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Explaining carried interest

The Equity Kicker

Carried interest’ is the name given to the profit share schemes that investors in venture capital funds, typically called ‘LPs’, use to incentivise the partners at at the funds in which they invest. Much like options in a startup carried interest schemes vest over time, typically five or seven years.

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Top 29 Startup Posts May 2010

SoCal CTO

While Google fights on the edges, Amazon is attacking their core - Chris Dixon , May 22, 2010 Google is fighting battles on almost every front: social networking, mobile operating systems, web browsers, office apps, and so on. We'll be your hosts for a three-part series about the use of MongoDB here at Etsy. The Curation Team. Stay Tuned.

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How to Negotiate a Partner Role at a Venture Capital or Private Equity Firm

David Teten

It’s hard enough to get a job at a venture capital or private equity firm; it’s even more complex to join as a Partner. Sean Seton-Rogers, Partner, Profounders Capital, breaks the conversation into three areas: Control: voting/veto for new deals, share of management company. In theory, carry correlates with decision-making power.

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

The Startup Magazine

Investment firms are staffed with analysts, partners, and others to ensure deals are soundly vetted. 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).

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Joining The B Team

VC Adventure

In fact, before there was Foundry we got together to talk about our core operating principles. As we’ve operated our firm over the past 9 years we’ve expanded on these ideas and tried to further integrate them into our business and our lives.

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How VCs Make Money….Hopefully

ithacaVC

First, VCs get capital commitments from limited partners (i.e., Second, the General Partner of VC1 is the entity that runs the fund (let’s call it GP1). So, in this respect, you can think of GP1 as a limited partner. It literally has an investment share in the fund just like any other limited partner. investors).

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LP Conference

BeyondVC

I am not sure how many entrepreneurs understand the structure of venture capital funds but the bottom line is that while VCs manage funds, we ultimately report to our investors or Limited Partners (LPs). It is not our money, and we have a fiduciary responsibility to manage it properly and generate the returns our LPs expect of us.

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