> If LPs can show that a VC is neglecting necessary expenses I didn't say that they were neglecting expenses, only that they spent some of the management fee o

> If LPs can show that a VC is neglecting necessary expenses I didn't say that they were neglecting expenses, only that they spent some of the management fee on things that were not expenses. > fiscal responsibility to use it in the interest of the fund's shareholders I don't think that's true but it's easy to argue that the transaction is in the interests of LPs. > they could take the entire amount with impunity, they'd still be taxed on it as income I suspect, like private equity firms, they net the transactions or use some other tricks to avoid taxes. So I could offer you a rebate on management expenses and in return get 5% of the fund.