3 ms·
My guess is the management fee is part of the salary cap, but the capital gain it is converted into is not. Thus he pays himself the $250,000 + capital gains in
by ambentzen 9y ago
My guess is the management fee is part of the salary cap, but the capital gain it is converted into is not. Thus he pays himself the $250,000 + capital gains instead of management fees + salary up to a grand total of $250,000.
- owens99 9y agoSo he used money from the management fee to get himself extra carry? I'd assume that the carry would have to be evenly distributed to all the partners. Also, if he's able to get superior returns without spending his management fee, what's wrong with reinvesting the unspent money into the carry to benefit the partners (as long as it's equally distributed)?
- lostboys67 9y agoyes that's my understanding of how partnerships work unless VC funds are not "partnerships" in the way a law firm is