The Private Equity J-Curve, Modeled for One Household
The cash J-curve is arithmetic. In an illustrative model, one fund goes about 79 percent underwater by year 4. Pacing shrinks the hole.
Private markets for people who sign their own subscription docs.
Angel, venture, private equity, credit, real assets and small-business deals, compared on what each asks of you: cash, time, paperwork, and how long your money is locked up.
The allocation ledger
Portfolio practice
Capital calls, liquidity ladders, K-1s, quarterly reviews, investment policy and life commitments.
What cash and paperwork will the portfolio ask of you?
- The Private Equity J-Curve, Modeled for One Household
- Private Market Returns: Read the Spread, Not the Average
- Accredited Investor Options: Could Your Money Be Locked Up?
- Write Down What the Money Is For Before You Sign Anything
- The Family Office Average Isn't Your Family.
- If You Can't Find the Document, You Don't Know the Number
- Your Business, Your Job and Your Fund May Be the Same Bet
- Capital Calls Don't Wait: Build a Liquidity Budget
- A Good Quarterly Letter Is Not a Distribution
Terms your subscription docs use
- Accredited Investor
An accredited investor meets a legal eligibility category for certain private offerings; that status tells you nothing about what fits your portfolio.
- Angel Investing
Angel investing means investing personal capital directly in startups, with responsibility for company selection and exposure to loss and uncertain exits.
- Concentration Risk
Concentration risk arises when employment, property and private holdings depend on a shared business, industry or geography that can face a common setback.
- Distribution
A cash distribution is money paid from an investment to its investor, distinct from reported asset value or cash retained within an operating business.
- Due Diligence
Due diligence investigates an investment case, its weaknesses and remaining questions so you understand the decision; it never removes the risk.
- Fund of Funds
A fund of funds invests in other funds, delegating underlying selection while you still carry the overlap and investment risk underneath.
- Holding Period
A holding period measures how long capital remains invested, separating elapsed holding time from a projected exit and from cash reaching you.
- Investment Policy Statement
An investment policy statement records your portfolio's purpose, constraints and responsibilities to guide decisions as needs and circumstances change.
- Liquidity Risk
Liquidity risk is the risk of being unable to access money when needed, even when a private investment has a reported value in your portfolio.
- Lockup
A lockup restricts when an investor may seek withdrawal from a private fund; reaching its end does not guarantee payment or immediate access to cash.
- Redemption Gate
A redemption gate limits withdrawals from a fund even when investors may submit requests, so permission to ask does not guarantee receipt of cash.
- Unfunded Commitment
An unfunded commitment is capital already promised but not yet called, so it still counts against you before any new private investment.