Exit Waterfall Machine - 4weird Games

$100.0M

#EXITVIBES

The headline price is not your payout.

EXIT PROCEEDS: $1,000M

Senior Debt

Venture / Structured Debt ($M)

Series A Preferred

Capital Raised ($M)

Liquidation Preference Multiple

Participating Rights (Double Dip)

Series B Preferred (Senior)

Capital Raised ($M)

Liquidation Preference Multiple

Participating Rights (Double Dip)

Common Equity Pool

Common Stock Pool Share (%)

Note: Common pool represents the founders + employees.

1. The FanDuel Wipeout Medium

Learn the scale-fund paradox where late preference stacks wipe out common stock completely.

🎯 Find exit value where Common gets $1M+

2. Valuation vs. Clean Terms Hard

Compare two term sheets: $60M valuation clean vs. $100M valuation structured with debt.

🎯 Choose the offer that pays founders at $70M exit

3. The Debt Trap Easy

Examine how venture debt stacks senior to preferred stock and common equity in a down exit.

🎯 Experience the $25M exit split

4. Secondary Rescue Medium

Experience how taking modest secondary liquidity during growth de-risks founder lifelines.

🎯 Take secondary and verify the exit payout

1. Underestimating Liquidation Preferences

A participating preference or multiple preference stacks debt-like liabilities senior to common equity. In typical exits, common receives $0 because preferred terms devour the entire price tag.

2. Raising Excess Capital

Oversized rounds increase the minimum exit threshold required for founders to see any return. Valuation optics should never override cap table efficiency.

3. Casual Debt Layering

Venture debt resides at the top of the priority stack. When growth stalls, senior debt drains liquidity first, shutting out all classes below.

4. Loss of Exit Control

Governance and drag-along rights can allow board majorities to force mediocre sale actions against founder alignment thresholds.

5. Failure to Model Cascades

Founders fail to explicitly run exit waterfalls at lower values ($50M, $100M) before signing financing term sheets.

6. Rejecting Early Secondary

Taking modest secondary de-risks founders, reduces board friction, and avoids full personal illiquidity wipeouts.

Senior Debt Payout $0.0M

Preferred Stock Payout $0.0M

Common Stock Payout $0.0M

Senior Debt Paid: $0.0M

Series B Pref Paid: $0.0M

Series A Pref Paid: $0.0M

Founder Common Pool: $0.0M

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