Liquidating distribution worksheet

I built it from scratch (driven off the cap table model I shared a few weeks ago) and it took me a couple hours to do it. Second, I wanted to do it slightly differently than Andrew and Christina's model.

liquidating distribution worksheet-29

Use this calculator to determine your Required Minimum Distributions.

Last week I pointed out that when your company is sold at price points around or below prices where you have financed your company then your proceeds in a sale transaction will not equal your fully diluted ownership percentage times the sale price.

And you need to know if any of the classes have a liquidation mutiple (1.5x, 2x, etc).

If any of those things are present, put them into the shareholdings section as well.

That residual value per fully diluted share number is imporant.

If that number is higher than the cost per share of the next class, the next class will convert to common in a sale and will not take its liquidation preference.Start with the most senior class of stock (in this case Srs C), and figure out how much of the liquidation preference would be paid out in the specific sale price.Then figure out how much is left for the rest of the shareholder base after that class is liquidated.For the sake of this model, I assumed that all three classes of preferred (Srs A, Srs B, and Srs C) are straight preferred with no multiple or dividends. I also assumed the Srs C is senior to the Series B which is senior to the Series A.If you don't know what any of this stuff means, then I would suggest you head over to Brad Feld's awesome term sheet series and read the section on liquidation preference. The next thing you do is lay out across multiple columns a range of exit values (sale prices). Then in the rows under those sale price headings, you lay out the liquidation waterfall.And then figure out how many fully diluted shares are outstanding after that class is liquidated and taken out of the cap table.