VC Fund Economics

Carry Calculator

Calculate GP carry after hurdle rate, preferred return, and LP capital return.

Fund Terms

Fund size (LP + GP)

Total distributions

Carry %

Hurdle rate %

Fund life (years)

GP commitment %

GP Split

Number of GPs

GP 1 carry split

% (GP 2: 40%)

Carry Distribution

Total GP carry

$8.41M

3.00× fund MOIC · hurdle ✓ met

Hurdle threshold$107.95M

8% preferred return over 10 years

Profit above hurdle$42.05M

LP distributions$141.59M

2.86× LP MOIC

GP total carry$8.41M

GP 1 carry$5.05M

60% split

GP 2 carry$3.36M

40% split

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How to Use This Tool

Enter your fund size, total distributions, hurdle rate, and carry percentage. The calculator shows how profits split between the GP (you) and LPs after the preferred return is met.

Carry Calculation

Carry = (Total Profits - Hurdle Return) × Carry %

If your $50,000,000 fund returns $150,000,000, the profit is $100,000,000. After the 8% hurdle (about $40,000,000 over the fund life), carry is 20% of the remaining $60,000,000 = $12,000,000 to the GP.

Why This Matters

Carried interest is how VCs build real wealth. Management fees cover operating costs, but carry is the upside. For a $50,000,000 fund that returns 3x, the GP's 20% carry can be worth $20,000,000+. Understanding carry mechanics is essential for structuring your fund and communicating economics to LPs.

Industry Benchmarks

Standard Carry

20%

Industry standard for most funds

Emerging Manager Carry

15–20%

First-time funds sometimes offer reduced carry

Common Hurdle Rate

Annual preferred return to LPs before carry kicks in

Learn More

→How VC Fund Economics Work: 2 and 20 Explained →How Venture Capital Firms Actually Make Money

Frequently Asked Questions

What is carried interest in venture capital?

Carried interest (carry) is the share of profits that a GP earns from a fund's investments, typically 20% of profits above the hurdle rate. It's the primary way VCs build wealth beyond management fees.

What is a typical carry rate for VC funds?

The industry standard is 20% carried interest, though first-time fund managers sometimes offer 15-20% to attract LPs. Top-performing established funds may negotiate higher carry.

What is a hurdle rate in carry calculations?

The hurdle rate (preferred return) is the minimum annual return LPs must receive before the GP earns any carry. The standard hurdle is 8% per year, compounded annually over the fund life.

How is carry split between multiple GPs?

Carry is typically split based on the partnership agreement. Common splits are 50/50 or 60/40 between founding partners, though the exact split depends on each GP's contribution, deal sourcing, and seniority.