Full (100%) catch-up
Last updated
Quick Answer
A full, or 100%, catch-up allocates every distribution to the general partner during the catch-up tier until the agreed profit split is reached.1,2
What it is
The alternative is a partial catch-up, which splits distributions during the tier and therefore takes longer to reconcile — and in a fund that stops distributing partway may never reconcile at all. Which construction applies is a drafting choice, and it changes the general partner's economics in exactly the funds that underperform.1,2
Operational context
What good looks like
Why It Matters
Full versus partial catch-up changes the general partner's economics precisely in the funds that underperform, which is the scenario the drafting is least often stress-tested against.1
Term Family
Related concepts
Frequently Asked Questions
What is Full (100%) catch-up in venture capital?
The alternative is a partial catch-up, which splits distributions during the tier and therefore takes longer to reconcile — and in a fund that stops distributing partway may never reconcile at all.
Why is Full (100%) catch-up important for startups?
Understanding Full (100%) catch-up is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Sources & References
- 1.duanemorris-clawbacks — Private Equity Funds: Clawbacks and Investor GivebacksPrivate Equity Funds: Clawbacks and Investor GivebacksDuane Morris LLP(A full, or 100%, catch-up allocates every distribution to the general partner during the catch-up tier until the agreed profit split is reached.)secondary · T2 · waterfall-models · term
- 2.metrick-yasuda — Metrick & Yasuda, *The Economics of Private Equity Funds* (Rev. Fin. Stud. 2010)Metrick & Yasuda, *The Economics of Private Equity Funds* (Rev. Fin. Stud. 2010)Wharton / Rodney White Center(A full, or 100%, catch-up allocates every distribution to the general partner during the catch-up tier until the agreed profit split is reached.)secondary · T2 · waterfall-models · term
- 3.cooley-carry-primer — Primer: Carried Interest in Private Equity and Venture Capital Funds (*TheFundLawyer*)Primer: Carried Interest in Private Equity and Venture Capital Funds (*TheFundLawyer*)Cooley LLP(A full, or 100%, catch-up allocates every distribution to the general partner during the catch-up tier until the agreed profit split is reached.)secondary · T2 · waterfall-models · term
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