It's easy to dump on the management fee, especially seeing the world through the underfunded entrepreneur's eyes. But the VC fee structure is probably among th

It's easy to dump on the management fee, especially seeing the world through the underfunded entrepreneur's eyes. But the VC fee structure is probably among the most honest and legit setups in all of finance. Look at Private Equity (PE) fees. In addition to whatever the LPs are directly paying, portfolio companies themselves are posting up huge fees back to the PE firm. Plus dividends, director fees, you name it. "Promotes" for putting a deal together with a syndicate. Etc. etc. Look at lending. You've got stated rates but all kinds of extra fees, origination expenses, etc. baked in. When your lender gives you an APR, he is looking at a projected IRR that is way higher, I guarantee. Early stage VCs -- with few exceptions, and those mainly during weird downturn / recap scenarios -- are generally getting plain vanilla convertible preferred stock. No management fees. No origination / finder's fees. No director fees. No promotes. There are, by the way, some mechanisms for dealing with absurd fees (in VC and other asset classes). They're well known, and already practiced by savvy LPs with leverage.