Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already declare readOnlyHint and openWorldHint, so the read-only nature is covered. The description adds the product requirement (API key), which is useful behavioral context not in the annotations. It also states the operation distributes an exit valuation across the cap stack, providing insight into the computation.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Is the description appropriately sized, front-loaded, and free of redundancy?

Two sentences, front-loaded with the core purpose, followed by access requirement and input hints. Every sentence earns its place with no redundancy.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

The description covers purpose, access, and input reference, and annotations handle safety. However, with no output schema, it does not explain what the tool returns (e.g., a distribution schedule or a waterfall report). This is a noticeable gap for a compute tool with a nested model input.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 100%, so the schema documents both parameters. The description adds value by instructing to pass a 'model' object and numeric 'exitValuation', and also directs users to list_concepts for the model structure, which is not in the schema. This supplementary reference improves semantic clarity.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Does the description clearly state what the tool does and how it differs from similar tools?

The description clearly states 'Computes an exit waterfall' with a specific resource (cap stack) and scope (preferences, participation, conversions, options, warrants). It distinguishes from siblings like cap_table_compute and fund_economics_compute by focusing on exit valuation distribution.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Does the description explain when to use this tool, when not to, or what alternatives exist?

The description indicates when to use the tool (when computing an exit waterfall) and explicitly states the prerequisite: 'Requires a Hemrock API key with the Cap Table & Exit Waterfall product.' It implies this is the right tool for exit waterfall calculations, though it doesn't explicitly mention alternatives or when not to use it.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.