Under The Hood: How VC Funds Operate (And How That Is Changing)

3 min read

This is an article meant primarily for entrepreneurs and LPs (limited partners i.e., those investing in a VC fund), albeit we think it’s useful for VCs too. Managing Partners are typically the ones managing the fund’s structure, so other members of the firm are rarely exposed to these terms. So without further ado, here are the top 10 items under a venture capitalist’s hood. 1) Management Fee Historically VCs have operated on a 2% management fee i.e., 2% of the funds are used to run the fund every year. This is on commitments i.e., a $200M fund won’t have all…...

This article is free to read

Login to read the full article


By subscribing to our main site, you will also be subscribed to DDIntel - our regular letter showcasing our featured articles and applications.

Amit Garg I have been in Silicon Valley for 20 years -- at Samsung NEXT Ventures, running my own startup (as of May 2019 a series D that has raised $120M and valued at $450M), at Norwest Ventures, and doing product and analytics at Google. My academic training is BS in computer science and MS in biomedical informatics, both from Stanford, and MBA from Harvard. I speak natively 3 languages, live carbon-neutral, am a 70.3 Ironman finisher, and have built a hospital in rural India serving 100,000 people.