7/25/2019 Venture Capital CH2&3 Assignment

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Venture Capital / Assignments by Rahmati

Name: Rahmatullah Rahmati

ID NO: 1359

Assignment: Chapter 2 ! 3 e"er#ises

2.1 Supposethat 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. !"" fees are paid on committed

capita", and the fund has a ten#year "ife. hat are the "ifetime fees and investment capita" for this fund%

Venture Capital-Problem 2.1Calculations

Year

BaseAmount

FeePercentage Annual Fees

1$2%%&%%%&%%%'%% 2'5%(

$5&%%%&%%%'%%

2

$

2%%&%%%&%%%'%% 2'5%(

$5&%%%&%%%'%%

3$2%%&%%%&%%%'%% 2'5%(

$5&%%%&%%%'%%

)$2%%&%%%&%%%'%% 2'5%(

$5&%%%&%%%'%%

5$2%%&%%%&%%%'%% 2'5%(

$5&%%%&%%%'%%

$2%%&%%%&%%%'%% 2'25%%(

$)&5%%&%%%'%%

*$2%%&%%%&%%%'%% 2'%%%%(

$)&%%%&%%%'%%

+$2%%&%%%&%%%'%% 1'*5%%(

$3&5%%&%%%'%%

9$2%%&%%%&%%%'%% 1'5%%%(

$3&%%%&%%%'%%

1% $2%%&%%%&%%%'%% 1'25%%(

$2&5%%&%%%'%%

,-tal .ees

$42,5,.

,-tal VC $

Ameri#an ni0ersity - Aghanistan/ pring 2%1 Venture Capital Class

7/25/2019 Venture Capital CH2&3 Assignment

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2

Venture Capital / Assignments by Rahmati

.un2,,.

,-talIn0este

$15!,5,.

A##-ring t- my ab-0e 4,able Cal#ulati-ns& ,he -ll-6ings are the result:

1' 7ie time ee -r 1% years 8 42,5, "#2' In0este Capital 8 15!,5, "#

2'2: supp-se that a $ 1 VC un has ees - 2'% per#ent per year in all years&

6ith these ees pai -n #-mmitte #apital in the rst 0e year an -n net

in0este #apital -r year thr-ugh 1%' ;-u #an assume the un is ully

in0este by the beginning - year & then reali