Management Fee

Most funds charge a management fee that they use to cover operating expenses, pay salaries, benefits and other compensation of team members. Leads decide what their management fee, and they may vary their fee per investor. The standard management fee is 2%.

In addition to management fees, VC funds usually keep 20% of the profits for their own investors, known as carry (carried interest).

Note that some leads will re-invest their management fees into the fund – this is known as recycling management fees.

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