Overview of Exit Waterfall in Scenario Modeling

Skip ahead to:

1. Navigating to Exit Waterfall
2. Completing the Excel Model
3. Understanding Exit Waterfall Calculations 
4. My Shares
5. Distributions
6. Cap Table 
7. FAQs/Commonly Addressed Concerns

Exit Waterfall Modeling is critical to seeing your fund’s expected distributions, liquidation preferences, and conversion breakpoints for valuation, reporting, and performance tracking workflows. Aumni’s Exit Waterfall feature helps you easily understand your distributions at different exit values by providing a robust and organized cap table, key securities details, and a liquidation preference stack.

Navigating to Exit Waterfall

There are two ways to navigate to Exit Waterfall:

1. In the Scenarios tab on the sidenav, by clicking Exit Waterfall in the top right corner.
2. On a specific Company Page, by clicking on Scenarios and “Download Exit Waterfall.”

If you access Exit Waterfall from the Scenarios tab, populate the search bar with a Portfolio Company and click Download. An Excel file will be generated.

Completing the Excel Model

After opening the Excel file, you must populate three cells for your Exit Waterfall to fully populate calculated values. For further information, refer to the Getting Started section in the Excel file.

1. Exit Equity Value
2. Strike Price for Warrants
3. Strike Price for Options

Understanding Exit Waterfall Calculations 

• Blue text within the Exit Waterfall is hard-coded data in the Excel sheet sourced from the Aumni database.
• Black text within the Exit Waterfall relates to formula calculations. This is based on the cap table and the value in the “Exit Equity Value” cell that you inputted.

The following sections highlight several rows and define terms for your further context.

My Shares

If you have multiple funds invested in the company, the My Shares section of the Exit Waterfall will have a row for each fund. 

*MOIC stands for Multiple on Invested Capital

 Distributions

• Convert
  • This row indicates whether an equity class will convert to Common or take the applicable liquidation preference based on the value inputted into the ‘Exit Equity Value’ cell. If the equity class will convert to Common and participate pro rata, TRUE will populate the cell; if not, then FALSE will populate the cell. 
• Liq Pref Received
  • This row informs you how much of a liquidation preference you will receive based on the value inputted in “Exit Equity Value.” 
• Distributions to Common
  • This row informs you of the proceeds you will receive as part of the Exit if your shares are converted to common stock. 

Cap Table 

• Senior Liq Pref
  • This row represents how much money is ahead of your investment that will take proceeds out of the deal before your funds will begin to participate (i.e., receive proceeds from the exit) 
• Agg Remaining Liq Pref
  • This row represents how much liquidation preference remains after all senior equity holders are distributed their proceeds. 
• Participating Shares at Conversion 
  • This row represents how many shares exist with a lower Common Price Per Unit than those in that Equity Class column. This is important because as the exit value increases, the shares with lower Original Issue Prices will convert to Common and participate sooner. 
  • This number represents the shares converting to Common when the given equity class converts to Common instead of taking the liquidation preference.
• Participating Equity Value 
  • This number represents the remaining proceeds after an equity class, and those senior to it, receive their liquidation preference. This amount is distributed to equity classes with a lower Common Price Per Unit that is converted to Common.
• Total Equity Value 
  • The amount at which the company must sell in order for the certain equity class to convert to Common and participate pro rata. (“Breakpoint”)

Please note that Aumni’s Exit Waterfall feature does not work for the following:

• Unaccommodated Investment
• Portfolio companies in which a Convertible Note or SAFEs are the only investments.

FAQs/Commonly Addressed Concerns

• What does "FALSE" mean in the Exit Waterfall export Convert row? False means the equity class will not convert to Common Stock and will be distributed some or all of its liquidation preferences. When the Convert row is "FALSE," the Liq Pref Received row will have a value. When the Convert row is "TRUE," Liq Pref Received row will not have a value, and the Distributions to Common row will have a value.

Interested in learning about Aumni’s Round Modeling feature? Click here.