Ask AI
Log In Sign Up
Go to Fund Economics
Previous Question Next Question
0
Fund Economics

How Does a 2% Management Fee in a 10-Year $10MM Fund Result in $2MM Deduction and $8MM for Investment?

Asked by:
Community Member
1
0
May 03, 2023
Hi everyone! Sorry in advance for the silly question but how come that 'A 2% Management Fee in a 10 year fund of $10 MM totals $2 MM so the fund only has $8 MM to invest'? I thought 2% of 10MM is 200K? This info is from question #6 of the current sprint.
1 answer
0
Community Member
Accepted Answer
May 03, 2023
There are 10 years (usually) of annual Managment Fees, so 10 times 2% is 20%.
Add a comment

Log In or Sign Up

Please Log In, or Sign Up to participate in the discussion.

Log In
or
Sign Up

Apply to VC Lab Cohort 17

Get full access to Decile Base and the Decile Hub venture platform for free by joining the VC Lab program.

Apply to VC Lab Cohort 17
Related Questions
What is the Optimal Way to Display a Single Management Fee Rate on Slides for a 10-Year Fund? 1 May 03, 2023 Is it common to collect a 3% management fee during the investment period and reduce it to 1% afterward, as long as the total over 10 years doesn't exceed the allocation? 0 May 03, 2023 Are the audit and tax fees reasonable for a first-time $10M fund? 0 May 03, 2023 Can We Double Down on a Company Investment Through Fund II if Already Invested in Fund I? 1 May 03, 2023 What is the most common free structure for a fund of funds? 1 Oct 24, 2024