carry

Definition

Short for 'carried interest'—the percentage of fund profits that goes to VCs as performance compensation, typically 20%. It's why venture capitalists drive Teslas even when most of their portfolio is worthless.

Example Usage

As a junior partner, she received 5% of the carry on deals she sourced, which would be life-changing money if any of them actually exited.

Origin

Abbreviated from 'carried interest,' a medieval term from merchant ship profit-sharing arrangements

Fun Fact

Despite being taxed as capital gains rather than income—a controversial tax treatment—most VCs never actually see carry because their funds don't return enough to clear the hurdle rate.

Source: Venture capital fund economics

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