- **Deal-by-Deal / American**:
- Carry can be distributed after a specific investment exits profitably
- **GP gets paid earlier**
- But if later deals underperform, earlier carry may need **clawback**
- More complex to administer and often more LP-sensitive

- **Whole-of-Fund / European**:
- LPs first get back contributed capital across the **entire fund** and satisfy the waterfall terms
- **GP gets carry later**
- Simpler, more LP-friendly, and better aligned across the full portfolio

- **Practical takeaway**:
- Tradeoff is **earlier GP cash flow vs. simpler, safer fund-wide alignment**
- Decile generally favors **Whole-of-Fund** for emerging managers

References:
- https://decilehub.com/base/1-general_questions/163749-what-s-the-practical-difference-between-deal-by-deal-and-whole-of-fund-distribution
- https://decilehub.com/base/1-general_questions/163985-what-are-the-practical-differences-between-the-american-and-european-waterfall-structures-for-lp-distributions