Early homeruns such as these gave the rookie firm an aura that suggested it could do no wrong. And institutional investors stung by a decade of mediocre venture returns were ready to buy the Andreessen Horowitz story. By the time it raised the most recent $1.5 billion fund, Andreessen Horowitz was able to command an almost-unprecedented 30 percent “carry,” according to one of Andreessen Horowitz’s limited partners. (The 30 percent is a maximum on a sliding scale). A venture fund’s “carry,” or “carried interest,” is the share of a fund’s profits the partners get to keep for themselves after they return the initial capital invested, and it is typically only 20 percent. A 30 percent carry is almost obscene. Or rather it would be if the six main partners at Andreessen Horowitz hadn’t recently pledged half of their future venture income to charity. For them, it is not about greed. It is about defying convention.
(via The Andreessen Horowitz Effect | Techonomy)