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Why VCs Should Recycle Their Management Fees

Feld Thoughts

When a fund has an exit, it can either distribute the money to its investors (the LPs) or it can “recycle it” and invest it in new and existing companies in the fund. At this point, it would have taken $6m of management fees (2% * 3 years) so it could recycle the $6m (hence, reinvesting it) while distributing $14m to the LPs.

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How To Change The World - Startups and angels: Along the way to.

Tim Keane

Distribution challenges?   Reduce donor risk and raise effectiveness of committed capital. Distribution challenges?   Reduce donor risk and raise effectiveness of committed capital.   You may need medical knowledge, engineering skill, marketing people.  Plan for how to get them.