The portion of any profits realized by a venture capital fund to which the fund managers are entitled, in addition to any returns generated by capital invested by the fund managers Carried interest payments are customary in the venture capital industry Also known as "the carry "
A fractional working interest in an oil and gas lease that comes about through an arrangement between co-owners of a working interest
A share in the profits of a venture capital fund in ratios disproportionate to the capital contributed A company will have to give investors their cash back first and then share in profits with the investors (difference between "independent" fund formed by individuals and bank or other institution fund is that a carried interest is often the "raison d'etre" of the fund but in the institutional setting the venture capitalist often has to negotiate a bonus compensation system which often is not compatible with the rest of the institution)
The portion of any gains realized by the fund to which the fund managers are entitled, generally without having to contribute capital to the fund Carried interest payments are customary in the venture capital industry, in order to create a significant economic incentive for venture capital fund managers to achieve capital gains
The general partners share of the profits generated through a private equity fund The carried interest, rather than the management fee, is designed to be the general partners chief incentive to strong performance A 20 percent carried interest meaning that the remaining 80 percent reverts to the limited partners has been the industry norm, although some firms now take 25 percent or even 30 percent, based on very strong performance on past funds