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    Venture Capital CH2&3 Assignment

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    Rahmati Rahmatullah
    - A $200M venture capital fund has management fees of 2.5% for the first 5 years, decreasing by 0.25% each subsequent year. Fees are paid on committed capital. - The lifetime fees for the fund over its 10-year life are $42.5M. The remaining investment capital is $157.5M. - A $1B venture capital fund has fees of 2% each year. For the first 5 years, fees are paid on committed capital. For years 6-10, fees are paid on net invested capital. Assuming the fund is fully invested by year 6 and realizes 20% of investments each subsequent year, the lifetime fees and investment capital would be calculated.

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    Venture Capital CH2&3 Assignment

    Uploaded by

    Rahmati Rahmatullah
    523 views2 pages
    - A $200M venture capital fund has management fees of 2.5% for the first 5 years, decreasing by 0.25% each subsequent year. Fees are paid on committed capital. - The lifetime fees for the fund over its 10-year life are $42.5M. The remaining investment capital is $157.5M. - A $1B venture capital fund has fees of 2% each year. For the first 5 years, fees are paid on committed capital. For years 6-10, fees are paid on net invested capital. Assuming the fund is fully invested by year 6 and realizes 20% of investments each subsequent year, the lifetime fees and investment capital would be calculated.

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    Venture Capital CH2&3 End of Chapters SOlution

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    - A $200M venture capital fund has management fees of 2.5% for the first 5 years, decreasing by 0.25% each subsequent year. Fees are paid on committed capital. - The lifetime fees for the fund over its 10-year life are $42.5M. The remaining investment capital is $157.5M. - A $1B venture capital fund has fees of 2% each year. For the first 5 years, fees are paid on committed capital. For years 6-10, fees are paid on net invested capital. Assuming the fund is fully invested by year 6 and realizes 20% of investments each subsequent year, the lifetime fees and investment capital would be calculated.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    523 views2 pages

    Venture Capital CH2&3 Assignment

    Uploaded by

    Rahmati Rahmatullah
    - A $200M venture capital fund has management fees of 2.5% for the first 5 years, decreasing by 0.25% each subsequent year. Fees are paid on committed capital. - The lifetime fees for the fund over its 10-year life are $42.5M. The remaining investment capital is $157.5M. - A $1B venture capital fund has fees of 2% each year. For the first 5 years, fees are paid on committed capital. For years 6-10, fees are paid on net invested capital. Assuming the fund is fully invested by year 6 and realizes 20% of investments each subsequent year, the lifetime fees and investment capital would be calculated.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    2

    Venture Capital / Assignments by Rahmati


    Name: Rahmatullah Rahmati
    ID NO: 13596
    Assignment: Chapter 2 & 3 exercises
    2.1 Suppose that a $200M VC fund has a management fee of 2.5 percent per year for the first five years,
    with a reduction of 0.25 percent (25 basis points) in each year thereafter. All fees are paid on committed
    capital, and the fund has a ten-year life. What are the lifetime fees and investment capital for this fund?

    Venture Capital-Problem 2.1


    Calculations
    Ye
    ar
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10

    Base
    Amount
    $
    200,000,000.
    00
    $
    200,000,000.
    00
    $
    200,000,000.
    00
    $
    200,000,000.
    00
    $
    200,000,000.
    00
    $
    200,000,000.
    00
    $
    200,000,000.
    00
    $
    200,000,000.
    00
    $
    200,000,000.
    00
    $
    200,000,000.
    00

    Fee
    Percentag
    e

    Annual Fees

    $
    2.50% 5,000,000.00
    $
    2.50% 5,000,000.00
    $
    2.50% 5,000,000.00
    $
    2.50% 5,000,000.00
    $
    2.50% 5,000,000.00
    $
    2.2500% 4,500,000.00
    $
    2.0000% 4,000,000.00
    $
    1.7500% 3,500,000.00
    $
    1.5000% 3,000,000.00
    $
    1.2500% 2,500,000.00
    $
    42,500,000.0
    Total Fees
    0
    Total VC
    $

    American University of Afghanistan/ Spring 2016 Venture Capital Class

    Venture Capital / Assignments by Rahmati


    Fund
    Total
    Invested

    200,000,000.
    00
    $
    157,500,000.
    00

    According to my above (Table) Calculations, The followings are the result:


    1. Life time fee for 10 years = 42,500,000 USD
    2. Invested Capital
    = 157,500,000 USD

    2.2: suppose that a $ 1B VC fund has fees of 2.0 percent per year in all years,
    with these fees paid on committed capital in the first five year and on net
    invested capital for year 6 through 10. You can assume the fund is fully
    invested by the beginning of year 6, then realizes 20 percent of its
    investment capital in each of the following five years. What the lifetime fees
    and investment capital for this fund?

    3.1 The Bigco pension plan invested in dozens of VC funds. The director of pension
    plan is preparing his annual report the Bigco board of directors. Summary
    information for Bigcos VC portfolio is given in exhibit 3.9

    American University of Afghanistan/ Spring 2016 Venture Capital Class

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