Metrics & Performance
Basis Point
One hundredth of a percentage point (0.01%), used to describe small changes in financial metrics and fee structures.
Basis Point Conversion
1 basis point = 0.01% = 0.0001
Where
- 1 bp
- = One-hundredth of a percentage point
- 100 bps
- = 1 percentage point
A basis point (bp or bps) is a unit equal to 1/100th of 1%. In venture capital, basis points are used when discussing management fee adjustments, carried interest splits, and return differentials. 100 basis points = 1%.
In Practice
The LP negotiated the management fee down by 25 basis points, from 2.00% to 1.75%, saving $500K annually on a $200M fund.
Why It Matters
Small basis point differences compound significantly over a fund's life. A 50bp fee reduction on a $500M fund saves $25M over 10 years.
VC Beast Take
In venture, people argue over basis points in fees but casually mark up portfolios by billions. The precision is selective.
Related Concepts
Further Reading
Angel Investing Returns: What the Data Actually Shows
A data-driven look at angel investing performance — Kauffman Foundation research, AngelList data, power law dynamics, and the harsh portfolio math most angels never confront.
Startup Equity Compensation Explained: Stock Options, RSUs, and More
ISOs, NSOs, RSUs, restricted stock — startup equity comes in many flavors. Here's what each type actually means for your compensation, your taxes, and your financial future.
The Venture Capital Career Path Explained
From analyst to managing partner: the real timeline, what each level does, how promotions work, and the 'up or out' dynamics that shape VC careers.
The Founder's Guide to Dilution: How Much You'll Actually Own
Walk through a realistic Seed to Series B scenario with real numbers. See exactly how option pools, round sizes, and preferences affect what founders actually take home at exit.
How to Negotiate Your Term Sheet: A Founder's Playbook
A tactical guide to negotiating your startup term sheet — which terms matter most, where to push back, and how to protect your interests without killing the deal.
Anti-Dilution Provisions Explained: What Every Founder Needs to Know
How anti-dilution provisions work in venture capital — full ratchet vs. weighted average, how they affect founder ownership in down rounds, and what to negotiate in your term sheet.
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