{"id":9583,"date":"2026-08-03T18:35:24","date_gmt":"2026-08-03T16:35:24","guid":{"rendered":"https:\/\/www.quantum-partners.de\/glossary\/waterfall\/"},"modified":"2026-08-03T18:35:24","modified_gmt":"2026-08-03T16:35:24","slug":"waterfall","status":"publish","type":"b5_glossar","link":"https:\/\/www.quantum-partners.de\/en\/glossary\/waterfall\/","title":{"rendered":"Waterfall"},"content":{"rendered":"

The waterfall provision determines the order in which proceeds from an exit or a liquidation are distributed among the different classes of capital. Typically, debt is served first, then preferred shares with liquidation preferences, and finally common equity.<\/p>

For founders and management, understanding the waterfall logic is decisive to assess realistically the actual payout in different exit scenarios, in particular where there are multiple stacked preferences and ratchet structures.<\/p>","protected":false},"excerpt":{"rendered":"

The waterfall provision determines the order in which proceeds from an exit or a liquidation are distributed among the different classes of capital. 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