Equity Pooling Simulator
Equity pooling is a financial tool that diversifies a concentrated private stock position, normally acquired through stock options or founder shares. Use of pooling reduces risk and maximizes the economic outcome of this position. This simulator visualizes such outcomes.
This simulator visualizes the likely outcomes of pooling your stock into a diversified portfolio. Each dot on the graph represents a possible outcome. The greater the density of dots, the more likely such an outcome. The x-axis inidicates the average time it will take to realize a cash liquidation. In many scenarios, indicated by the color of the dots, you will have multiple liquidity events. In such a scenario the x-axis represents the average timing. The y-axis indicates the cash value you will receive from the pool as a multiple of the paper value contributed.