Waterfall Pref Question
Does anyone have a model or know how to calculate a multiple-hurdle waterfall where GP and LP invest capital at different stages of the deal? (Basically, GP and LP are not putting in $ at the same time so therefore the pref on each starts at different times) Thanks!!
IIRC, adventuresincre.com made a waterfall equity model with multiple hurdles. it's on youtube somewhere
The waterfall should be tied to cash flow, which should be further delineated for GP and LP. Simply make your "balance of accrued pref" and "balance of current pref" tied to the cash flow. So the waterfall will apply the pref return% to 0 until the month of negative cashflow hits for the GP or LP.
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