waterfalls
How should sponsors model a distribution waterfall before close?
They should model multiple exit values, timing cases, fee treatments, reserves, tax distributions, preferred return accrual, and sponsor promote.
Pre-close waterfall modeling should test whether the economics still make sense after realistic timing and expense assumptions. In SponsorBeast, treat this as an operating workflow for sponsors modeling investor distributions, preferred returns, catch-ups, and promote, not as a loose finance concept. Start by naming the decision owner, the inputs required, the document that records the answer, and the next review date. Then connect the work to deal modeling, document drafting, distribution approval, exit planning, and post-distribution reconciliation so investors, counsel, lenders, administrators, and portfolio operators can see what is complete, what is blocked, and what must happen before capital moves or a decision becomes final. Build scenarios that show investor MOIC, IRR, sponsor carry, unpaid preference, clawback exposure, and sensitivity to exit date and leverage.