Venture Capital Fees Looking A Bit Steep These Days
from the raking-in-the-cash,-playing-golf dept
I had lunch with a friend earlier this week who was telling me about how all the venture capitalists we know are out playing golf, sitting pretty on their huge funds, collecting management fees that keep them comfortable. We both agreed that the limited partners were unlikely to let that keep going on for very long. Apparently, some are starting to make some noises. First things first, they’re not at all happy about the management fees the VCs are charging. As VCs are just sitting on their billion dollar funds, they’re getting a hefty chunk of it, which is supposed to be used for basic things – and not to keep the VCs living the lifestyle they’re now accustomed to. The real money is supposed to come from the carry on any profits, but profits at VC firms are suddenly as elusive as they’ve been at all those dot coms they funded over the past five years. It seems that sooner, rather than later, the limited partners are going to start revolting… It would make sense to give the VCs some incentive to actually do something useful with the billions they’ve raised.