clawback

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School

University of Texas *

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387

Subject

Finance

Date

Apr 3, 2024

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xlsx

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15

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UT Fall 2022 Clawback Example Answer Assumptions: Fund Size $ 2,000,000,000 Investments 16 Size of each investment $ 125,000,000 Carried interest 20% Management fee 2% Hurdle rate 0% Distributions From inception Initial liquidated investments 7 Exit value of each initial exit $ 600,000,000 Liquidation value of initial exits $ 4,200,000,000 Distributible proceeds $ 4,200,000,000 Invested capital in initial exits 875,000,000 Distributable proceeds $ 3,325,000,000 Distributions GPs $ 665,000,000 LPs $ 2,660,000,000 Assumptions: Fund Size $ 2,000,000,000 Investments 16 Size of each investment $ 125,000,000 Carried interest 20% Management fee 2% Hurdle rate 0% Distributions From inception Initial liquidated investments 7 Exit value of each initial exit $ 600,000,000 Liquidation value of initial exits $ 4,200,000,000 Additional liquidated investments 9 Exit value of each additional exit $ 80,000,000
Liquidation value of additional exits $ 720,000,000 Invested capital in additional exits 1,125,000,000 Distributable proceeds -$ 405,000,000 Distributions GPs -$ 81,000,000 LPs -$ 324,000,000 Clawback -$ 81,000,000 Total liquidation value of exits Initial exits $ 4,200,000,000 Additional exits 720,000,000 Total $ 4,920,000,000 Invested capital $ 2,000,000,000 Net distributable proceeds $ 2,920,000,000 Total Distributions Including the Initial Capital Invested GPs $ 584,000,000 LPs $ 2,336,000,000
Question Assumptions: Fund Size Investments Size of each investment Carried interest Management fee Hurdle rate Distributions Initial liquidated investments Exit value of each initial exit Liquidation value of initial exits Distributible proceeds Invested capital in initial exits Distributable proceeds Distributions GPs LPs Assumptions: Fund Size Investments Size of each investment Carried interest Management fee Hurdle rate Distributions Initial liquidated investments Exit value of each initial exit Liquidation value of initial exits Additional liquidated investments Exit value of each additional exit
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Liquidation value of additional exits Invested capital in additional exits Distributable proceeds Distributions GPs LPs Clawback Total liquidation value of exits Initial exits Additional exits Total Invested capital Net distributable proceeds Total Distributions Including the Initia GPs LPs
$ 2,000,000,000 16 $ 125,000,000 20% 2% 0% From inception 7 $ 600,000,000 $ 2,000,000,000 16 $ 125,000,000 20% 2% 0% From inception 7 $ 600,000,000 9 $ 80,000,000
al Capital Invested
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UT Fall 2023 Cap and Payout Tables Answer Assumptions Series A Invesment $ 10,000,000 Post-money valuation $ 50,000,000 VC1 Ownership post A round 20% Founder investment $ 2,000,000 Management investment $ - Table 1 Cap Table Pre-Investment Ownership Shareholder Shares Percentage Founder 2,000,000 83% Management 400,000 17% Total 2,400,000 100% Table 2 Cap Table Post-Common Investment Ownership Shareholder Shares Percentage VC1 600,000 20% Founder 2,000,000 67% Management 400,000 13%
Total 3,000,000 100% Table 3 Payout Table - All Common Stock $20 million acquisition proceeds Ownership Total Shareholder Shares Percentage Payout VC1 600,000 20% $ 4,000,000 Founder 2,000,000 67% $ 13,400,000 Management 400,000 13% $ 2,600,000 Total 3,000,000 100% $ 20,000,000 Table 5 Payout Table - Convertible Preferred Stock $20 million and $60 million acquisition proceeds $20 million acquisition proceeds Ownership Shareholder Security Shares Percentage VC1 Preferred 600,000 20% Founder Common 2,000,000 67% Management Common 400,000 13% Total 3,000,000 100% $60 million acquisition proceeds $ 40,000,000 Ownership Shareholder Security Shares Percentage VC1 Preferred 600,000 20% Founder Common 2,000,000 67%
Management Common 400,000 13% Total 3,000,000 100%
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Question Assumptions Series A Invesment Post-money valuation VC1 Ownership post A round Founder investment Management investment Table 1 Cap Table Pre-Investment Shareholder Shares Founder 2,000,000 Management 400,000 Total 2,400,000 Table 2 Cap Table Post-Common In Shareholder Shares VC1 Founder Management
Total Table 3 Payout Table - A $20 million acqui Net Payout Shareholder Shares $ (6,000,000) VC1 $ 11,400,000 Founder $ 2,600,000 Management $ 8,000,000 Total Table 5 Payout Table - C $20 million and $ $20 million acquisition proceeds Total Net Payout Payout Shareholder Security $ 10,000,000 $ - VC1 $ 8,333,333 $ 6,333,333 Founder $ 1,666,667 $ 1,666,667 Management $ 20,000,000 $ 8,000,000 Total $60 million acquisition proceeds Total Net $ 40,000,000 Payout Payout Shareholder Security $ 12,000,000 $ 2,000,000 VC1 $ 40,200,000 $ 38,200,000 Founder
$ 7,800,000 $ 7,800,000 Management $ 60,000,000 $ 48,000,000 Total
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$ 10,000,000 $ 50,000,000 20% $ 2,000,000 $ - Ownership Percentage 83% 17% 100% nvestment Ownership Percentage
All Common Stock isition proceeds Ownership Total Net Percentage Payout Payout Convertible Preferred Stock $60 million acquisition proceeds Ownership Total Net Shares Percentage Payout Payout Ownership Total Net Shares Percentage Payout Payout
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