Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ACME Venture Capital Fund III is considering two different structures for its new $5B fund. Both structures would have management fees of 2 percent per

ACME Venture Capital Fund III is considering two different structures for its new $5B fund. Both structures would have management fees of 2 percent per year (on committed capital) for all 10 years. Under Structure I, the fund would receive an 20% carry with a basis of all committed capital. Under Structure II, the fund would receive a 20% carry with a basis of all investment capital. For a given amount of (total) exit proceeds = $Z, solve for the amount of carried interest under both structures. Which option would you prefer as a GP?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Ontology And Function Of Money The Philosophical Fundamentals Of Monetary Institutions

Authors: Leonidas Zelmanovitz

1st Edition

0739195115,0739195123

More Books

Students also viewed these Finance questions

Question

10. What was the most difficult aspect of your past job?

Answered: 1 week ago