Carried Interest, popularly referred to as Carry, from the investment deals made by a fund. Carried interest comprises the percentage share of profits and is mainly paid after the fund achieves its specified return. Carry is typically charged at 20%. Carry can be considered a form of performance-based earning which is given to the general partners for finding and deciding on the best investment deals.

In this Compass edition, we focus on this sweet spot in venture capital investing and understand some of the loopholes that need to be addressed.