Waterfall Exit Distribution Calculator

Exit waterfall drives GP/LP outcomes.

Net distributable

Total equity invested

Preferred return %

Promote % above pref

Hold years

GP distribution (promote)

$449,075

LP distribution

$13,550,925

Preferred accrued

$3,754,625

How the math works

Accrued pref = equity × ((1+pref)^years − 1). Capital return first, then pref, then remaining × promote to GP.

$8M × (1.08^5 − 1) = $3.76M pref accrued. Remainder $2.24M × 20% promote = $448k GP. LP $13.55M.

How to Use

Enter net distributable.
Enter total equity invested.
Enter preferred return %.
Enter promote % above pref.
Enter hold years.
Read GP and LP distributions.

Frequently Asked Questions

Standard waterfall?

1) Return of equity (100% LP until invested capital returned). 2) Preferred return (6-10% IRR hurdle, 100% LP). 3) Catch-up (50-100% GP until GP has equal to pref). 4) Promote (70/30, 80/20 LP/GP typical). Modern deals often layered with multiple tiers.

Typical IRR returns to LP?

Without promote: gross IRR. With 8% pref + 20% promote over pref: LP IRR ~70-85% of gross IRR once promote kicks in. On 18% gross IRR: LP 15%, GP promote ~3%. Structure matters — read OP thoroughly.

Clawback?

If earlier distributions exceeded final target (e.g., interim returned more promote than final warrants), GP pays back. Clawback provision common in multi-asset funds. Single-asset LLCs typically don't have since final distribution is the only one.