- **Deal-by-Deal distribution**: carry is calculated and potentially paid based on the performance of an individual exit or investment.
- **Whole-of-Fund distribution**: carry is paid only after the fund as a whole has returned capital and met the waterfall terms in the LPA.
Practical difference:
- **Deal-by-deal** can create earlier apparent payouts, but is much harder to administer.
- A single winning deal may still pay **nothing** if the broader fund has not reached carry under the waterfall.
- **Whole-of-fund** is cleaner, aligns incentives across the entire portfolio, and is generally more manager-friendly operationally.
Decile generally does **not** recommend deal-by-deal carry.
Reference: https://decilehub.com/base/1-general_questions/430-what-are-the-mechanics-of-per-deal-carry-for-venture-partners-when-the-fund-hasn-t-generated-enough-returns
- **Whole-of-Fund distribution**: carry is paid only after the fund as a whole has returned capital and met the waterfall terms in the LPA.
Practical difference:
- **Deal-by-deal** can create earlier apparent payouts, but is much harder to administer.
- A single winning deal may still pay **nothing** if the broader fund has not reached carry under the waterfall.
- **Whole-of-fund** is cleaner, aligns incentives across the entire portfolio, and is generally more manager-friendly operationally.
Decile generally does **not** recommend deal-by-deal carry.
Reference: https://decilehub.com/base/1-general_questions/430-what-are-the-mechanics-of-per-deal-carry-for-venture-partners-when-the-fund-hasn-t-generated-enough-returns