A management fee is the fee received by a venture capital firm managing a venture capital fund (a VC fund) from the limited partners (LPs) in the fund – the entity structure for the VC fund is a limited partnership — for the management of the business operations of the VC fund. The fee is paid to the venture capital firm regardless of the performance of the VC fund. In that sense, the payment is guaranteed, and the investors in the fund (the LPs) bear all of the risk of that payment because they pay it, through a portion of their investments in the fund, even if the fund loses money. The limited partner investors are outside wealthy individuals or other entities that are accredited, and able to make such an investment and bear the risk of complete loss of their investment. VC fund investments are extremely risky. The venture capital firm in the limited partnership typically creates an entity to act as the general partner in the limited partnership. That entity receives the management fee. In addition to a management fee, the venture capital firm will also typically takes 20% – 30% of any profits that the VC fund realizes every year. This additional payment is referred to as carried interest or a carry fee.