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The Economics of VCs Recycling Management Fees

Feld Thoughts

The post specifically discussed three items: Management Fees, Recycling, and Carried Interest. The section from their post follows: In addition to management fees, the process of reinvesting realized proceeds into new investments, or recycling, can also meaningfully impact net returns and alignment. That’s worth remembering.

LP 117
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What Makes an Entrepreneur? Cojones (7/11)

Both Sides of the Table

Partners in VC funds only wanted to fund entrepreneurs who had a certain percentage of their net worth tied up in their venture. VCs don’t have the same net worth litmus test and great entrepreneurs have a ton of sources for seed money to get financed very early. I didn’t negotiate hard on carried interest.

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What’s the Difference? Venture Capitalist vs. Angel Investor

The Startup Magazine

An article in Forbes explains that a venture capital firm makes its money through management fees (a percentage of the amount of capital that they have under management) and carried interest (a percentage of the profits of the business). Investor Involvement. Entrepreneurstates that angel investments usually are around $600,000.

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Am I just a greedy VC?

VC Adventure

My partner Jason has an impassioned post up about the carried interest debate currently taking place in Congress. While I wouldn’t say that I’m a “fan” of government, I’ve always been of the mind that some level of government safety-net is appropriate. Obviously this issue is important to me and to all VCs. Invest in education?

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Where Does VC Money Actually Come From? [Flowchart]

View from Seed

A smaller portion of the total capital in the VC ecosystem comes from high net worth individuals. FoFs are typically structured as limited partnerships similar to a VC fund itself, and they typically charge an annual management fee and carried interest on profits – again just like the underlying VC funds in which they invest.

LP 335
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The VC Shakeout: Are We There Yet?

Agile VC

a VC fund’s entire portfolio in aggregate, net of management fees and carried interest) a good return from an LP’s perspective would be 2.5-3.0x So at a fund level (e.g. typically, which in most cases would to >20% IRR.

LP 154
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Where Do Venture Capital Dollars Actually Come From? This Visual Explains

Agile VC

A smaller portion of the total capital in the VC ecosystem comes from high net worth individuals. FoFs are typically structured as limited partnerships similar to a VC fund itself, and they typically charge an annual management fee and carried interest on profits – again just like the underlying VC funds in which they invest.