[Verse 1]
General Partners lead the fund while Limited Partners pay
GPs make the investment calls day by day
Management fees of two percent keep the lights on bright
While twenty percent carried interest rewards when deals go right
The fund structure's clear and simple once you know the way
GPs invest the expertise, LPs provide the pay
[Chorus]
Pre-money valuation before the cash flows in
Post-money after funding, that's where returns begin
Comparables and DCF help set the price today
J-curve dips then rises in the private equity way
Exit through IPO, secondary sale so clean
Recapitalization or write-off completes the scene
[Verse 2]
Before the money hits the table, pre-money sets the stage
Company's worth without new funding, written on the page
After investment dollars land, post-money tells the tale
Total value of the company when funding doesn't fail
Ownership percentage calculated from this simple math
Pre-money plus investment equals post-money path
[Chorus]
Pre-money valuation before the cash flows in
Post-money after funding, that's where returns begin
Comparables and DCF help set the price today
J-curve dips then rises in the private equity way
Exit through IPO, secondary sale so clean
Recapitalization or write-off completes the scene
[Bridge]
J-curve shows the pattern that every fund will face
Early years bring losses before gains take their place
Management fees and deal costs pull returns down low
But successful exits later help the profits grow
[Verse 3]
Comparable company method looks at market peers
Public trading multiples guide the pricing gears
Discounted cash flow projects future money streams
Present value calculations fulfill the exit dreams
Multiple ways to value but the goal remains the same
Price it right today to win tomorrow's game
[Chorus]
Pre-money valuation before the cash flows in
Post-money after funding, that's where returns begin
Comparables and DCF help set the price today
J-curve dips then rises in the private equity way
Exit through IPO, secondary sale so clean
Recapitalization or write-off completes the scene
[Outro]
From GP to LP, from entry to exit door
Private equity valuation, now you know the score