AI1 – Sponsor Split with No Capital Invested

  • Anonymous
    Inactive
    4 years, 2 months ago #2772

    Thank you for creating such an awesome resource! My question is in the case that the sponsor contributes no capital to the deal and there is a 70/30 split, how do I need to adjust the model to take this into account? I have seen the question asked in prior years, but not sure if the model has been updated to address this.

    Spencer Burton
    Keymaster
    4 years, 2 months ago #3316

    Hi drdc1135,

    Thanks for the comment! Unfortunately, out-of-the-box, this is not yet supported; although it should be! I’ll add this to my feature request list and include it in the next version of the model.

    Now if you’re looking for a workaround. Go to the Equity CF tab and set the Sponsor equity contribution percentage (cell C11) to 0.0001%. This will trick the model into keeping the Equity CF module on, while limiting the Sponsor’s contribution to essentially 0. From there, you can set the Sponsor Promote to 30% (cells F18:F20) based on the hurdles you set in cells D18:D20.

    Best of luck!

    Spencer

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