Typically, the Cornerstone LPA follows the standard VC approach:
- **During the Investment Period:** management fees are usually charged on **committed capital**
- **After the Investment Period:** fees typically **step down** and the fee base often shifts to **invested capital or net invested capital**, rather than total commitments
In practice, many managers think of **2% as an average over the full fund life**, not necessarily a flat annual rate for all 10 years. The earlier years may be higher, with a lower post-investment-period rate.
The exact economics are one of the fund-specific variables the GP customizes in Cornerstone.
References:
- https://decilegroup.com/articles/lpa-template-for-vc-funds
- https://decilehub.com/base/1-general_questions/5236-clarification-on-2-management-fee
- **During the Investment Period:** management fees are usually charged on **committed capital**
- **After the Investment Period:** fees typically **step down** and the fee base often shifts to **invested capital or net invested capital**, rather than total commitments
In practice, many managers think of **2% as an average over the full fund life**, not necessarily a flat annual rate for all 10 years. The earlier years may be higher, with a lower post-investment-period rate.
The exact economics are one of the fund-specific variables the GP customizes in Cornerstone.
References:
- https://decilegroup.com/articles/lpa-template-for-vc-funds
- https://decilehub.com/base/1-general_questions/5236-clarification-on-2-management-fee