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

Annotations already declare readOnly, idempotent and non-destructive, so the safety profile is covered. The description adds genuine modeling context the annotations cannot: the conversion rule (preferred converts when that pays more), the participating-preferred cap, and that options count only above strike. It stops short of noting whether as_of changes results or how rounding/currency behaves, which keeps it off a 5.

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 action and then the waterfall ordering, with the return value stated last. It is dense but every clause carries real information; the semicolon-chained mechanics are slightly hard to scan but nothing is wasted.

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?

With no output schema, the description must explain return values and it does ("payout per stakeholder and per class for each price"), while also covering the calculation rules that determine those values. For a 3-parameter, fully-documented read-only tool, nothing an agent needs to call it correctly is missing.

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 description coverage is 100%, so cap_table, as_of and exit_values are already documented in structured data. The description adds only the mild nuance that multiple prices may be supplied and results come back per price; it adds no syntax or format detail beyond the schema. Baseline 3 applies.

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?

States a specific verb and resource ("divides sale prices of the company among the stakeholders") and then spells out the actual payout order: SAFEs/notes, liquidation preferences by seniority, then per-share. This is far more than a restatement of the name and lets an agent distinguish it from siblings like simulate_funding_round or get_company_valuation.

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 exit/sale scenario is implied by "sale prices of the company" and the plural "one or more sale prices," but there is no explicit statement of when to use this versus simulate_funding_round or get_company_valuation, and no stated prerequisites (e.g. that a cap table must exist). Usage is inferable but not guided.

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