The Two and 20 Structure of a Venture Capital Firm

The two and 20 structure is really a way of thinking about how the capital is divided between what is fueled into the companies themselves versus the operating costs of the venture capital firm. So 80% of any return, and this is a traditional model, and our fund follows this model too, but any return that comes from an exit, 80% of that money goes back to our own investors,. And that explains the 20, which means 20% of any profit is held by the firm.