If a Venture Capital fund with $10 million committed capital, charges 2.5% management fee per year for 10 years, and 20 percent (20%) carried interest with a basis of committed capital. If the fund earns a 2 times return on its investment. What is the IRR for Limited Partners if General Partners need to return committed capital before sharing the profit?

If a Venture Capital fund with $10 million committed capital, charges 2.5% management fee per year for 10 years, and 20 percent (20%) carried interest with a basis of committed capital. If the fund earns a 2 times return on its investment. What is the IRR for Limited Partners if General Partners need to return committed capital before sharing the profit?

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter12: Professional Venture Capital

Section: Chapter Questions

Problem 14DQ

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