Do Fund Partners Typically Receive Salary as W2 Employees, Partnership Distributions, or 1099 Contractors?
Is it customary for fund partners to receive salary as a W2 employee as a partnership distribution from the LLC or as a 1099 contractor?
For small funds, the managers frequently take distributions and do not get paid as either an employee or as a contractor. Only when the fund sizes are above $20 MM do managers start looking at salaries, and the salaries are reserved for junior team members without carry.