MergerWaterfallStart modeling free
Why Merger Waterfall03 · Final spreadsheets, auditably right

The closing spreadsheet that proves its own math.

The spreadsheet that goes to the paying agent is the one document nobody can get wrong. Merger Waterfall exports it with live formulas, built-in checks and an audit trace for every dollar, from the version you locked at closing.

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Exported workbook · Summary
The Summary sheet of the workbook Studio exports for the Northwind / Atlas closing run: deal details, $15,000,000 enterprise value, $11,850,000 net equity proceeds, three validation checks all reading OK, and the deal waterfall chart.

“The funds-flow spreadsheet has to be right, and I have to prove it.”

Who it's for

The same problem, asked three ways.

Sell-side advisors

Bankers, M&A advisors, fractional CFOs

“Can I hand this to the buyer's team without a week of tie-outs?”

A workbook whose checks re-run when anyone opens it.

Company counsel

Deal and venture attorneys for the company

“If this is challenged in two years, can we show how each payout was reached?”

A locked closing snapshot and a step-by-step audit trace.

The company

Founders, the CFO, the board, employees

“How do we know every employee got the right amount?”

Per-holder totals that reconcile to the purchase price, to the dollar.

Why use Merger Waterfall for this

What you see in the product.

01

Checks that re-run in Excel

The Summary sheet carries three validation checks as live formulas. Change a cell and the file tells you whether it still ties out.

  • Purchase-price bridge ties to net equity proceeds
  • Closing class distribution ties to closing proceeds
  • Holder distribution ties to net equity proceeds
Exported workbook · Summary
The Summary sheet of the workbook Studio exports for the Northwind / Atlas closing run: deal details, $15,000,000 enterprise value, $11,850,000 net equity proceeds, three validation checks all reading OK, and the deal waterfall chart.

02

Every holder, every class, to the dollar

Results by holder and by class, with the cap table and the preference terms on their own sheets, in the form the paying agent expects.

  • Eight sheets, from offer to holders
  • Same numbers as the screen and the share links
Exported workbook · Results — Holders
The Results — Holders sheet of the exported workbook, listing each holder's proceeds by class with totals.

03

A trace for every dollar

The Audit Trace sheet lists each step the engine took: which preference was paid, in what order, and what remained. Anyone can follow the money without the model.

  • Step, description, amount and remaining
  • At closing and in total
Exported workbook · Audit Trace
The Audit Trace sheet of the exported workbook: each engine step with its description, amount, remaining proceeds and class, at closing and in total.

04

Locked at closing

Lock the run you close on. A closing snapshot cannot be edited or removed, so the spreadsheet you exported is the one you can always reproduce.

  • One closing snapshot per deal
  • Later edits never touch it
Distribution · Runs
The Runs list in Studio with three versions: 'LOI — $14.0M offer' at $10.85M, 'Signing draft — $15.0M' at $11.85M, and 'Closing' at $11.85M marked as a locked closing snapshot.

Deal scenarios

Where this comes up, with the numbers.

Each scenario changes one thing on the Northwind / Atlas demo deal and shows what every holder receives before and after. Computed by the same engine Studio runs.

Scenario 1LOI → signingDemo · Northwind / Atlas

The price went up $1M. What does that do for us?

What changed
LOI at $14.0M; signed at $15.0M (+7%)
Usually raised by
Sell-side advisor, reporting the buyer's revised offer

A 7% higher price more than doubles the founders' proceeds: Dana goes from $283k to $617k. Series B, already paid in full, does not move.

HolderLOI · $14.0MSigned · $15.0MChange
Meridian Ventures II

Series B lead

$6.00M$6.00M—
Cardinal Capital

Series A fund

$4.21M$4.46M+$250k
Dana Reyes

Founder · CEO

$283k$617k+$333k
Sam Okoro

Founder · CTO

$213k$463k+$250k
Employee RSAs

Common pool

$70.83k$154k+$83.33k
Option Holders

ITM options

$70.83k$154k+$83.33k
Net equity proceeds$10.85M$11.85M$1.00M

Why: The extra $1M arrives after the preferences are covered, so it is shared by the participating Series A, common and the option holders.

Computed by the Merger Waterfall engine · every column ties to its proceeds

Scenario 2Signing → closingDemo · Northwind / Atlas

How much of our money is actually paid at closing?

What changed
$1.5M escrow and $1.5M earnout withheld; only closing proceeds distributed
Usually raised by
Founders and the board, reading the consideration mix

Every dollar the founders receive depends on the escrow and earnout. If neither releases, $8.85M is distributed and common receives $0.

HolderAll consideration paidClosing onlyChange
Meridian Ventures II

Series B lead

$6.00M$6.00M—
Cardinal Capital

Series A fund

$4.46M$2.85M−$1.61M
Dana Reyes

Founder · CEO

$617k—−$617k
Sam Okoro

Founder · CTO

$463k—−$463k
Employee RSAs

Common pool

$154k—−$154k
Option Holders

ITM options

$154k—−$154k
Net equity proceeds$11.85M$8.85M-$3.00M

Why: Closing proceeds of $8.85M cover Series B's $6M and part of Series A's $4M preference. Common is paid only from the deferred $3M.

Computed by the Merger Waterfall engine · every column ties to its proceeds

Scenario 3Signing → closingDemo · Northwind / Atlas

The buyer raised the tax holdback. Who pays for it?

What changed
Tax withholding $450k → $500k
Usually raised by
Buyer's counsel, in the last turn of the purchase agreement

The extra $50k comes entirely out of the junior holders: Series A participation, common and options. Dana gives up $16,667; Series B is untouched.

HolderHoldback $450kHoldback $500kChange
Meridian Ventures II

Series B lead

$6.00M$6.00M—
Cardinal Capital

Series A fund

$4.46M$4.45M−$12,500
Dana Reyes

Founder · CEO

$617k$600k−$16,667
Sam Okoro

Founder · CTO

$463k$450k−$12,500
Employee RSAs

Common pool

$154k$150k−$4,167
Option Holders

ITM options

$154k$150k−$4,167
Net equity proceeds$11.85M$11.80M-$50.00k

Why: A deduction reduces net equity proceeds from the bottom of the waterfall up, so junior holders absorb it first.

Computed by the Merger Waterfall engine · every column ties to its proceeds

Scenario 4Signing → closingDemo · Northwind / Atlas

Deal costs came in $250k over. Does the spreadsheet still tie out?

What changed
Transaction expenses $1.00M → $1.25M
Usually raised by
The CFO, collecting final invoices the week of closing

Common and option holders give up $187.5k of the $250k; Series A participation gives up $62.5k. Dana's proceeds fall to $533k, and the funds flow must be re-issued.

HolderExpenses $1.00MExpenses $1.25MChange
Meridian Ventures II

Series B lead

$6.00M$6.00M—
Cardinal Capital

Series A fund

$4.46M$4.40M−$62.50k
Dana Reyes

Founder · CEO

$617k$533k−$83.33k
Sam Okoro

Founder · CTO

$463k$400k−$62.50k
Employee RSAs

Common pool

$154k$133k−$20,834
Option Holders

ITM options

$154k$133k−$20,834
Net equity proceeds$11.85M$11.60M-$250k

Why: Expenses come off the purchase price before equity is paid, so the change flows through every junior line. A new run re-proves the totals.

Computed by the Merger Waterfall engine · every column ties to its proceeds

Go deeper

The capabilities behind it.

Waterfall rollbacks and versions

Every run is kept as it was computed. The closing version is locked.

See it in the product

Consistently created from source documents

Terms come out of the charter and the cap table export, each one citing its clause.

See it in the product

Next problem

Deal terms, made clear

“Nobody can tell me what this term means for my check.”

Read it
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Bring the cap table export and the charter. Leave with a distribution spreadsheet you can hand to the board, the buyer and the auditor.

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