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Explaining carried interest

The Equity Kicker

Similarly, if the fund returned £40m and there is no hurdle then the profit would be £10m, and the carry pot would be £2m. Venture Capital

Why Taxing Carried Interest As Ordinary Income Is Good Policy

A VC : Venture Capital and Technology

The House has passed a bill this past week that would change the taxation of carried interest from capital gains treatment to ordinary income treatment. I am in favor of taxing carried interest as ordinary income and I'd like to explain why I think it is good policy. That seems like bad policy.

Indirect Attack on Carried Interests by the NYC Department of Finance

Recent Buzzes - VC Experts, Inc.

Decision-makers at the New York City Department of Finance have notified practitioners that the Department is actively considering the implementation of a new unincorporated business tax ("UBT") audit policy targeted at investment partnerships, such as hedge funds and private equity funds.

Burnham's Beat: Carried Interest Deal Cut, Let the Workarounds.

Burnham's Beat

Carried Interest Deal Cut, Let the Workarounds Begin! So Congress has apparently cut a final deal on taxing carried interest.    To the extent that carried interest reflects a return on invested capital, the bill would continue to tax carried interest at capital gain tax rates.

Incentives and Carried Interest

Brad Hargreaves

Brad Hargreaves | startup adventures in nyc a blog by Brad Hargreaves HOME Me Press HOME Uncategorized Incentives and Carried Interest Incentives and Carried Interest The House recently passed a bill to tax carried interest at the higher income tax – rather than the lower capital gains – rates.

Speaking up More about VC Carried Interest Taxation and the - VCball

VCball

Why Raising Taxes on Carried Interest Doesnt Make Cents | Main. » Speaking up More about VC Carried Interest Taxation and the Destruction of U.S. Stephen concedes in his comment that this might be the case; there will be less VC capital if carried interest is taxed higher whatever the form. VCball.

Carried Interest Debate Cont.: The Death of Sweat Equity?

Burnham's Beat

Carried Interest Debate Cont.: Fred Wilson has a post up this morning on the carried interest debate in which he advocates taxing all carried interest as ordinary income. At its heart, the critics of carried interest appear to be unwilling to recognize that its possible to make an intangible investment.

The Tax Man Cometh: Carried Interest, Risk, Fees, and Taxes

Burnham's Beat

The Tax Man Cometh: Carried Interest, Risk, Fees, and Taxes. So there’s a move a foot by some within Congress to tax all carried interest as ordinary income instead of capital gains. The Tax Man Cometh: Carried Interest, Risk, Fees, and Taxes. Burnhams Beat. Articles on Technology and Finance. About Bill.

Sloppy Reporting from The New York Times on Carried Interest Debate

Seeing Both Sides

I read the article in The New York Times on the carried interest debate and was shocked to see my name and a reference to me that read: " As the Senate Democrats sent signs that they were open to a tax increase, investors and their lobbyists mobilized quickly, warning that the proposal could stifle investments that create jobs.

Burnham's Beat: Theater of the Absurd: Capital Gains Now Being.

Burnham's Beat

« Carried Interest Deal Cut, Let the Workarounds Begin! According to Bloomberg, there’s a nasty surprise in the bill that eliminates capital gains treatment for carried interest in investment partnerships.  Burnhams Beat. Articles on Technology and Finance. About Bill. Archived Posts. Blog Roll. IPO/M&A Lists.

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What Is Going To Happen In 2017

A VC : Venture Capital and Technology

Here’s what I expect to happen this year: Trump will hit the ground running, cutting corporate and personal taxes, and eliminating the preferential treatment of carried interest capital gains. Happy New Year Everyone. We just don’t know the timing of it. The IPO market, led by Snapchat, will be white hot.

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Memo to Congress - There are Legal Issues With Taxing Carried Interest as Ordinary Income

Recent Buzzes - VC Experts, Inc.

The carried interest debate has kicked into high gear, with legislation currently under consideration that could tax carried interest as ordinary income. Much of the conversation relates to the incentives or disincentives this would create or whether it is advisable. On that front alone, our view is that it's a bad idea.

Fund Level Vs Deal By Deal Carry

A VC : Venture Capital and Technology

A traditional venture fund will take its losses on a given portfolio of twenty to twenty five investments and earn them back with their gains before calculating their carried interest. The carried interest is the primary way a venture capital firm makes money. At USV we take a 20% carry. That might be good.

Burnham's Beat: Google Getting Gunshy on Traffic Referral Deals?

Burnham's Beat

Carried Interest Deal Cut, Let the Workarounds Begin! Burnhams Beat. Articles on Technology and Finance. About Bill. Archived Posts. Blog Roll. IPO/M&A Lists. By Category. By Month. Recent Posts. Internet IPOs. Internet M&A. Software IPOs. Software M&A. Search This Blog. Subscribe to This Blog. RSS/ATOM Feed. Subscribe Via Email.

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Hey Look, Software Just Ate VC!

Mark Birch

Syndicates allow you to raise any amount of money on behalf of a startup and take 20% of the carry. . There’s now an app for that. . Well.

The Rise & Fall of Great Venture Firms [Part 1] ? AGILEVC

Agile VC

What’s a “fair” split of fee income and carried interest when a partner joins several years/funds after others?

Why I Don’t Celebrate Income Inequality

Both Sides of the Table

VCs also get capital gains tax rates on “carried interest,” which is what irritates the masses. Carried interest is the upside that VCs get after returning the money they raised – it is the VC “profit” if you will. What drives economic inequality in the US? Founders start companies. I dunno.

Don't Kill the VC Golden Goose! Why Raising Taxes on Carried.

VCball

Speaking up More about VC Carried Interest Taxation and the Destruction of U.S. Why Raising Taxes on Carried Interest Doesnt Make Cents. that Congress is contemplating raising taxes on venture capital fund managers by increasing taxes on what is known as “carried interest”, my heart sank. VCball. John R.

Where Does VC Money Actually Come From? [Flowchart]

View from Seed

This post was originally published on the personal blog of NextView founding partner Lee Hower. Subscribe here for more. Endowments. Foundation s.

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

Agile VC

Most folks reading this will know that many startups were built in part with the help of venture capital. Click the image to view a larger version.).

Burnham's Beat: Contributors Wanted: M&A & IPO Transaction Lists

Burnham's Beat

« Carried Interest Debate Cont.: Googles Postini Buy Has Some Interesting Implications » 06/27/2007. As an aside, its interesting to think of how projects like this may dis-intermediate some of the data brokers that collect, collate and resell this data (such as Factset ). Burnhams Beat. About Bill. Blog Roll.

Burnham's Beat: Software and Internet IPO and M&A Lists

Burnham's Beat

Carried Interest Debate Cont.: Every month I keep a record of all significant public company activity in the sectors I am most interested in: Software & Internet. Burnhams Beat. Articles on Technology and Finance. About Bill. Archived Posts. Blog Roll. IPO/M&A Lists. By Category. By Month. Recent Posts. Internet IPOs. Blogs.

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Burnham's Beat: Yahoo Buys Rivals From $75M More Than Their.

Burnham's Beat

« The Tax Man Cometh: Carried Interest, Risk, Fees, and Taxes | Main. Burnhams Beat. Articles on Technology and Finance. About Bill. Archived Posts. Blog Roll. IPO/M&A Lists. By Category. By Month. Recent Posts. Internet IPOs. Internet M&A. Software IPOs. Software M&A. Search This Blog. Subscribe to This Blog. RSS/ATOM Feed.

How do venture capital firms make money by investing in startups?

Gust

In exchange for investing capital to help the company grow, the fund receives an ownership interest in the company. Because in the early days a company will not be worth very much, the fund’s ownership interest will be worth exactly what it paid. This is the money that is invested into the startups.

Why Internal Ventures are Different from External Startups

Steve Blank

Worse, Robert Adams and his two partners got 20% of the carried interest in the fund, resulting in payouts of $30 million to the partnership. Henry Chesbrough is known as the father of Open Innovation and wrote the book that defined the practice. Henry is the Faculty Director of the Garwood Center for Corporate Innovation , at U.C.

There seems to be a lack of long-term investment in startups. Why is the 3-5 year exit strategy more desirable than a 10-20+ year timeframe?

Gust

If an early stage fund therefore targets, say, a 20% annualized gross return (to compensate for the risk and for the GP’s carried interest), that means every individual company in the portfolio needs to be at least theoretically able to return that entire amount for the whole portfolio. Locate the nearest exit

Burnham's Beat: Indian Outsourcers: Open Source's Best Friend or.

Burnham's Beat

The Tax Man Cometh: Carried Interest, Risk, Fees, and Taxes » 04/28/2007. He has outsourced all of his IT to India (its interesting to note that he has also outsourced his CFO to India, his customer service to the Philippines, and his manufacturing to China). Burnhams Beat. Articles on Technology and Finance. About Bill.

Joining The B Team

Seth Levine's VC Adventure

More recently I’ve become very interested in the B Corp movement. It’s great to talk about these principles. BtheChange.

Why Average VC Returns Don’t Really Matter

Agile VC

FoFs have a range of strategies of course, but broadly speaking LPs that invest in FoFs pay them a management fee and carried interest (on top of the fee & carry of underlying VC funds they invest in) for access, diversification, active management or a combination of all three. What about fund of funds (FoF), you ask?

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Venture Math 101

StartupCFO

My good friend and professional instigator David Crow sparked some reactions last week with this 100% on the money tweet. VC Math 101. MKS: $ 292M.

How to Compensate Next-Gen Venture Capitalists

Christine.net

If you're a partner, VC compensation is pretty straightforward - you get a piece of the partnership's profits, aka a "carried interest" in the fund. Here are the top three: Vested Interest. An associate is a issued a set number of "carry points" each year. Phantom Carry. You get $25K phantom carry.

Battery Ventures Announces New $750 Million Fund

VC Cafe

The New York Times says the new fund is a signal that Silicon Valley is being revived, but according to the Wall Street Journal , it was lower fees and carry that facilitated securing the capital: It helped that Battery proactively offered some investor-friendly terms.

What Is A "Venture Partner" And Why Does It Matter To You?

A VC : Venture Capital and Technology

Some common examples of Venture Partners are; former partners who are semi-retired but still want to be able to do deals, former entrepreneurs who have multiple business interests but want to be able to do deals with a VC platform, and a partner in waiting who is headed to become a full partner. We did want to work with Albert right away.

Why New York State Wants in VCs' Pockets Too

Fresh Inc.: The Staff Blog

Should venture capitalists and private equity firms get a tax break for driving economic growth? They say yes, they should. Their argument?

VCs See Uptick In 10-Year Returns

Fresh Inc.: The Staff Blog

At this time in 2011, the same rate of pooled end-to-end returns, net fees, expenses and carried interest, was 3.3 percent.

Why Internal Ventures Are Different From External Startups

Fresh Inc.: The Staff Blog

Worse, Robert Adams and his two partners got 20% of the carried interest in the fund, resulting in payouts of $30 million to the partnership.

The Slowly Declining Relevance of the Venture “Fund”

Thinking About Thinking

GPs calculate their carried interest based on how the fund performs. Here is the key point: some of these firms will not allow LPs to select the fund that most interests them and invest in that fund on a discrete basis. LPs calculate their returns based on multiples and IRRs of the fund. Let me elaborate. and on and on.

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Pari Passu or F.U.little guy

Professor VC

VCs profiled include Arthur Rock, Tom Perkins, Don Valentine, Dick Kramlich, Reid Dennis, Bill Draper and Pitch Johnson (fathers of the industry).

Brett Berson - Turning a Portfolio into a Community.

Redeye VC

While there have been some really positive changes in the last few years, for the most part it seems that the biggest innovation in venture capital during the last forty years has been the increase in carried interest from 20% to 25%. As a firm, we’ve tried to do things differently – and rethink traditional venture orthodoxy.

The VC Shakeout: Are We There Yet?

Agile VC

But it is also typically in the interests of those same stakeholders for the VC firm’s challenges not to be broadcast widely. 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 what’s actually happening?

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