Waterfall IQLearn
Understand your exit before you sign.
Short, plain guides with worked examples you can check by hand. Written by Vivek Dabodiya, a valuation professional.
Basics · 8 min
What is an exit waterfall?
The order proceeds are paid, from debt to preferences to common, with a worked example.
Founders · 6 minWhy 20% ownership is not 20% of the sale
The same stake can be 83% or 20% of the proceeds. Here is the arithmetic.
Terms · 9 minLiquidation preference: participating or not?
1x, 2x, participating, capped. What each term is worth in dollars.
SAFEs · 8 minSAFEs in an exit: cap, discount and a low sale
What a SAFE receives at different prices, and why it is not one number.
Deals · 7 minFrom headline price to cash in hand
Escrow, holdbacks and earnouts: why expected is not paid, and how to compare offers.
Practice · 6 minHow to check someone else's waterfall
A short method for finding why two allocations differ.
Valuation · 9 minBreakpoints: the map behind equity valuation
How the same breakpoints that drive a waterfall power the option pricing method.
Want the numbers on your own cap table?
Everything in these guides can be tried on a sample company. Open the tool.