How Does an Exit Waterfall Work — and What Do Founders Actually Take Home?
Looking for how an exit waterfall divides proceeds? Model debt, preferred preferences, participation, and common — why a $40M headline exit is not $40M to the team.
Venture Capital Deal Terms & Term Sheet Guides
Deal terms determine who wins in exit scenarios and how much control investors have over company decisions. Our deal-terms guides explain the economics and governance provisions founders encounter in seed through growth rounds.
Key Deal Terms Explained
- Valuation & equity: Pre-money, post-money, and option pool sizing
- Liquidation preferences: Participating vs. non-participating, multiples
- Control rights: Board seats, protective provisions, and veto rights
- Investor rights: Pro rata, information rights, and drag-along provisions
Read venture capital deal terms explainers below.
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Pre-Money vs Post-Money Valuation: The Math Every Founder Must Understand
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