VC Cafe

MARCH 11, 2010

The New York Times says the new fund is a signal that Silicon Valley is being revived, but according to the Wall Street Journal , it was lower fees and carry that facilitated securing the capital: It helped that Battery proactively offered some investor-friendly terms.

North America 76

North America Israel Silicon Valley Private Equity 76

Both Sides of the Table

JANUARY 5, 2010

I didn’t negotiate hard on carried interest. I figured that the alternative was that I start my third company with no salary and all risk. I had nothing to lose! And that’s exactly how I got into the VC world. On half salary and my own moving expenses. I figured I was new to VC and had much to prove.

Entrepreneur 293

Entrepreneur CTO Hire South America Salary 293

Gust

MAY 7, 2014

In many, if not most, cases, this management fee can significantly exceed the “earned” amount from the “carried interest”). Invested Interests capital company general partners investing IPO startup venture capital fund' original post can be found on Quora @ [link] *.

Venture Capital 154

Venture Capital IPO Limited Partner Carried Interest 154

Gust

SEPTEMBER 6, 2014

If an early stage fund therefore targets, say, a 20% annualized gross return (to compensate for the risk and for the GP’s carried interest), that means every individual company in the portfolio needs to be at least theoretically able to return that entire amount for the whole portfolio.

Exit Strategy 116

Exit Strategy Seed Stage Early Stage Carried Interest 116

Hunter Walker

MARCH 30, 2023

When she asked what would I recommend my response wasn’t about getting rid of carried interest or breaking up the big companies but about customer support. The conversation evolved to one about how our industry (venture, startups, tech in general) could better message about the positive role we play in the economy.

United States 70

United States Carried Interest Engineer Viral 70

Steve Blank

MARCH 26, 2014

Worse, Robert Adams and his two partners got 20% of the carried interest in the fund, resulting in payouts of $30 million to the partnership. The success of Documentum and Document Sciences, they felt, came largely from Xerox technology and customers, yet the startup companies XTV funded got all the credit.

Startup 331

Startup Business Model Lean Russia 331

Transformify

MAY 24, 2018

Key responsibilities in this role include: Overseeing and sign-off of the financial statements and management accounts; Overseeing the developing the budgeting and forecasting process and contributing to the strategic direction of the business; Overseeing production of the fund accounts and the general administration of the funds; Overseeing the carried (..)

Finance 40

Finance Carried Interest Forecast Valuation 40

The Startup Magazine

MARCH 22, 2019

An article in Forbes explains that a venture capital firm makes its money through management fees (a percentage of the amount of capital that they have under management) and carried interest (a percentage of the profits of the business). Investor Involvement.

Angel Investor 122

Angel Investor Venture Capital Accredited Investor Equity 122

VC Adventure

MAY 19, 2010

My partner Jason has an impassioned post up about the carried interest debate currently taking place in Congress. I have many of the same concerns that Jason outlines in his blog post about the move to change the tax treatment on carried interest. Obviously this issue is important to me and to all VCs.

Carried Interest 75

Carried Interest India Capital Gains China 75

ithacaVC

JANUARY 10, 2012

Managing Partner/General Partner (I have seen some with Managing Directors too like an investment bank): top dogs that run the shop and own most of the carried interest. These roles typically do not have any carried interest. It carries cache. And it often carries carried interest too (though a lower share).

Partner 49

Partner Carried Interest Caching Harvest 49

ithacaVC

MAY 10, 2011

Fourth, GP1 is entitled to a carried interest in fund profits. Therefore, the returns from the sale/IPO of the fund’s portfolio companies must clear capital commitments before GP1 gets any carried interest. The amount is typically 20% of profits.

Carried Interest 51

Carried Interest Ratchet Limited Partner Due Diligence 51

View from Seed

OCTOBER 29, 2014

FoFs are typically structured as limited partnerships similar to a VC fund itself, and they typically charge an annual management fee and carried interest on profits – again just like the underlying VC funds in which they invest.

LP 335

LP Private Equity Institutional Investors Venture Capital 335

David Teten

SEPTEMBER 2, 2017

While both the average founder and the average senior partner own 21 percent of their management firm, only the former takes home an equivalent portion of the firm’s carried interest the capital gains investors share with management companies. Senior partners take home a lower 15 percent of the carried interest….Summarizing

Private Equity 60

Private Equity Venture Capital Equity Partner 60

VC Adventure

MAY 19, 2016

Things such as our “no a s” rule, what we (along with our friends at Techstars) now call #givefirst , putting entrepreneurs first and including all of our employees (and Pledge 1%) in our carried interest all came out of these discussions.

Colorado 58

Colorado Belgium Carried Interest Community 58

Agile VC

OCTOBER 29, 2014

FoFs are typically structured as limited partnerships similar to a VC fund itself, and they typically charge an annual management fee and carried interest on profits – again just like the underlying VC funds in which they invest.

Venture Capital 279

Venture Capital LP Private Equity Institutional Investors 279

David Teten

MARCH 2, 2013

Ironically, it may be true that it is better for the VCs themselves to raise smaller funds because the more volatile a fund the more valuable the carried interest (which has, after all, the exact same payout structure as a call option). But I’m sure that has nothing to do with why those firms structure that way.”.

LP 114

LP Securities and Exchange Commission Silicon Valley Venture Capital 114

Seeing Both Sides

MAY 11, 2010

On Financial Reform, Barney Frank was very direct when I pressed him on the myriad restrictions that are being discussed in the Senate bill around angel investing and the discussions about taxing carried interest. Here's what he said: "We will exempt venture capital from the carried interest tax.". "We

District of Columbia 36

District of Columbia DC Carried Interest Massachusetts 36

Professor VC

JULY 25, 2013

Funders Club ( which I''ve written about previously ) recently launched a referral program where angels can receive 10% of the carried interest in a deal they refer that ultimately gets investment from an FC fund. In this program, an angel can ask the entrepreneur for an allocation of the round and then syndicate through AngelList.

Term Sheet 46

Term Sheet Silicon Valley Syndication Syndicate 46

Agile VC

NOVEMBER 13, 2012

a VC fund’s entire portfolio in aggregate, net of management fees and carried interest) a good return from an LP’s perspective would be 2.5-3.0x So at a fund level (e.g. typically, which in most cases would to >20% IRR.

LP 154

LP Portfolio Venture Capital IRR 154

Women Entrepreneurs Can

MAY 9, 2019

VCs tend to gain most of their returns through carried interest- a percentage received as compensation from the profits of a hedge fund or private equity. These are crucial players in your space- they typically invest a substantial amount of money to organizations (averaging around $10 million).

Programming 40

Programming Sweat Equity Startup Private Equity 40

Seeing Both Sides

MARCH 22, 2011

But then everyone got distracted with the financial crisis and (yet) more regulation related to SEC registration and battles over the tax treatment of carried interest. They released a series of spot-on recommendations to help bring back the IPO market.

IPO 38

IPO Investment Bankers Massachusetts SEC 38

Startup Company Lawyer

MAY 13, 2009

The budget proposal is wide ranging, and includes, for example, proposed changes with respect to the taxation of “carried interests&# in partnerships, as well as sweeping reform of the international tax area. This week, the Obama Administration released the first comprehensive summary of its budget proposal.

Capital Gains 47

Capital Gains Stock Small Business Redemption 47

Hippoland

JULY 24, 2018

For all of these reasons, this is why microfund managers who are able to raise more money on subsequent funds end up doing so, because for the same amount of work and risk, you’d much rather be paid more in salary and in carried interest later. 4) You should love fundraising.

Salary 48

Salary Capital Call Bootstrapping Cofounder 48

Hippoland

JULY 24, 2018

For all of these reasons, this is why microfund managers who are able to raise more money on subsequent funds end up doing so, because for the same amount of work and risk, you’d much rather be paid more in salary and in carried interest later. 4) You should love fundraising.

Salary 48

Salary Capital Call Bootstrapping Cofounder 48

BeyondVC

JUNE 29, 2005

While VCs get management fees to pay the bills, it is the carried interest portion or % of profits that VCs receive that really drives our thinking and aligns our economics with performance. We make money when our LPs make money which means that the companies we fund and entrepreneurs that we back need to be successful.

LP 60

LP Private Equity Due Diligence Venture Capital 60

Professor VC

JUNE 20, 2011

While my ownership stake in the company has been diluted through these financings (and the merger with uControl), my carried interest (paper value of my equity) has been going up with each increase in valuation. As I said up front, I have mixed emotions about the financing.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

K9 Ventures

NOVEMBER 30, 2008

In addition, there is a performance incentive — the Carried Interest or Carry. The carry is typically around 20% of any gains on the fund. In return for the operational role the GPs play, their firm receives a Management Fee. Industry averages for the management fee are expected to be around 2.5%

IRR 48

IRR Venture Capital LP Early Stage 48

Steve Blank

OCTOBER 29, 2009

But the biggest innovation was the “carried interest” (called the “carry”.) Aligning their interests with their limited investors and the entrepreneurs they were investing in. It would charge its investors annual “management fees” to pay for the firm’s salaries, building, etc.

Silicon Valley 129

Silicon Valley SBIC San Francisco RSS 129

Seeing Both Sides

MAY 31, 2010

I read the article in The New York Times on the carried interest debate and was shocked to see my name and a reference to me that read: " As the Senate Democrats sent signs that they were open to a tax increase, investors and their lobbyists mobilized quickly, warning that the proposal could stifle investments that create jobs.

Carried Interest 35

Carried Interest New York Massachusetts Greece 35

This is going to be BIG.

FEBRUARY 25, 2019

Partners, in my mind, should have carried interest (upside) in the fund and be able to lead deals and take board seats. They should be the kinds of key people that limited partners are basing their investment decisions on the fund itself on—not two to three year rotational employees.

Syndication 109

Syndication Syndicate Angel Investor Cap Table 109

This is going to be BIG.

JUNE 29, 2020

4) We need to push the Federal Government to close the carried-interest tax loophole —but we should do it in such a way where the localities where it gets collected get a share of the income from it. Closing the carried interest tax loophole is something Trump said he was going to do when he campaigned.

New York 153

New York Vermont Carried Interest New Jersey 153

This is going to be BIG.

JANUARY 10, 2021

Last year, I went to an National Venture Capital Association dinner where the President of the organization, Bobby Franklin, spoke about all the great things our lobbying group was doing for VCs—like keeping our carried interest tax loophole.

Venture Capital 158

Venture Capital Cap Table Accredited Investor Silicon Valley 158

Both Sides of the Table

JANUARY 2, 2016

VCs also get capital gains tax rates on “carried interest,” which is what irritates the masses. Carried interest is the upside that VCs get after returning the money they raised – it is the VC “profit” if you will. Maybe that’s as it should be.

Dividend 150

Dividend Silicon Valley Capital Gains Stock 150

Hunter Walker

AUGUST 15, 2023

I can have my immigration reform and my carried interest designation? Taxes are a real issue for sure – much of their work is on the company-formation side (how stock options are treated, etc) and that matters to founders and teams. But quite simply we’ve reached the point where priorities deserve to be flipped.

America 100

America United States Stock Options Carried Interest 100