Distribution waterfall
A distribution waterfall sets the order and conditions for distributing proceeds among investors and the sponsor. The sequence is defined by the governing documents.
Why it matters to a capital raiser
I walk through the order with clear examples so participants can understand how proceeds flow.
Related terms
- Hurdle
- Catch-up
A term can mean something different in a particular deal, so read it with the governing documents. General education only. Not legal, tax or investment advice.