Glossary
American waterfall (deal-by-deal)
A distribution waterfall in which carried interest is calculated and paid deal by deal as each investment is realised, rather than only after all contributed capital across the fund is returned.
In practice
It gets the GP paid earlier but can overpay carry if later deals lose money, so American waterfalls rely on clawback provisions and carry escrow to protect LPs.
In FUN/D
FUN/D runs deal-by-deal waterfalls with interim clawback tests and escrow tracking.
Related: European waterfall · Clawback · Carry escrow · full glossary
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