I'm not sure if you know but all of this has been tried or is currently how it works.
To begin with, most GP's have north of 5% of their net worth in the Funds or they're leveraged and borrowing against their homes etc. Partners usually are paying 30ish of their take home into funds.
Individual investments on a single deal are called an "American Waterfall" Vs a "European Waterfall," which is the whole fund. Each incentivization structure provides remarkably different issues. neither is perfect. BOth are prevalent in the market today.
Flat cost structure funds exist as well. Also, remember all fees are just added to the costs the fund needs to return. So VCs are incentivized to keep them low, they many don't do this.
To begin with, most GP's have north of 5% of their net worth in the Funds or they're leveraged and borrowing against their homes etc. Partners usually are paying 30ish of their take home into funds.
Individual investments on a single deal are called an "American Waterfall" Vs a "European Waterfall," which is the whole fund. Each incentivization structure provides remarkably different issues. neither is perfect. BOth are prevalent in the market today.
Flat cost structure funds exist as well. Also, remember all fees are just added to the costs the fund needs to return. So VCs are incentivized to keep them low, they many don't do this.