adamriofc VC Startup Exit Liquidation Preference Waterfall
Calculates share payout distributions for Indonesian venture capital investor tiers (Series Seed, Series A, Series B) and common shareholders (founders/employees) during M&A or exit events under Indonesian Company Law (UU No. 40/2007).
Waterfall Distribution Mechanics
- Conversion Evaluation: Evaluates whether non-participating preferred shares achieve higher returns by converting into Common Shares.
- Seniority Preference Waterfall: Distributes liquidation preference payouts in order of tier seniority (e.g. Series B ➔ Series A ➔ Seed).
- Participating Pro-Rata Distribution:
- Participating Preferred: Receives preference payout plus pro-rata share of remaining exit proceeds.
- Cap Limits: Enforces participation cap multiples (e.g. 2x or 3x Cap limit on total investment return).
- Non-Participating Preferred: Does not participate in remaining proceeds after receiving preference payout unless converted.
- Common Shareholders Pool: Remaining exit proceeds after all preferred obligations are distributed to founders and ESOP pools.
Hybrid Execution Model
Pass parameters to engines/term-sheet-waterfall.js:
calculateExitWaterfall({ exitValuation, investorTiers, commonOwnershipPercent })
Worked Example
Input: Exit Valuation Rp 100.000.000.000 (Rp 100B).
- Series B: Rp 20B investment, 1.0x Senior preference, Participating, 15% ownership.
- Series A: Rp 10B investment, 1.0x Pari Passu preference, Non-Participating, 20% ownership.
- Founders / Common: 65% ownership. Output:
- Series B preference payout: Rp 20.000.000.000.
- Series A converts to Common (20% of 100B = 20B > 10B preference payout).
- Remaining pool after B preference = Rp 80.000.000.000.
- Series B Participating share (15% / 100%) = Rp 12.000.000.000 (Total B payout = Rp 32B / 1.6x).
- Series A converted share = Rp 20.000.000.000 (2.0x).
- Founders / Common share = Rp 48.000.000.000.