Fees and economics
Carried interest
Also known as Carry
The manager's share of a fund's profits, paid after LPs get their money back plus a preferred return.
Twenty percent is the traditional figure. Carry is the main way GPs are rewarded for performance and it usually only pays once a fund clears the hurdle rate.
Why it matters when you raise
Carry is how your team earns, and how it is shared with people who join later is a question every LP asks.
Related terms