Typical Fees for Venture Capital General Partners
The General Partnership (GP) of a venture capital fund typically receive to types of fees for their investment services:
- A 20% carried interest. This means they receive 20% of all of the capital gains on the funds they invest. Typically they must repay all of the contributed capital or they may be forced to pay this carried interest back to the Limited Partners (LP), this is known as a “claw-back”
- A 2.5% management fee. This fee is charged on all COMMITTED capital, regardless of whether or not it has been invested yet.
Tags: Carried Interest, claw-back, Fees, Management Fee, Rule of Thumb