Question: A VC firm is considering two different structures for its new $ 2 0 0 M fund. Both structures would have management fees of 2
A VC firm is considering two different structures for its new $M fund. Both structures would have management fees of percent per year on committed capital for all ten years. Under Structure I, the venture capitalist in the fund would receive a percent carry with a basis of all committed capital. Under Structure II the venture capitalist in the fund would receive a percent carry with a basis of all investment capital. Suppose that total exit proceeds from all investments are $M over the entire life of the fund. How much GPs and LPs would earn under each of these two structures? What is the GVM and VM under each of these two structures?
Under Structure I, GPs carried interest in $ amount
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