Carried Interest

The portion of any gains realized by a fund or venture capitalist to which their managers are entitled, generally without having to contribute capital to the fund. In the venture capital industry carried interest payments are customary, in order to create a significant economic incentive for venture capital fund managers to achieve capital gains.Also, shares or an option on shares taken by a venture capitalist in an investee company as part of the financing agreement. Usually the stake taken is 20%.