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Key Takeaways Even a fast-growing, high-valuation startup can leave founders with nothing if they don’t understand how the exit waterfall determines who gets paid first.
Learn how to protect your equity, negotiate smarter funding terms and structure your company so your hard work actually pays off.
In 2023, my company, UNest, looked like a success story. We had over 700,000 users, a $120 million valuation and several promising M&A conversations underway. I had spent five years building a product I believed in — a financial platform that helped families save and invest for their children’s future.
On paper, everything pointed to a strong, profitable next chapter.
Then the Silicon Valley Bank collapse changed everything. Practically overnight, the market froze, our M&A talks paused and access to capital vanished. During that uncertain stretch, I had a call with our lenders that would completely change how I understood startup outcomes — and, ultimately, how I think every founder should approach funding.
That conversation introduced me to the exit waterfall — the framework that determines who gets paid when a company sells or restructures. I realized something few founders learn until it’s too late: you can build a successful company and still walk away with nothing.
Because in the exit waterfall, structure is strategy.
Related: When My Company Hit $100 Million in Revenue, I Realized It Was Time to Become an Employee Again
What the exit waterfall really means
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