Scouts
What should a scout ask about eligible carry on a deep tech startup?
a deep tech startup: Eligible carry requires an agreement, a defined base, and the events that can create distributable amounts.
Eligible carry requires an agreement, a defined base, and the events that can create distributable amounts. A headline percentage does not specify deductions, timing, follow-ons, vesting, or termination treatment. A sourced investment can produce no carry.
Start with the decision
Map the actual agreement's conditions and use fictional arithmetic only to explain the mechanism. Include a zero-distribution case. Ask qualified advisers about legal and tax terms and avoid treating future carry as expected income.
The illustrative scenario
This is an educational workbook. The company or fund and all numerical inputs below are fictional. They are not ADIN results, customer claims, market benchmarks, or a forecast.
The fictional team is developing a sensing component with a laboratory prototype. Commercial customers require validation outside the lab before a design win. Manufacturing and qualification milestones compete for the same runway.
A successful laboratory test does not establish production reliability or buyer adoption. Keep technical feasibility, manufacturability, customer qualification, and commercial commitment separate.
Carry arithmetic after an explicitly assumed base
For this fictional example only, assume the applicable agreement defines $50,000.00 as distributable net carry and allocates half of that amount to the scout. Multiplication gives $25,000.00. The difficult question precedes the multiplication: whether the deal qualifies and whether the defined distributable base ever exists.
A paper valuation, a completed introduction, or the fund's first investment does not establish that payment is due. Eligibility, attribution, deductions, follow-on treatment, vesting, and payment timing need the actual agreement. The zero-base row is as important as the positive row because an investment may never create distributable carry.
A successful laboratory test does not establish production reliability or buyer adoption. Keep technical feasibility, manufacturability, customer qualification, and commercial commitment separate. Keep company evaluation separate from compensation expectations. ADIN's GPs make the final investment decision, and the public scout page should be read together with the applicable agreement. This example is an explanation of arithmetic and questions, not a projection of income or a legal interpretation.
| Item | Illustration |
|---|---|
| Invented distributable net carry base | $50,000.00 |
| Assumed share for this exercise | 50% |
| Multiplication under those assumptions | $25,000.00 |
| Share if eligible net carry is zero | $0.00 |
Use this worksheet
Answer the questions with a source, date, owner, and next action. Mark an unknown as unknown. Use public or permissioned information and involve a qualified specialist when a question requires expertise beyond the team’s competence.
- What amount is the percentage applied to?
- What deductions come first?
- Which investment qualifies?
- When can payment occur?
- What survives leaving the program?
Questions specific to this scenario
- What test can be reproduced?
- Which milestone depends on a third party?
- What changes between prototype and production?
Request dated test protocols, repeatability results, independent technical references, and a milestone budget. Distinguish a customer's evaluation agreement from an order.
A concrete next test
Ask a qualified technical reviewer to identify a repeatable test that distinguishes laboratory feasibility from the next commercial milestone. Record the equipment, conditions, dependencies, and evidence needed. A dramatic demonstration should not substitute for the specified validation process.
Interpret the result
A multiplication example does not predict an exit or describe every waterfall. ADIN's public program copy and the applicable agreement should be read together, with GPs retaining the final investment decision.
Compare the next financing milestone with the resources and dependencies needed to reach it. Use qualified technical reviewers for claims outside the investor's expertise.
Sources and method
These primary resources provide background for the concepts. The fictional scenario, calculations, and worksheet are ADIN educational examples; the sources do not report or validate those invented results. Reviewed October 11, 2026.