What is “Carry” or “Carried Interest”?

Venture Capital can be complex and in this episode of InvestStream, I explain “carried interest” or “carry” as it’s more commonly known and why it’s important for VCs.

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Carry is discussed often amongst Venture Capitalists and other Private Equity investors but rarely amongst founders of startups. Politicians have talked about how carried interest should be taxed. Why do Venture Capitalists and other fund managers care about carry and what does it really mean? There are always variations but this video is meant as a simple illustration so that people thinking of VC as a career have some understanding of how important carry is to their overall compensation and also for entrepreneurs to understand that a VC’s success, really does ride on the coattails of each startup they invest in.