When a deal has an investment with a liquidity event (exit, dividend, acquisition, IPO, etc.), the Seed Labs team performs the following steps to ensure a smooth disbursement to investors:

1. Seed Labs is informed of a liquidity event.
2. Seed Labs coordinates with the investment to obtain details of the liquidity event and execute any necessary signatures.
3. Seed Labs reviews the transaction documents and prepares a distribution preview for GP approval. This distribution preview includes a detailed breakdown of the distribution to each investor, including carry paid to the GP and other deal partners as applicable.
4. Seed Labs coordinates with the company to receive the proceeds.
5. Seed Labs performs a tax review and applies any required tax withholding.
6. Once approved, Seed Labs processes the distribution and disburses to all parties.

In-kind distributions

When a deal distributes shares instead of cash — an in-kind distribution — there are extra steps, like opening a brokerage account in the deal entity's name. Our Pre-IPO Planning guide walks through the whole process.