Have questions about the Start Fund?
Join an AMA on July 9th
Previous Post
Next Post
0

Asked by

Community Member

on

in

Fund Economics

How Does a 2% Management Fee in a 10-Year $10MM Fund Result in $2MM Deduction and $8MM for Investment?

Hi everyone! Sorry in advance for the silly question but how come that 'A 2% Management Fee in a 10 year fund of $10 MM totals $2 MM so the fund only has $8 MM to invest'? I thought 2% of 10MM is 200K? This info is from question #6 of the current sprint.
1 See in Base
0

Answered by

Community Member

on

There are 10 years (usually) of annual Managment Fees, so 10 times 2% is 20%.

Join VC Lab

VC Lab, the leading venture capital accelerator, empowers new and emerging managers worldwide to close ethical, high-performing funds in under six months. The program provides cutting-edge tools, expert mentorship, and a global network to raise more money in less time. Apply if you want to build a meaningful venture capital firm.

Apply Now
How do I start raising my first venture fund? What are the key considerations for becoming a Limited Partner?
How can I improve my emerging manager firm's deal flow? What strategies help attract institutional LPs?
How do I build a compelling investment thesis? What are best practices for portfolio management?
How can I differentiate my VC firm in a crowded market? What are the typical fund terms for emerging managers?