Waterfall modeling: A guide to distribution structures

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.

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.