Waterfall Distribution Calculator

About this calculator

A distribution waterfall is the tiered order in which proceeds from a private-equity fund, real-estate syndication, or startup exit get paid out to different parties, structured so each ‘bucket’ must be fully satisfied before money flows to the next tier. A typical waterfall runs: (1) return of capital — limited partners (LPs) get their original invested capital back first; (2) the preferred return (hurdle rate) — LPs receive a minimum annual return, commonly 6-8%, before the general partner (GP) earns anything; (3) a GP catch-up tier that lets the manager catch up toward its target profit share; and (4) carried interest — the GP's share (often 20%) of remaining profits, split with LPs at an agreed ratio.

Private-equity fund managers, real-estate syndicators, and startup founders/investors negotiating exit terms use waterfall modeling to structure and communicate exactly how proceeds from a sale or fund liquidation will be split, since the order and thresholds materially change what each investor class actually receives — a deal can look attractive on headline terms but distribute very differently once the hurdle and carry tiers are modeled out.

This calculator takes total invested capital, exit proceeds, the preferred return rate, and the GP's carry percentage, and walks the proceeds through each tier of the waterfall so you can see exactly how much each party receives.