Find out what you would take home if your startup is acquired. This free startup exit calculator models liquidation preferences, the term that decides whether a headline exit number becomes a large payout for founders or a disappointing one. No signup, and we don’t capture any data from your entries.
Enter an exit value and your ownership to see your take-home.
How this is calculated
The model treats all investor capital as one preference stack. Non-participating (modeled at 1×): investors take the larger of their preference (money back) or their as-converted share of the exit; whatever remains goes to common holders pro-rata. Your share of common is your % ÷ (100% − investor %). Participating: investors take the preference multiple × their money back AND share pro-rata in the remainder. Simplifications: single stack (no seniority tiers), no participation caps, no debt, escrow, or carve-outs, and options are treated as plain common. Educational estimates, not legal or financial advice.
How to use this calculator
- Enter the exit value. This is the acquisition price (or IPO value) you want to test.
- Enter your ownership at exit. Use the figure after all dilution. If you have not modeled that yet, run the SAFE dilution calculator first. It will bring your numbers here automatically.
- Enter the preference stack. This is the total capital investors have put in, and their combined ownership. Every preferred dollar is paid back before common stock receives anything.
- Check the ladder. The table shows your take-home at half, double, and triple the exit you entered, and the breakeven point where preferences stop mattering.
The terms, in plain English
Liquidation preference
A liquidation preference gives preferred investors the right to get their money back before common shareholders (founders and employees) receive anything. The standard term is 1× non-participating: one times their investment back, or their ownership share of the exit, whichever is larger. Higher multiples (2×, 3×) appear in tough markets and are a red flag for founders.
Non-participating vs. participating preferred
Non-participating investors choose either the preference or their ownership share, not both. Participating preferred (the “double dip”) takes the money back and a pro-rata share of what remains. On a $50M exit with $30M raised and investors owning 40%, that difference alone can move a 30% founder from a $10M outcome to a $6M outcome. Try it in the calculator above.
The preference stack
Every priced round adds its capital to the stack of money that must be repaid first. The more you raise, the higher the exit has to be before common stock is worth anything. So “raise as much as you can” and “maximize founder outcome” are different strategies.
Conversion (why big exits ignore preferences)
Non-participating investors convert to common whenever their ownership share of the exit is worth more than their preference. Above that breakeven (stack ÷ investor ownership), everyone gets their percentage. Preferences only change outcomes in modest exits, and unfortunately that is where most exits happen.
What happens when your startup is acquired
The money is paid out in a fixed order, called the waterfall: debt and transaction costs first, then the liquidation preference stack (most senior round usually first), then common shareholders. Along the way, part of the price is typically held in escrow (for 12 to 24 months, to cover surprises), some may be an earnout tied to future performance, and acquirers often carve out retention packages for the team. All of these come out of, or ahead of, the headline number. This calculator models the preference layer, the part your term sheets already decided.
Frequently asked questions
How much do founders make when a startup is acquired?
Ownership percentage × exit value, minus whatever the preference stack takes first. A founder with 30% of a $50M exit holds $15M on paper. If investors put in $30M for 40% with 1× non-participating preferences, the take-home is $10M, and with participating preferred it is $6M. The deal structure matters as much as the price.
What is a 1× liquidation preference?
The investor’s right to receive one times their investment back before common stock is paid. It is the market standard. For non-participating preferred, it protects the investor’s downside and adds nothing to their upside.
Why do founders sometimes get nothing in a large exit?
When the exit is at or below the preference stack. A company that raised $100M and sells for $90M is a “$90M exit” in the press and a zero for common shareholders, because the entire price goes to repaying preferences. High valuations financed by big rounds raise this floor quietly.
How accurate is this exit calculator?
It models a single 1× preference stack without seniority tiers, participation caps, escrow, or earnouts. It shows the shape of the outcome, not the closing statement. Real waterfalls are computed per series on your cap table by your lawyers. These are educational estimates, not legal or financial advice.
To work the problem from the start, model dilution with the SAFE dilution calculator, learn what to push back on in term sheet negotiation, and browse all our free startup tools.