Compensation

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In setting up a VC fund, you’ll need to determine compensation for the partners and team members.

Most funds use the 2% management fee with a 20% carry model.

This means 2% of the funds raised will be used for salaries, along with 20% of any of the profits.

In a $100M fund, $20M would be available to pay salaries each year over the ten-year life of the fund or $2M.

Some funds pay the management fee more heavily in the first five years and less in the later years of the fund.

For funds under $25M, a 2.5% fee is more common.

The carry is the profit from the investments.  

In most funds, the limited partners must receive their committed capital back before carry is paid out to the general partners.

New funds sometimes offer a lower management fee to those limited partners who help raise additional funds.

Some funds forego the management fee and take their total compensation in carry.


Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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On this episode of Investor Connect, Hall welcomes Luigi Amati, Chairman at META.

META is an international advisory and investment firm dedicated to the creation of knowledge-intensive companies. The group’s main activities are research results exploitation, support for startup creation and scale-up, and early-stage equity investment.

Through dedicated and independent business units (academy, investment, advisory), META coaches researchers and knowledge-intensive startups, invests from proof of concept to scale up and advises European, national, regional, and local governments on innovation and entrepreneurship policy.

Luigi started out as a researcher, developing computational mechanics software for a spin-off of Imperial College London before founding META in 1993. He is an experienced researcher, entrepreneur, ecosystem-builder, and investor, and this gives him the possibility to navigate all stages of the “knowledge to market” journey and entrepreneurial life-cycle.

As an angel investor, in 2007, he was one of the nine founding members of “Italian Angels for Growth,” today the largest angel group in Italy, and he now serves as the Chairman of Business Angels Europe.

Luigi graduated Summa cum Laude in Engineering from the University of Rome and holds a Master of Science and a Diploma from Imperial College London.

Luigi advises startups and investors, and discusses his investment thesis and the state of angel investing.

Visit META at www.meta-group.com, on LinkedIn at www.linkedin.com/company/meta-group_2/, and on Twitter at www.twitter.com/meta_group. 

Visit Business Angels Europe at www.businessangelseurope.com. 

Visit Italian Angels at www.italianangels.net. 

Reach out to Luigi at luigi.amati@meta-group.com, on LinkedIn at www.linkedin.com/in/luigiamati/, and on Twitter at www.twitter.com/luigiamati2. 

______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org  

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
For eGuides check out: https://tencapital.group/education/ 
For upcoming Events, check out https://tencapital.group/events/  

For Feedback please contact info@tencapital.group   

Please follow, share, and leave a review.

Music courtesy of Bensound.