liquidation proceeds get distributed across every shareholder class, in the specific order their rights entitle them to be paid.
Quick Answer
Why can't I just divide exit proceeds by ownership percentage?
Because liquidation preferences change the payout order — preferred shareholders are typically paid their preference amount first, before any pro-rata distribution occurs, so simple percentage math misrepresents actual payouts.
- Liquidation preferences override simple percentage math
- Payout order follows seniority, not ownership percentage alone
- Multiple preferred classes require modeling in sequence, not in parallel
The Lovie Advantage
Lovie's waterfall calculator applies your actual preference stack automatically, instead of a simplified percentage estimate.
See how this connects to Exit Waterfall. For the formal definition, see Investor.gov's glossary entry on annual return.
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