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There is an additional layer to this when a person in question is a founder of a fund. It's not just the carry (and salary) that generates their returns -- they
by hkmurakami 9y ago
There is an additional layer to this when a person in question is a founder of a fund. It's not just the carry (and salary) that generates their returns -- they also own equity in the organization itself (thus the founders of a fund like KPCB will be orders of magnitude more weathy than other concurrent GPs, as evidenced by the famous exploits of Tom Perkins).
However, whether a forced sale of a founder's equity share of the investing organization is warranted or not is a darker shade of gray than the divestiture of one's carried interest. Certainly there must have been examples in the past in various private investment funds where a founder is forced to relinquish one's ownership (due to fraud, etc.); I wonder where we deem this line to be drawn in the sand.
- pbiggar 9y agoI'd love to hear more on this. Can you describe the structures in more detail? I wouldn't have expected the org itself to be anything except a shell around each successive fund. (Maybe I shouldn't have skipped this part of Venture Deals)