4 ms·

Can anyone show an example of what 20% of the carry would look like. I'm a bit unclear how much the advisor gets here and how much AngelList is getting (and wha

• pkaler 13y ago
  Let's say the pre-money valuation of a startup is $4m and they raise $1m. The syndicate would own 20% of the company. Let's say the company exits for $20m. Let's ignore preferred stock and assume it's all common to make the math easier. The syndicate would get $4m. The first $1m would be payed back to the entire syndicate. The lead would get an additional 20% of the $3m or $600k. Then the rest of the $2.4m would be split amongst the syndicate. Read chapter 9 of Venture Deals for more detail.
  • beachstartup 13y ago
    > The first $1m would be payed back to the entire syndicate i'm not an expert but i believe the carry is the portion above and beyond the promised return - in this case, the syndicated invested $1m, the promised return (let's call it 10% a year) would then be $1.1m (let's call it a year of waiting). wouldn't the carry (the "bonus", basically) be 20% of $2.9m? or maybe these deals lack a promised return and define the carry as anything beyond returned principal?