Carry Calculator: What Is Carried Interest Worth
Carried interest is where venture capital wealth is actually made, yet “how much is carry worth” is a question most people answer with guesses. This carry calculator replaces the guesswork with real waterfall maths: enter fund size, the GP’s carry percentage, an optional hurdle rate and expected fund life, choose deal-by-deal or whole-fund distribution, and the calculator values carry at every fund multiple from 1.5x to 5x. It also answers the two questions every negotiator asks: what is 1% of carry worth at a $3.5M fund versus a $350M fund, and how do GP and LP shares split at each outcome.
How the carry calculator works
Set your fund size and the GP share of profits (20% is standard), then optionally add a hurdle rate and the fund’s expected life in years. Toggle between deal-by-deal and whole-fund waterfalls: whole-fund applies the classic European model — LPs recover capital, then earn the hurdle, then the GP catches up before an 80/20 split; deal-by-deal applies carry to each profitable investment without netting losses. Results show carry value, LP share and the GP/LP split at 1.5x, 2x, 2.5x, 3x, 4x and 5x, with a custom multiple for fine-grained checks.
Fund multiple:
At the selected multiple: fund proceeds –, GP carry –, LP share –
1% of carry is worth – at a $3.5M fund and – at a $350M fund.
GP/LP split of proceeds:
GP
| Multiple | Fund proceeds | GP carry | LP share | GP % of proceeds |
|---|
What the carry calculator tells you
For GPs the output models partnership economics before you set fund terms. For LPs it sanity-checks that the carry percentage is fair for the risk taken. For employees offered equity-like carry, it converts an abstract percentage into dollars you can hold a partner to. The comparison at the bottom is deliberately stark: 1% of carry on a $3.5M fund returning 2x is $35K -- meaningful but small; the same 1% on a $350M fund is $3.5M. Fund size compounds with performance, so early career decisions about which fund to join are worth more than any base salary negotiation. The same thinking applies on the founder side: understand how investors value their share of your company before you price it, starting with our cap table guide and SAFE vs convertible note explainer.
Carry calculator methodology
The whole-fund waterfall follows the standard European model: LPs receive their capital back, then a preferred return at the hurdle rate compounded over fund life, then the GP takes 100% of distributions during the catch-up until the GP has received its agreed percentage of total profits; remaining profits split at the carry percentage. Deal-by-deal follows the American model, charging carry per realised investment with no loss netting and no hurdle. Results exclude management fees, deal-level costs, clawbacks and taxes, which can shift outcomes materially. The European LP/GP framework follows BVCA and Invest Europe reporting conventions, and UK tax treatment of carried interest is set out by HMRC. Benchmarks reflect common Gulf and European fund terms; consult a fund lawyer before finalising an LPA. Founders modelling their own dilution should pair this with MVP cost planning and runway maths.
Frequently asked questions
What is 1% of carry worth?
One per cent of carry equals 1% of a fund's profits. At a $3.5M fund returning 2x, 1% is worth $35K; at a $350M fund at the same multiple it is worth $3.5M. The multiple matters as much as the fund size: 1% at 5x is five times more valuable than 1% at 1x profit.
What is the difference between deal-by-deal and whole-fund carry?
In a deal-by-deal (American) waterfall, the GP takes carry from each profitable investment as it is realised, and losses do not offset those gains. In a whole-fund (European) waterfall, all losses are netted first and the GP is paid only after the fund exceeds its target. Whole-fund favours LPs; deal-by-deal favours GPs.
What is a GP catch-up?
A GP catch-up lets the general partner recover its share of profits before any split with limited partners. After LPs receive their capital and hurdle return, the GP takes 100% of distributions until it has received its agreed percentage of the fund's profits, typically 20%. The remaining profits then split 80/20 in the LPs' favour.
Is carried interest taxed in the Gulf?
Carry is generally taxed as income or capital gain in the UK, the US and Europe, but Gulf jurisdictions such as Bahrain, Dubai and Riyadh do not levy personal income tax, so carry is typically received tax-free there. LP structures still matter: fund profits can be taxable at fund level elsewhere. Always confirm with a local adviser.
Building a fund or taking your first carry allocation? Learn how investors think about early-stage risk in our pitch deck guide, and talk to Valu.vc about pre-seed investment before you launch.