Clawback measurement dates
Last updated
Quick Answer
Clawback measurement dates are the points at which the general partner's cumulative entitlement is tested against what it has actually received.1,2
What it is
Most agreements test at the end of the fund's life, and stronger agreements also test at interim dates. The measurement date determines when an overpayment becomes visible, and an obligation that is only ever tested at wind-up can go unnoticed for years while the entity that owes it distributes its assets.1,2
Operational context
What good looks like
Why It Matters
An obligation tested only at wind-up can sit undiscovered for years while the entity that owes it distributes its assets, so the testing date is what decides whether a clawback is collectable.1
Term Family
Related concepts
Frequently Asked Questions
What is Clawback measurement dates in venture capital?
Most agreements test at the end of the fund's life, and stronger agreements also test at interim dates. The measurement date determines when an overpayment becomes visible, and an obligation that is only ever tested at wind-up can go unnoticed for years while the entity that owes it distributes its...
Why is Clawback measurement dates important for startups?
Understanding Clawback measurement dates is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Sources & References
- 1.ilpa-model-lpa-wof-ts — ILPA Model LPA Term Sheet — Whole-of-Fund Waterfall Version (July 2020)ILPA Model LPA Term Sheet — Whole-of-Fund Waterfall Version (July 2020)ILPA(Clawback measurement dates are the points at which the general partner's cumulative entitlement is tested against what it has actually received.)primary · T1 · vesting-clawback · term
- 2.ilpa-principles-3 — ILPA Private Equity Principles 3.0 (2019)ILPA Private Equity Principles 3.0 (2019)ILPA(Clawback measurement dates are the points at which the general partner's cumulative entitlement is tested against what it has actually received.)primary · T1 · vesting-clawback · term
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