VC Fund Economics
Carry Calculator
Calculate GP carry after hurdle rate, preferred return, and LP capital return.
Fund Terms
GP Split
Carry Distribution
Total GP carry
$8.41M
3.00× fund MOIC · hurdle ✓ met
8% preferred return over 10 years
2.86× LP MOIC
60% split
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
8%
Annual preferred return to LPs before carry kicks in
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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.
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