Talltree Ventures has raised their $250M fund, Talltree Ventures IV, with terms as given in the Appendix B page 43

of the textbook. Construct an example of fund performance where the claw back provision would be triggered. In this example, compute the carried interest paid in each year, and show the total amount that must be paid back by the GPs upon the liquidation of the fund.

The words are more than legible. These are the only pics I have can you please give it another go?

committed capital 2 gross returns carry 1 management fee 5 priority return 7 Year 9 investments 10 portfolio value 11 total returned capital 12 carried interest 13 returned capital to LPs 14 Cumulative returned capital to LPs 15 port value after capital returned 16 management fee 17 cash flows to GP 18 cash flows to LPs 19 contributed capital 20 running NPV with hurdle, not counting this periods returned capital 21 catch up amount 23 Clawback 27 Type here to search APERS TERMS AND FOR THE VOUS 43 the profile investit o AVC considering i s Moth e Un capul the fund would receive a p conto del arty with his dis solve the all in A nd if this i s example of and where the clock APPENDICES: KEY TERMS AND CONDITIONS FOR THREE VC FUNDS These appendices give excerpts from the private placement memoranda for three fictical Ve funds Early Bird Ventures EBV Appendix AL Tone Ventures IV Appendix 2 Bland Cul Ventures IX Appendix 201 We will refer the dices throughout the book. All these excerpts are derived from more complete memorandum viven in Kaplan (1999). Appendix 2.A: Early Bird Ventures! Fund Size $10 million spillerine December ist unless extended for up to me year res the discretion of the general partner. This is cutive it orderly Commitment Perled Following the fun an y of the initial clasi Management Fees Them e s will per p in t uali Distributions Divino even there will they have is the time 10 to the general partners peront the limited partners and Diversification and Investment Limits The Fund muy invest inom ponent of create commitments in any ile p olo con Appendix 2.B: Talltree Ventures IV Fund Size S250 million Term Following the tenth anniversary of the initial closing the lem of the partnership will expire on December 31st, unless it is extended for up to cutive -year periods at the discretion of the general partner. This is to perminderly dissolution and management fees will be charged during any such extension Commitment Period Following the Gifth anniversary of the initial closing all partners will be released from any further obligation with respect to their unfunded commitments on December 31st except to the extent necessary to cover expenses and obligations of the partnership (including management fees) in an aggregate amount not to exceed unfunded commitments, Management Fees The annual contributions will equal 2 percent of com mitted capital for the first 10 years of the fund. These contributions will be paid quarterly Distributions Distributions in respect of any partnership investment will made in the following order of priority: (1) 100 percent to the limited partners until they have received an amount equal to their contributed capital, plus a priority retum equal to 8 percent (compounded il 100 percent to the general partner until the general partner has received catch- u distributions equal to 20 percent of the sum of such distributions and the preference distributions in part fi). ( 80 percent to the limited partners and 20 percent to the general partner General Partner Clawback Obligation Upon liguidation of the ful the neral partner will be required to restore funds to the partnership to the extent that solved curative distributions in eness of mixints otherwise distributable APPENDICES KEY TERMS AND CONDITIONS FOR THREX VC FORD 45 pursuant to the distribution formula set forth above applied on an aggregate basis covering all partnership investments, but in no event more than the cumulative de tributions received by the general partner solely in respect of its curred interest Diversification and Investment Limits The fund may not invest more than 20 percent of aggregate commitments in any single portfolio company committed capital 2 gross returns carry 1 management fee 5 priority return 7 Year 9 investments 10 portfolio value 11 total returned capital 12 carried interest 13 returned capital to LPs 14 Cumulative returned capital to LPs 15 port value after capital returned 16 management fee 17 cash flows to GP 18 cash flows to LPs 19 contributed capital 20 running NPV with hurdle, not counting this periods returned capital 21 catch up amount 23 Clawback 27 Type here to search APERS TERMS AND FOR THE VOUS 43 the profile investit o AVC considering i s Moth e Un capul the fund would receive a p conto del arty with his dis solve the all in A nd if this i s example of and where the clock APPENDICES: KEY TERMS AND CONDITIONS FOR THREE VC FUNDS These appendices give excerpts from the private placement memoranda for three fictical Ve funds Early Bird Ventures EBV Appendix AL Tone Ventures IV Appendix 2 Bland Cul Ventures IX Appendix 201 We will refer the dices throughout the book. All these excerpts are derived from more complete memorandum viven in Kaplan (1999). Appendix 2.A: Early Bird Ventures! Fund Size $10 million spillerine December ist unless extended for up to me year res the discretion of the general partner. This is cutive it orderly Commitment Perled Following the fun an y of the initial clasi Management Fees Them e s will per p in t uali Distributions Divino even there will they have is the time 10 to the general partners peront the limited partners and Diversification and Investment Limits The Fund muy invest inom ponent of create commitments in any ile p olo con Appendix 2.B: Talltree Ventures IV Fund Size S250 million Term Following the tenth anniversary of the initial closing the lem of the partnership will expire on December 31st, unless it is extended for up to cutive -year periods at the discretion of the general partner. This is to perminderly dissolution and management fees will be charged during any such extension Commitment Period Following the Gifth anniversary of the initial closing all partners will be released from any further obligation with respect to their unfunded commitments on December 31st except to the extent necessary to cover expenses and obligations of the partnership (including management fees) in an aggregate amount not to exceed unfunded commitments, Management Fees The annual contributions will equal 2 percent of com mitted capital for the first 10 years of the fund. These contributions will be paid quarterly Distributions Distributions in respect of any partnership investment will made in the following order of priority: (1) 100 percent to the limited partners until they have received an amount equal to their contributed capital, plus a priority retum equal to 8 percent (compounded il 100 percent to the general partner until the general partner has received catch- u distributions equal to 20 percent of the sum of such distributions and the preference distributions in part fi). ( 80 percent to the limited partners and 20 percent to the general partner General Partner Clawback Obligation Upon liguidation of the ful the neral partner will be required to restore funds to the partnership to the extent that solved curative distributions in eness of mixints otherwise distributable APPENDICES KEY TERMS AND CONDITIONS FOR THREX VC FORD 45 pursuant to the distribution formula set forth above applied on an aggregate basis covering all partnership investments, but in no event more than the cumulative de tributions received by the general partner solely in respect of its curred interest Diversification and Investment Limits The fund may not invest more than 20 percent of aggregate commitments in any single portfolio company