Carried Interest, also known as “the Carry” and “the Promote” is typically the return to the managers or general partners of a fund. In the context of a venture capital fund, a typical carried interest is 20% with a catch-up provision. What this means is that once the investors’ capital is returned, plus any preferred returns (usually 8-10%), the fund manager then gets all distributable funds until the total distributions are split 80/20 between the investors and managers. Once this hurdle is cleared, funds are typically distributed 80/20 thereafter, meaning for each dollar distributed $.80 goes to the investors and $.20 goes to the managers. The concept of a carry exists in all kinds of fund structures – private equity, real estate, hedge funds – and can vary greatly.
Who are these people?
With several entrepreneurs in our ranks, we understand what goes into building a business. It’s much more than turning an idea into revenues. It takes preparation, planning, sacrifice, and adaptability. And once you’ve given everything you have, occasionally the tide changes and you have to re-think your entire strategy. With hundreds of successful startups as clients, we thrive on turning an initial consultation into a successful, long-term relationship. So give us a call and let’s get started.