Venture Capital

This is waterfall modeling for venture capital, part of fund administration in Carta's ERP for private capital. Manual exit modeling on disconnected spreadsheets risks over distribution and future clawbacks due to stale cap table data. Carta solves this by anchoring your exit models to the live cap table. We access waterfall modeling under the Valuation tab to bridge entity ownership with exit logic.

We configure the scenario, setting the waterfall date and a hypothetical equity value of thirty million dollars. Beyond a single outcome, you can use waterfall modeling to stress test various scenarios, ensuring you understand your position across a variety of market conditions. The Advanced Settings option provides more granular controls. Here, you can account for complex management carve outs or other scenarios that standard calculators often miss.

When we click Run Waterfall, the system runs the distribution rules against the real time ledger. Navigating to breakpoints, we can visualize exactly where the preferred return hurdles clear. This view is critical for explaining distribution logic to skeptical LPs during a roadshow, proving the math matches the LPA. Finally, click export for a spreadsheet you can easily share.

Only Cartas Connected ERP links your exit scenarios directly to your cap table, eliminating the need for manual reconciliation.