2025 Fund Economics Report

Authors:

Hamza Shad, Kevin Dowd

Read time:

16 minutes

Published date:

4 December 2025

The details of how private funds operate have always remained behind the curtain. Now, Carta provides a never-before-seen glimpse at how VC and PE investors manage and operate their funds.

Historically, it’s been difficult to glean much detailed information about the hows, whats, and whys of private fund economics. This is because these funds are, well, private. The public might be aware of how much capital a private fund raises, or what companies it invests in, or even some information about how the fund performs. But many of the details of how private funds operate have remained behind the curtain until now.

With this 2025 Fund Economics Report—the first of its kind—Carta aims to provide a never-before-seen glimpse at some of the latest data on how venture capital and private equity investors manage and operate their funds.

Highlights

• PE fund managers have more skin in the game: In venture capital, the median fund manager makes a GP entity commitment totaling 1.7% of the fund size. In private equity, the median GP entity commitment is 50% higher, at 2.55%.

• Most capital calls are fulfilled on time: Across all recent fund VC vintages, at least 75% of capital calls to LPs are fulfilled at or prior to the given deadline. The longer the notice period given for a capital call, the more likely LPs will wire the capital earlier than requested.

• Venture funds from 2022 are spending more slowly: After nearly four years, the median 2022 vintage VC fund had deployed 67% of its capital. Most other recent vintages had deployed around 80% of their capital at the same threshold in time.

• Management fees and carry rates have remained steady: Across all recent VC vintages, the 2-and-20 fee structure remains the norm, with a median management fee during the investment period of 2% and the median GP taking 20% of a fund’s profits in carried interest.

• Venture funds benefit from economies of scale: The median VC fund between $1 million to $10 million spends about 3.4% of its fund size on operating expenses within the first five years. The median fund larger than $100 million only spends 1% of its fund size on expenses in the same time frame.

Partner commitments

GPs managing smaller venture funds tend to have more skin in the game—measured by the size of their commitment as a percentage of total fund size—than GPs of larger funds. Smaller funds also tend to have a much wider range of common GP commitment sizes.

For instance, the median GP entity commitment on Carta among funds between $1 million and $10 million is 2% of the total fund size, while the 75th percentile for GP commitment is 6.15% of fund size. For funds between $25 million and $100 million, the median GP commitment drops to 1.5% of fund size, while the 75th percentile is 3.3%. At the upper end of the spectrum, there’s even less variability: The median GP commitment at VC funds larger than $250 million is 1.5%, and the 75th percentile is 2.1%.

Private equity fund managers typically have more skin in the game than their peers in venture capital. Across venture funds of all sizes, the median GP entity commitment totals 1.7% of overall fund size. In private equity, the median GP commitment is 50% larger, at 2.55%.

For both VC and PE funds, the sizes of GP commitments follow a right-tailed distribution, with some managers having substantially more skin in the game than the median. But this distribution is wider in PE than in VC. The 75th percentile for skin in the game among PE funds is 5.23%, compared to 3.7% for VC funds.

Capital calls and contributions

After six years (or 24 quarters) of active management, the median venture fund from each of the 2017, 2018, and 2019 vintages had received at least 97% of the capital that was initially committed by LPs. In general, the pace of capital calls follows a roughly similar pattern across all recent vintages. But a few exceptions stand out.

Both the 2020 and 2021 fund vintages had an accelerated rate of capital calls during their first two years of management. This reflects the torrid investing environment of the early 2020s, when VCs were making deals and deploying capital at record rates. The median fund from 2020 and 2021 had already received about 40% of its total committed capital from LPs after six quarters of management, compared to a typical rate of about 30% at the same time for other recent vintages.

Conversely, the median fund in the 2022 vintage has been calling capital at a slower rate than any other recent vintage, with 78% of committed capital received after 15 quarters of management.

Capital deployment

For every fund size and every recent vintage, a large majority of venture investments are still being actively managed. For example, the median fund from 2020 with at least $100 million in commitments has made 25 investments, and 85% of those investments are still active. The median fund from 2023 that’s between $1 million and $10 million in size has made 12 investments, and all of them are still active.

Management fees

The LPs in private funds typically pay management fees to the management company behind the fund. These fees go toward covering the cost of various operational expenses and firm overhead, including salaries for the fund manager, office rent, travel expenses, and more.

Many limited partnership agreements include provisions for reducing over time the annual management fee that LPs pay to fund GPs. These reductions, called step-downs, typically begin after the end of the fund’s investment period. Among VC funds on Carta, the median length of the investment period is five years.

Carry and waterfall

The standard venture fund has historically used a 2-and-20 fee structure, with 2% of total fund size going to management fees and the GP taking 20% of all profits—also known as carried interest, or carry—as a performance fee. That 20% figure for carried interest remains the norm across VC funds of all sizes that have been raised over the past several years. Likewise, a 2% management fee also remains the industry standard.

Operating expenses

The median venture fund between $1 million and $10 million in size spends about 3.4% of its total committed capital on operating expenses during the first five years of the fund’s operations, the typical length of a fund’s investment period. Larger funds, meanwhile, tend to direct a smaller percentage of their total capital toward expenses: For the median fund over $100 million, expenses account for just 1% of capital.

Methodology

Carta helps over 2,500 private equity and venture capital firms administer more than $150 billion in capital. We're setting a new standard in fund administration by sharing insights from our unmatched dataset about the private markets and venture ecosystem to help investors and limited partners make informed decisions and understand market conditions.