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How VCs Make Money….Hopefully

ithacaVC

Typically, that might be 2% of committed capital per year paid quarterly. In its simplest form, think of profits as amounts returned to the fund in excess of capital commitments. Just like paying the portfolio company management team for doing its job. So, for VC1, that would be $2mm a year.

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Why VC’s Don’t “Crossover” Invest

Agile VC

This person is an experienced CEO and a veteran of several startups, yet appreciating this nuance of how VC’s operate their business was relatively unfamiliar to him. If Acme Ventures has a new supply of capital with fund IV, wouldn’t they want to reserve some of that for companies in Fund III? Why is this?

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