The Economics of VCs Recycling Management Fees
Feld Thoughts
AUGUST 13, 2018
Several years ago, I wrote a post titled Why VCs Should Recycle Their Management Fees. From the start of Foundry Group in 2007, we have felt strongly about this. We feel that if an LP gives us a $1 to invest, we should invest at least that $1, not $0.85 (the average fee load over a decade for a typical VC fund is 15%.) Our goal for each fund is actually to invest closer to 110%, which means if an LP gives us a $1 to invest, we are actually investing $1.10.
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