Waterfalls
Distribution economics, hurdle rates, promote mechanics, and sponsor carry models.
119 terms
Operating lens
How do proceeds move through return of capital, preferred return, catch-up, carry, and reserves?
Operating uses
- Translate LPA or operating-agreement economics into model logic.
- Compare American, European, deal-by-deal, and hybrid distribution structures.
- Review sponsor promote, clawback, tax distribution, and reserve mechanics before distributions.
Quality checks
- Waterfall formulas match governing documents and capital-account records.
- Catch-up, hurdle, clawback, and escrow mechanics are separately tested.
- Distribution notices explain the calculation and retained assumptions.
SponsorBeast hubs
Related operating clusters
Independent Sponsors
Deal-by-deal ownership
Search Funds
Acquisition entrepreneurship
SPVs
Special purpose vehicles
LP Reporting
Investor communication systems
Waterfalls
Distribution mechanics
Portfolio Operations
Ownership execution
Data Rooms
Diligence infrastructure
Capital Calls
Capital movement
Capital Formation
LP development
Sponsor Economics
Fees, carry, and alignment
American Waterfall
An American waterfall pays sponsor carry deal by deal, which can accelerate sponsor economics before the entire fund or vehicle is fully reconciled.
Carry
Carry is a structure used in waterfall economics to clarify ownership, evidence, timing, and the next decision.
Carry Allocation
Carry Allocation is a structure used in waterfall economics to clarify ownership, evidence, timing, and the next decision.
Carry Holdback
Carry Holdback is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Carry Model
Carry Model is a model sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Catch-Up
A catch-up is the waterfall tier that lets the sponsor receive a larger share of proceeds after the preferred return until the negotiated profit split is restored.
Catch-Up Cap
Catch-Up Cap is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Catch-Up Model
Catch-Up Model is a model sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Catch-Up Rate
Catch-Up Rate is a structure used in waterfall economics to clarify ownership, evidence, timing, and the next decision.
Clawback Netting
Clawback Netting is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Clawback Obligation
Clawback Obligation is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Clawback Reserve
Clawback Reserve is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Compounded Preferred Return
Compounded Preferred Return is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Compounding Hurdle
Compounding Hurdle is a structure used in waterfall economics to clarify ownership, evidence, timing, and the next decision.
Cumulative Preferred Return
Cumulative Preferred Return is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Deal-Level Waterfall
Deal-Level Waterfall is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Distribution Allocation
Distribution Allocation is a process used in partnership tax, investor onboarding, allocation, withholding, and tax reporting to clarify economics, records, responsibility, and timing.
Distribution Model
Distribution Model is a model sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Distribution Reserve
Distribution Reserve is a structure used in waterfall economics to clarify ownership, evidence, timing, and the next decision.
Distribution Scenario
Distribution Scenario is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Distribution Sweep
Distribution Sweep is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Distribution Tier
Distribution Tier is a structure used in waterfall economics to clarify ownership, evidence, timing, and the next decision.
Distribution Waterfall
Distribution Waterfall is a structure sponsors and LP finance teams use to control return of capital, preferred return, catch-up, promote, residual split, reserves, and clawback or true-up in waterfall economics.
Escrowed Carry
Escrowed Carry is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Escrowed Promote
Escrowed Promote is an economic control sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
European Waterfall
A European waterfall waits to pay sponsor carry until investors have recovered capital and cleared return thresholds across the full fund or agreed pool.
Final Clawback True-Up
Final Clawback True-Up is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Final Distribution
Final Distribution is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Full Catch-Up
Full Catch-Up is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Fund-Level Waterfall
Fund-Level Waterfall is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
GP Catch-Up
GP Catch-Up is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
GP Giveback
GP Giveback is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Giveback
Giveback is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Gross Waterfall
Gross Waterfall is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Hurdle Rate
The return threshold that must be met before a sponsor earns carry or promote.
Hurdle Reset
Hurdle Reset is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Hurdle Shortfall
Hurdle Shortfall is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Hybrid Waterfall
Hybrid Waterfall is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
IRR Hurdle
IRR Hurdle is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Interim Clawback Test
Interim Clawback Test is a control standard sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Interim Distribution
Interim Distribution is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Investor Catch-Up
Investor Catch-Up is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
LP Giveback
LP Giveback is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Lookback Provision
Lookback Provision is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
MOIC Hurdle
MOIC Hurdle is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Net Waterfall
Net Waterfall is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Netting Mechanism
Netting Mechanism is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Non-Compounding Hurdle
Non-Compounding Hurdle is a structure used in waterfall economics to clarify ownership, evidence, timing, and the next decision.
Non-Cumulative Preferred Return
Non-Cumulative Preferred Return is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Partial Catch-Up
Partial Catch-Up is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Preferred Return
A preferred return is the investor-first return threshold that must be satisfied before the sponsor begins earning promote or carry.
Preferred Return Accrual
Preferred Return Accrual is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Preferred Return Shortfall
Preferred Return Shortfall is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Preferred Return Stopper
Preferred Return Stopper is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Preferred Return Tier
Preferred Return Tier is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Profit Split
Profit Split is a structure used in waterfall economics to clarify ownership, evidence, timing, and the next decision.
Promote Accrual
Promote Accrual is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Promote Crystallization
Promote Crystallization is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Promote Crystallization Event
Promote Crystallization Event is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Promote Dilution
Promote Dilution is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Promote Model
Promote Model is a model sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Promote Split
Promote Split is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Recallable Distribution
Recallable Distribution is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Recallable Proceeds
Recallable Proceeds is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Recycling Cap
Recycling Cap is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Reinvestment Distribution
Reinvestment Distribution is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Residual Split
Residual Split is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Return Multiple Threshold
Return Multiple Threshold is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Return of Capital Tier
Return of Capital Tier is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Simple Preferred Return
Simple Preferred Return is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Sponsor Catch-Up
Sponsor Catch-Up is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Tax Distribution
Tax Distribution is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Tax Distribution Offset
Tax Distribution Offset is a metric sponsors, LP finance teams, and fund administrators use inside preferred return calculation, promote timing, distribution reserves, clawback review, and final true-up when the detail is too important to leave as informal context.
Tax Distribution True-Up
Tax Distribution True-Up is a process used in partnership tax, investor onboarding, allocation, withholding, and tax reporting to clarify economics, records, responsibility, and timing.
Tax Distribution Waterfall
Tax Distribution Waterfall is a process used in partnership tax, investor onboarding, allocation, withholding, and tax reporting to clarify economics, records, responsibility, and timing.
Tiered Waterfall
Tiered Waterfall is a structure used in waterfall economics to clarify ownership, evidence, timing, and the next decision.
True-Up
True-Up is a structure used in waterfall economics to clarify ownership, evidence, timing, and the next decision.
Waterfall
A waterfall is the payout sequence that determines when investor capital is returned, when preferred returns are satisfied, when the sponsor earns promote, and how remaining proceeds are split.
Waterfall Allocation Table
Waterfall Allocation Table is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Audit Trail
Waterfall Audit Trail is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Waterfall Cash Flow Map
Waterfall Cash Flow Map is a visual control used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Catch-Up
Waterfall Catch-Up is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Diagram
Waterfall Diagram is a visual control used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Distribution Ladder
Waterfall Distribution Ladder is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Alignment Grid
Waterfall Economics Alignment Grid is a visual control used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Carry Reserve
Waterfall Economics Carry Reserve is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Catch-Up
Waterfall Economics Catch-Up is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Distribution Ladder
Waterfall Economics Distribution Ladder is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Economic Reset
Waterfall Economics Economic Reset is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Fee Offset
Waterfall Economics Fee Offset is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Grid
Waterfall Economics Grid is a visual control used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Gross-Up
Waterfall Economics Gross-Up is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Hurdle Math
Waterfall Economics Hurdle Math is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Memo
Waterfall Economics Memo is a memo used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Model
Waterfall Economics Model is a model used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Payout Map
Waterfall Economics Payout Map is a visual control used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Profit Split
Waterfall Economics Profit Split is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Reserve
Waterfall Economics Reserve is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Return Threshold
Waterfall Economics Return Threshold is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Schedule
Waterfall Economics Schedule is a timing system used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Split
Waterfall Economics Split is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Stack
Waterfall Economics Stack is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics Tiering
Waterfall Economics Tiering is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Economics True-Up
Waterfall Economics True-Up is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Hurdle
Waterfall Hurdle is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Waterfall Legal Review
Waterfall Legal Review is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Waterfall Memo
Waterfall Memo is a memo used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Model
Waterfall Model is a financial model used in waterfall economics to clarify ownership, evidence, timing, and the next decision.
Waterfall Policy
Waterfall Policy is an operating plan used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Reserve
Waterfall Reserve is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Schedule
Waterfall Schedule is a timing system used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Sensitivity
Waterfall Sensitivity is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Waterfall Sequence
Waterfall Sequence is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Split
Waterfall Split is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Stack
Waterfall Stack is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall Step-Up
Waterfall Step-Up is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Waterfall Threshold
Waterfall Threshold is a metric sponsors and LP finance teams use in waterfall and distribution economics to make ownership, evidence, timing, and the next decision clear.
Waterfall Tier
Waterfall Tier is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.
Waterfall True-Up
Waterfall True-Up is a structure used by distribution and carry economics to manage waterfall economics with clearer timing, ownership, and follow-through.