An 8% preferred return is common in some private equity contexts, but it is **not standard everywhere in venture**.
Why Cornerstone may omit it:
- Many venture funds, especially emerging-manager funds, use a **European waterfall without a pref**
- LP protection still exists because in a European waterfall, **all contributed capital is returned first** before carry is paid
- Hurdles can add complexity and may misfit venture’s **long duration, irregular cash flows, and back-ended outcomes**
So “return capital, then split” is a valid venture structure, not an error.
If an LP expects a hurdle, that is usually a **negotiation point**, not a universal market term.
References:
- https://decilehub.com/base/1-general_questions/163729-why-does-the-lpa-have-different-options-for-how-carried-interest-is-distributed
- https://decilehub.com/base/1-general_questions/90454-does-start-fund-use-american-or-european-waterfall
Why Cornerstone may omit it:
- Many venture funds, especially emerging-manager funds, use a **European waterfall without a pref**
- LP protection still exists because in a European waterfall, **all contributed capital is returned first** before carry is paid
- Hurdles can add complexity and may misfit venture’s **long duration, irregular cash flows, and back-ended outcomes**
So “return capital, then split” is a valid venture structure, not an error.
If an LP expects a hurdle, that is usually a **negotiation point**, not a universal market term.
References:
- https://decilehub.com/base/1-general_questions/163729-why-does-the-lpa-have-different-options-for-how-carried-interest-is-distributed
- https://decilehub.com/base/1-general_questions/90454-does-start-fund-use-american-or-european-waterfall