VC Fund Economics
Fund Economics Simulator
Model the complete economics of a VC fund — management fees, carry waterfall, J-curve, LP returns, and GP compensation across the full fund lifecycle.
Fund Terms
Portfolio Assumptions
Fund Summary
GP Economics
- Management Fees (total)
- $7.10M
- Carried Interest
- $0
- GP Commit Return
- $719K
- Total GP Compensation
- $7.82M
- Hurdle Met?
- No ($107.95M required)
LP Economics
- LP Commitment
- $49.50M
- Total Distributions
- $71.89M
- Less: GP Carry
- -$0
- Net to LP
- $71.89M
- LP Profit
- $22.39M
J-Curve — Net LP Position by Year
Year-by-Year Cash Flows
| Year | Mgmt Fee | Called | Deployed | Portfolio | Distributions | TVPI | DPI |
|---|---|---|---|---|---|---|---|
| Y1 | $1.00M | $8.00M | $7.00M | $8.03M | — | 1.00x | 0.00x |
| Y2 | $1.00M | $8.00M | $7.00M | $17.24M | — | 1.08x | 0.00x |
| Y3 | $1.00M | $8.00M | $7.00M | $27.81M | — | 1.16x | 0.00x |
| Y4 | $1.00M | $8.00M | $7.00M | $33.95M | $5.99M | 1.25x | 0.19x |
| Y5 | $1.00M | $8.00M | $7.00M | $37.58M | $9.39M | 1.32x | 0.38x |
| Y6 | $700K | $700K | $0 | $32.33M | $10.78M | 1.44x | 0.64x |
| Y7 | $560K | $560K | $0 | $25.96M | $11.13M | 1.53x | 0.90x |
| Y8 | $420K | $420K | $0 | $19.36M | $10.43M | 1.61x | 1.14x |
| Y9 | $280K | $280K | $0 | $13.33M | $8.88M | 1.67x | 1.35x |
| Y10 | $140K | $140K | $0 | $0 | $15.29M | 1.71x | 1.71x |
How to Use This Tool
Enter your fund terms (size, fees, carry, hurdle rate) and portfolio assumptions (target MOIC, deployment pace, exit timing). The simulator calculates year-by-year cash flows, J-curve dynamics, and the split between GP and LP returns.
Why This Matters
Understanding fund economics is essential for GPs pitching LPs, for LPs evaluating fund commitments, and for anyone building a career in venture capital. This model shows how fees, carry, and portfolio performance interact over a fund's full lifecycle.
Understanding the J-Curve
The J-curve shows the typical pattern of LP returns over a fund's life. In early years, LPs are net negative (paying fees + capital calls with no exits). Returns dip before recovering as portfolio companies exit.
GP Economics: Fees + Carry
GPs earn management fees (typically 2% annually) to operate the fund, plus carried interest (typically 20%) on profits above the hurdle rate. Fees are charged on committed capital during the investment period, then on invested capital after.
Key Metrics: TVPI, DPI, IRR
TVPI measures total value relative to capital called. DPI measures actual cash returned. IRR measures annualized returns accounting for the timing of cash flows.
Frequently Asked Questions
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