Get to grips with distribution waterfalls

In the private markets, liquidity events define success. But calculating how to distribute proceeds among equity holders is a complicated financial exercise. 

From standard LLCs to intricate private equity structures, understanding the “pecking order” of a company’s cap table is essential for accurate forecasting.

Waterfall modeling: A guide to distribution structures

This practical guide is designed to help deal teams, CFOs, and legal advisors ensure that exit analyses align with deal terms. It contains:

  • Seven waterfall models in action, visualizing how capital flows from one unitholder class to the next.

  • A breakdown of participation mechanics and how they impact investor returns.

  • Advanced vesting scenarios, including adjusted pro rata distributions and vesting based on MOIC.

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