Management fee calculator
Most venture funds charge 2% of committed capital during the investment period, then step down. The step-down is where the total fee load is decided, and it is the term LPs negotiate hardest.
Total fees over the term
$6,875,000
As a share of commitments
13.8%
| Year | Fee basis | Rate | Fee |
|---|---|---|---|
| 1 | $50,000,000 | 2.00% | $1,000,000 |
| 2 | $50,000,000 | 2.00% | $1,000,000 |
| 3 | $50,000,000 | 2.00% | $1,000,000 |
| 4 | $50,000,000 | 2.00% | $1,000,000 |
| 5 | $50,000,000 | 2.00% | $1,000,000 |
| 6 | $41,666,667 | 1.50% | $625,000 |
| 7 | $33,333,333 | 1.50% | $500,000 |
| 8 | $25,000,000 | 1.50% | $375,000 |
| 9 | $16,666,667 | 1.50% | $250,000 |
| 10 | $8,333,333 | 1.50% | $125,000 |
How the arithmetic works
During the investment period the fee is the rate times committed capital. After it, the fee is the step-down rate times the basis you choose: still committed capital, or invested capital net of realisations (we approximate net invested capital as a straight line down to zero by the end of the term). Total fee load is the sum over the fund term. A 2% fee on $50M over ten years with no step-down is $10M, or 20% of commitments. That is the number LPs are looking at when they ask for a step-down.