Fund Economics Calculator
Understand how VC fund economics work. Model management fees, carried interest, and LP returns to see the math behind every investment decision.
Fund Parameters
Total Mgmt Fees
$20.0M
Over 10 years
Deployable Capital
$80.0M
80% of fund
Break-Even Multiple
1.25x
Minimum to return LP capital
Per Investment
$3.2M
Avg. deployable per deal
Annual Mgmt Fee Revenue
$2.0M
GP annual operating budget from this fund
Return Scenarios
| Multiple | Gross Return | LP Gets | GP Carry | LP Net Multiple |
|---|---|---|---|---|
| 1x | $80.0M | $80.0M | $0 | 0.80x |
| 2x | $160.0M | $148.0M | $12.0M | 1.48x |
| 3x | $240.0M | $212.0M | $28.0M | 2.12x |
| 5x | $400.0M | $340.0M | $60.0M | 3.40x |
| 10x | $800.0M | $660.0M | $140.0M | 6.60x |
The Math Behind VC Pressure
A $100.0M fund needs $240.0M in exits to return 3x to LPs. With 25 investments, that means the fund needs an average exit of $9.6M per company. In practice, 1-2 breakout winners drive the majority of returns (power law), meaning most investments can fail and the fund still succeeds -- if the winners win big enough.
Capital Waterfall (3x Scenario)
Why VCs Need Outlier Returns
In a typical fund with 25 investments, the math works roughly like this:
~10
Fail (0x)
~8
Return capital (1x)
~5
Modest return (2-5x)
~3
Home run (10x+)
This is why VCs swing for the fences. If a VC does not believe your company can return the entire fund, they will likely pass -- even if the company is solid. A $100.0M fund needs at least one investment to return $300.0M for a 3x fund outcome to make economic sense. This is the power law at work.