Carried Interest Calculator — Private Equity & VC Carry
Carried interest (carry) is the general partner's share of fund profits above the hurdle rate. Enter the invested capital, exit proceeds, hurdle rate, carry percentage and holding period to see how profits are split between LPs and GPs.
% p.a.
%
years
The general partner's profit share after LPs receive their preferred return
15,000,000
total profitLP preferred return
31.3%
LP share of excess
55%
GP carried interest
13.7%
- 1
LP preferred return
10,000,000 × ((1 + 8%)^5 − 1) = 4,693,281Compounded annual hurdle return LPs must receive before carry kicks in. - 2
Gross fund profit
25,000,000 − 10,000,000 = 15,000,000 - 3
Profit above hurdle
max(0, 15,000,000 − 4,693,281) = 10,306,719 - 4
GP carried interest
10,306,719 × 20% = 2,061,344
How does this calculator work?
GP carry = (Fund profit − Compounded hurdle return) × carry%. LPs get their capital back plus their preferred return first; the GP takes 20% (typically) of any profit above that. With €10m invested, €25m exit, 8% hurdle over 5 years, and 20% carry, the GP receives carry on about €3.7m of excess profit.
Formula
How this is calculated
In a private equity or venture capital fund, limited partners (LPs) commit capital and general partners (GPs) manage it. The economics follow a waterfall: LPs first get their capital back, then their preferred return (a compounded annual hurdle rate — typically 8% per year), and only the remaining profit — the excess — is subject to carried interest. The GP takes the agreed carry percentage (usually 20%) of that excess; the remainder flows back to the LPs.
This calculator compounds the hurdle over the full investment period using the formula: Preferred Return = Capital × ((1 + h)^years − 1). If gross profit is less than or equal to the preferred return, carry is zero — the GP earns nothing above fees. If the fund outperforms the hurdle, the carry base is the excess above it, and GP carry equals that base multiplied by the carry rate.
The model uses the simplest European waterfall (deal-by-deal with a fund-level hurdle, no catch-up provision). Real fund documents often include a GP catch-up clause, clawback provisions, and deal-level hurdles that can meaningfully shift the numbers. Use this calculator as a directional guide and consult fund LPA documents for exact terms.
Frequently asked questions
20% is the standard carry rate in private equity and venture capital — often called "2 and 20" alongside a 2% annual management fee. Some top-tier funds negotiate 25–30%.
If the exit proceeds, after returning capital, do not cover the compounded preferred return, carry is zero. The GP earns no profit share and typically only receives the annual management fee.
A catch-up clause lets the GP receive 100% of profits for a period after the hurdle is cleared, until their overall share reaches the agreed carry percentage. This calculator does not include a catch-up; the carry is applied only to the excess above the hurdle.
Also known as
TG we-Calculate Editorial Team. (2026). Carried Interest Calculator — Private Equity & VC Carry [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/carried-interest-calculator
TG we-Calculate Editorial Team. "Carried Interest Calculator — Private Equity & VC Carry." TG we-Calculate. 2026. https://we-calculate.com/calculator/carried-interest-calculator.
TG we-Calculate Editorial Team, "Carried Interest Calculator — Private Equity & VC Carry," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/carried-interest-calculator
@misc{wecalculate_carried_interest_calculator, title = {Carried Interest Calculator — Private Equity & VC Carry}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/carried-interest-calculator}}, year = {2026}, note = {TG we-Calculate} }
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