Business Pitch Dictionary by pitch.dog
Exits, liquidity & investor returns · Working

Distribution waterfall

Also called: fund waterfall

ELI5

The rules for who receives sale proceeds and when.

Used in conversation

“The distribution waterfall includes return of capital, hurdle and carry.”

Definition

The contractual order and formula for distributing investment proceeds.

Here “Distribution waterfall” means: The contractual order and formula for distributing investment proceeds.

Pitch context

You will see “Distribution waterfall” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches exits, liquidity & investor returns.

Why it matters: In exits, liquidity & investor returns, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Connected terms

  • WaterfallThe search label “Distribution waterfall” can route to both entries.
Sources & evidence · 6

Direct term-level sources and supporting source families.