Venture Capital 101: Decision-Making and Economics at a VC

by Jeff Bussgang, Seeing Both Sides | VC Perspectives From A Former Entrepreneur

"So what's the VC business model? Raise a fund, get paid 2.0-2.5% annually in fees to manage that fund, and make investments that you hope will generate capital gains. When those returns are generated, the VC funds typically get 20-25% of "carried interest" or "carry" in the capital gains."