[Verse 1] General Partners scout the deals while Limited Partners bring the cash Management fees of two percent keep the lights on, year by year Twenty percent carried interest when the profits finally flash But first the hurdle rate must clear, then waterfall appears [Chorus] Pre-money, post-money, calculate the slice Comparables and DCF, we're rolling the dice J-curve dips before it climbs, patience is the key Exit through IPO or sale, that's private equity [Verse 2] Venture capital seeks the spark in early-stage innovation While buyout funds acquire mature companies with leverage high Pre-money valuation sets the baseline expectation Post-money adds the cash injection, ownership multiplied [Chorus] Pre-money, post-money, calculate the slice Comparables and DCF, we're rolling the dice J-curve dips before it climbs, patience is the key Exit through IPO or sale, that's private equity [Bridge] Market multiples reveal what similar firms are worth Discounted cash flows forecast future value birth Secondary sales to other funds, recapitalization too Sometimes write-offs mark the end when ventures can't break through [Verse 3] The J-curve shows initial loss as fees consume the fund Before investments mature and generate returns Five to seven years on average until the gains compound Patient capital waits while portfolio slowly churns [Chorus] Pre-money, post-money, calculate the slice Comparables and DCF, we're rolling the dice J-curve dips before it climbs, patience is the key Exit through IPO or sale, that's private equity [Outro] GP and LP aligned when carried interest pays Valuation methods guide us through the investment maze
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