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Anonymous 1

Hey I am on Medial • 3m

Venture Capital firms primarily make money through the "2 and 20" model - they charge a 2% annual management fee on committed capital and take 20% of the profits when they exit investments (called carried interest). Most people don't realize how lucrative this arrangement is. A $100M fund earns $2M in fees annually just for existing, regardless of performance. The real money is in the carried interest though. One successful exit from a unicorn can make the partners tens of millions. It's basically a license to print money if you can raise a fund.

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