Submit
Log In Sign Up
Go to Fund Economics
Previous Question Next Question
0
Fund Economics

How Does a 2% Management Fee in a 10-Year $10MM Fund Result in $2MM Deduction and $8MM for Investment?

Asked by:
Community Member
1
0
0
May 03, 2023
Hi everyone! Sorry in advance for the silly question but how come that 'A 2% Management Fee in a 10 year fund of $10 MM totals $2 MM so the fund only has $8 MM to invest'? I thought 2% of 10MM is 200K? This info is from question #6 of the current sprint.
1 answer
0
Community Member
Accepted Answer
May 03, 2023
There are 10 years (usually) of annual Managment Fees, so 10 times 2% is 20%.
Add a comment

Log In or Sign Up

Please Log In, or Sign Up to participate in the discussion.

Log In
or
Sign Up

Apply to VC Lab Cohort 16

Get full access to Decile Base and the Decile Hub venture platform for free by joining the VC Lab program.

Apply to VC Lab Cohort 16
Related Questions
Is it common to collect a 3% management fee during the investment period and reduce it to 1% afterward, as long as the total over 10 years doesn't exceed the allocation? 0 May 03, 2023 What Discounts Should Be Offered to Early LPs: Management Fee or Carry Discount and How Much? 0 May 03, 2023 Management Fee 2 May 25, 2023 How many people can a $5M fund support? 1 Dec 22, 2023 Should I show or promise a lower IRR and then over deliver bigger returns or promise higher IRR to attract LPs and investors. I got a mixed reaction from the different LPs 1 Jun 24, 2024