However the median blended fee is still exactly 2% - the average was pulled down by some GPs reducing annual fees a little more, a little faster. The average blended management fee is 1.93%, down from the 2.04% we reported in 2018. Management Fees are mostly steady, with blended rates trending down slightly For an explanation of each term or our methodology, please see the report. We’ll continue to monitor the state of terms as we proceed through 2021, and we plan to release a full updated report once it’s warranted. ( For a broader take, read our analysis on VC trends of the last decade.) The article examines a subset of trends and terms from the original report that are worth discussing now. For that reason we’re publishing this update as an article, rather than a full report. ![]() There certainly has been some change in the state of terms, but it’s mostly been modest. The short answer is, not really and not yet. Would LPs request different protections in light of volatile public markets? Would the bulk of the venture industry adjust their terms due to the monopolization of capital by mega funds in 2020? Would we see a rapid change of any kind? Given the chaos of 2020, we were curious to see whether GPs would adjust their terms in response. The long timelines to prove fund performance paired with episodic fundraising, and the extended and perpetual time horizons of many institutional LPs, can lead to similarly gradual changes in LP agreements. Venture capital, like other private market investment strategies, tends to evolve slowly. We’ve continued to monitor the state of terms in venture capital since. ![]() ![]() Since then, the report has been downloaded thousands of times by GPs and LPs around the world. The report was a watershed moment of transparency for the industry, helping shed light on the opaque world of GP LP relations. An update to our 2018 State of Terms Report: LP minimums, hurdle rates, average management fees, portfolio construction, and moreĪ little over two years ago, we published our State of Terms report, benchmarking a series of terms and trends in the venture capital industry.
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