Venture fund economics calculator
Enter your fund size, fees, carry and GP commit. See your fee income each year, what the partners have to put in, and what the fund must return before carry pays out.
- Management fees over the fund's life
- Fee income per year
- GP commit the partners must fund
- Fund must return before carry pays out
Fee income by year
Show as a table
Carry at different outcomes
Gross multiple on the capital you actually invest, after fees. GP commit is treated as carry-free.
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How management fees work
Most venture funds charge an annual management fee of around 2% of committed capital during the investment period, usually the first four to five years. It pays for the team, office, legal, audit and fund administration.
After the investment period many funds step the fee down, either to a lower rate or to a percentage of the capital still invested. Fees come out of LP commitments, so every dollar of fees is a dollar that isn't invested. On a 10-year fund at 2%, fees can take up close to a fifth of the fund.
How much should GPs commit?
LPs want the partners to have real money in the fund. A GP commit of 1% to 2% of fund size is a common reference point, but LPs look at it relative to the partners' own wealth, not just the percentage.
The commitment is called over time alongside LP capital, so plan for the cash across the investment period, not on day one. Some LPs will ask where it comes from, and whether any of it is funded by waiving management fees.
When does carry start paying out?
In a whole-fund (European) waterfall, LPs get back everything they paid in, including the fees, before the GPs see any carry. That's why the fund has to return more than 1x on the capital it actually invests just to reach the carry line.
With a hurdle, LPs also receive a preferred return, often 8% a year in funds that use one, before carry. Many US venture funds have no hurdle. Where there is one, a catch-up usually lets the GPs recover their full share of profits once the hurdle is cleared.
What this calculator assumes
- All committed capital is called over the fund's life.
- Fees after the investment period are charged on committed capital. Charging on invested capital would lower them.
- No recycling of fees or proceeds, and no fund expenses beyond the management fee.
- A whole-fund waterfall. With a hurdle, the preferred return compounds on LP capital for the years you enter, with a full GP catch-up.
- The GP commit pays no carry and shares returns like LP capital.
This is a planning tool, not legal, tax or investment advice. Your LPA governs the real numbers.
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