Funds charged by VC to investors are complicated. Without proper understanding of these fees, investors can see their returns wiped away by fees – or even have to pay more fees when the VC fund loses 90% of the investors’ money. Now, anyone is allowed to sell their services and product for whatever price they see fit – and some can command premium fee structures due to performance and reputation. But, not all fee structures are aligned with everyone’s best interests.
Terence Channon, Managing Director of Salt Mines Advisors, a Registered Investment Advisor focused on financial planning for start-up founders, investors, and team members shares an example of a common private fund fee structure that serves the VC funds more than its investors.
