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Asset Management, Financial Model, Financial Services, General Excel Financial Models

Dashboard, Excel, Private Equity, Private Equity Waterfall Distribution Models, Scenario Analysis, Valuation, VC Valuation

This Excel model takes a venture portfolio and a set of fund terms and produces the numbers LPs and GPs actually argue about: what the portfolio returned gross, what the LPs received net, what the GP earned, and how much of the gap is the hurdle, the catch-up and the fee load.

The four tiers, and the kink nobody explains

A European waterfall pays in order: contributed capital back to the LPs — including management fees — then the preferred return, then the GP catch-up, then the split. The catch-up is the tier that surprises people: it exists so that once the LPs have their preferred return, the GP is brought up to its full carry percentage of everything above the return of capital, as though the hurdle had never applied. This model computes the exact catch-up amount, and an integrity check confirms the GP never ends up past its headline percentage of fund profit.

The consequence is a kink. Below the hurdle the GP earns nothing however hard it worked; just above it, the GP’s share of the next dollar is far higher than the headline carry. The Sensitivity tab makes that visible across eight portfolio outcomes.

European against American, and the clawback

Deal-by-deal American carry is taken on each profitable exit as it happens, ignoring the losers. Over a fund’s life that can only ever favour the GP. The difference between the two waterfalls is the clawback — money already received and owed back. In the worked example, a $120m fund returning 3.4x gross produces a clawback of roughly $6.6m.

What is inside

Portfolio — twenty-five investments with entry and exit years, proceeds, gross MOIC and profit.
Fund Cash Flows — twelve years of investments, fees, calls and distributions, ending in the LP net cash flow the IRR is computed on.
Waterfall — four European tiers, the catch-up arithmetic, and the American comparison with its clawback.
Returns — gross MOIC, fund MOIC, LP net MOIC, DPI, net IRR, carry paid and the fee-and-carry drag as a multiple.
Sensitivity — eight portfolio outcomes from 0.25x to 4x, each run through the whole waterfall.
Thirteen integrity checks, all of which must read PASS — including one confirming that contributions fit inside the committed capital.

No macros, no add-ins, no external links, no password protection and no locked cells. A five-page PDF guide — free to download here — documents every convention and every limitation.

This workbook models the arithmetic of fund terms. It is not investment advice, and the sample portfolio is invented.

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