A Distribution Plan in InvestNext allows you to define a custom waterfall for each project. When you are ready to distribute funds to investors, whether it be a quarterly preferred return payment or a profit share after exiting a project, a Distribution Plan will programmatically allocate the funds to your investors, removing any manual calculation or Excel work from the process.
IMPORTANT:
Before running your distribution plan, confirm that you have completed the items below to ensure the system has all the information required to calculate the distributions:
ITEM 1: Set the Ownership Percentages for each Class in the Project: Setting Class Ownership Percentages
ITEM 2: Verify that each Class has a Class Unit Price. Use this article: Update Class Unit Price (Project)
Step-by-Step Instructions:
Step 1. Navigate to the relevant Project and click on the Distributions tab.
Step 2. Click on the Distribution Plans button.
Step 3. Click New Distribution Plan, add an identifying name and click Create Plan.
Step 4. Select a Remainder Allocation Method.
NOTE: This will determine how the system will handle the allocation of an uneven amount of change. For example, if there are 7 cents remaining to allocate between 15 investors.
Step 5. Select Add Hurdle, add a Title, select the Hurdle Type, and click Create Hurdle.
NOTE: To learn more about a waterfall hurdle types, please review the options in this document: Distribution Plan: Waterfall Hurdles Explained
Step 6: Click the three vertical dots beside the hurdle name and select Edit to customize the hurdle details.
Step 7: Repeat Steps 5 & 6 as necessary.
If your project has multiple types of distributions, you can create additional Distribution Plans using the same process. You will be able to choose the correct option when creating a distribution.
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