Waterfall

A waterfall for a med spa is a method of distributing the proceeds from a sale or investment among various stakeholders based on a predetermined order. It outlines how the money will be split, starting with the highest priority claims, such as paying off debt or investors, before distributing remaining funds to other parties with ownership.

This structure ensures that everyone receives their share in a fair and organized manner. Understanding when and how your med spa gets paid is crucial in private equity deals involving med spas and can dramatically shift the risk profile across stakeholders depending on their position in the waterfall.