Free calculator
Who gets what when the deal sells?
Enter a deal’s terms and its sale price. See how the money is shared between investors and the sponsor, step by step.
The order the sale money is paid
1Investors get their money back
2Then the preferred return
3Then the rest is split
Investors are paid first. The sponsor’s share comes last.
The deal’s terms
The equity raised from investors.
Simple, not compounded. Use 0 if there is none.
For example 5, or 3.5.
Optional. Leave blank if none.
The sale price less the loan payoff and selling costs.
Example numbers only show how it works. They are not a forecast.
Questions
What is a preferred return?
A yearly percentage investors are paid on the money they put in before the sponsor shares in the profit. It is not a promise. If the deal does not make enough, it is not paid in full. Here it is simple, not compounded: the percentage times the money times the years.
Why do investors get their money back first?
Because that is how most deals are written: sale money goes to investors’ capital first, then the preferred return, and only then is what is left shared. Your operating agreement sets the exact order, so read it.
What is “the split”?
What is left after investors have their capital and preferred return is shared by a percentage. A common one is 70% to investors and 30% to the sponsor, or 80% and 20%. Your deal’s terms may differ.
Why does cash paid during the deal matter?
Cash paid to investors while the deal runs usually counts toward their preferred return. So the more that was paid along the way, the less preferred return is still owed at the sale.
What does “money from the sale” mean?
The cash that reaches the equity: the sale price, less the loan payoff and the costs of selling (broker, legal, closing). It is not the sale price.
Is this a forecast?
No. It does the math on the numbers you type and nothing else. It does not say what any deal will earn, and it leaves out fees, taxes and other terms in your agreement.
How does DoorRaise use this?
DoorRaise builds the operating agreement and the investor reports from the terms you set for your deal, so investors can see this same order, step by step.
This only does the math on the numbers you type. It is not a forecast, an offer, or legal, tax or investment advice, and it does not say how any deal will turn out. Real terms are in the operating agreement. Investing involves risk, including loss of your entire investment. DoorRaise is not a law firm.
Set your terms once
Build your free sponsor page in a few minutes. DoorRaise writes your deal’s documents from the terms you pick.