It's 2% per year of typically hundreds of millions of dollars: it pays for VC salaries and maintains office and staff. Their upside comes from investment profit

It's 2% per year of typically hundreds of millions of dollars: it pays for VC salaries and maintains office and staff. Their upside comes from investment profits. They take 2% of the fund per year, whether or not the fund makes money. If it doesn't they may have trouble raising an additional fund but that's a different question. Angel groups have a much different structure (e.g. Band of Angels, Angels Forum) where each individual investor contributes a set amount to a particular investment.