Content area
Full text
Venture capital funds are usually partnerships run by general partners for themselves and limited partner investors. Investors must typically commit a minimum of $1 to $10 million, to be drawn as needed over several years. The investment is usually locked up in the partnership's private equity investments for up to 10 or 12 years. Funds commonly charge 2.0 percent to 2.5 percent annually plus certain expenses. In addition, if the fund earns at least eight to 10 percent annually (its preferred return,) the general partner receives 20 percent to 25 percent of all profits on realization.