The numbers · Waterfall visualizer · Wealth
Watch the money actually move.
Equity, pref, split, profit — the waterfall pays in strict order. See what LPs collect, what the sponsor earns, and whether the alignment is real.
Inputs
LP equity$2.7M
Sponsor co-invest$300k
Preferred return8.0%
LP share above pref70/30
Total deal profit$2M
Hold period5 years
Simple (non-compounding) preferred return with a single-hurdle split; the GP's co-invested equity earns LP-side economics on its share. Real deals add catch-ups, IRR hurdles and fees — read the actual documents.
The waterfall — profit flowing in order
Total profit
$2M
Tier 1: 8% pref
$1.2M
Tier 2: LP 70% of split
$560k
Sponsor promote
$240k
LPs receive
$1.58M
Sponsor receives
$416k
LP total profit
$1.58M
1.59x multiple · ~11.7%/yr simple
Sponsor promote
$240k
Earned only above the pref — pay for outperformance
Sponsor co-invest
10%
10%+ is real alignment; 1% is marketing
The verdict
LPs collect $1.58M of the $2M profit (a 1.59x equity multiple, ~11.7%/yr simple); the sponsor's $416k combines the promote with their co-invested share. With 10% sponsor co-invest, alignment is real.