A VC firm is considering two compensation structures. The fund is $100m. Management fees will be 2.5%
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A VC firm is considering two compensation structures. The fund is $100m. Management fees will be 2.5% per year on committed capital for all 10 years.
- Option A: the fund will charge 25% carry with committed capital as the basis.
- Option B: the fund would have 20% carry on all investment capital.
Q1. Suppose that total exit proceeds from all investments are $150m at the end of the fund's life. How much carried interest would be earned under A and B?
Related Book For
Venture capital and the finance of innovation
ISBN: 978-0470454701
2nd Edition
Authors: Andrew Metrick
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