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Portfolio Deal Economics — Waterfall

Chart 2B  ·  Left: how gross referral revenue splits between funders and the referral firm. Right: the funder's own P&L — capital deployed vs. fee share received.
Acquisition costs are funded by F1–F4, not by the referral firm. The funder recovers capital and profit entirely through their fee share percentage.

Revenue Flow — Referral Firm Perspective

How gross referral revenue splits at settlement

Funder P&L — Capital vs. Return

Funder capital deployed vs. fee share received

Revenue Flow Detail
StepItemAmount% of Gross Referral RevenueNotes
1Gross Referral Revenue$67,930,000100%Referral firm's share of contingency fees across all settling cases
2Less: Funder Fee Share−$31,593,696−46.5%Paid to F1–F4 per their fee agreements (35–45% of gross referral revenue per batch). Covers funder capital recovery + profit.
3Net to Referral Firm$36,345,30453.5%Retained by referral firm — no acquisition cost deduction; referral firm deployed no capital
Funder P&L Detail
ItemAmountNotes
Acquisition Capital Deployed−$12,088,200Marketing spend across 27 batches, 6 campaigns — funded by F1–F4
Fee Share Received+$31,593,69646.5% of gross referral revenue at settlement — the funder's return mechanism
Funder Net Profit+$19,505,4962.61× MOIC on capital deployed  ·  Breakeven Q1-2027  ·  Blended IRR ~18–27%
How the two parties' economics relate:
• $353.6M gross settlements → $135.3M in legal fees (38.3% contingency avg) → $67.9M to referral firm pool → $31.6M to funders → $36.3M net to referral firm.
• Funder MOIC: 2.61× on $12.1M deployed ($31.6M returned). The funder's fee share agreement is the sole mechanism for capital recovery — there is no separate cash reimbursement from the referral firm.
• Referral firm net: $36.3M with no acquisition capital at risk. The referral firm's exposure is operational (case management, handling firm relationships, timeline risk), not financial capital.
• Note on the previous model: The prior version of this chart incorrectly deducted the $12.1M acquisition costs from the referral firm's net, implying the referral firm bore those costs. That was the wrong party — the funders deployed that capital and recover it through their fee share.
• Data sourced from Calc_Fees TOTALS row. Excludes overhead and staffing — this is pre-overhead operating profit for both parties.