Jameson CampAdvising on AI and GTM | 2x Exits

The math is insane

7 Jun 2026 · 2 min

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2:00

In this monologue, Jameson Camp breaks down the economics of a large venture‑capital fund, using a $6 billion example to illustrate the 2% management fee and 20% carried interest model. He shows that a 2% fee yields $120 million per year, or $1.2 billion over a typical ten‑year fund, regardless of performance. He then explores the upside potential of early, low‑valuation investments in mega‑scale companies such as Anthropic, OpenAI, or SpaceX. By assuming a $5 million seed check at a $100 million pre‑money valuation that later exits at a trillion‑dollar valuation (with heavy dilution reducing the stake to a $25 billion equity value), he calculates that the fund’s 20% carry on that single deal would be roughly $5–6 billion. Adding the guaranteed management fees, a successful fund could generate about $6.2 billion in total earnings over its life, highlighting how the fee structure and a few outsized wins can make venture capital an extraordinarily lucrative business model.

Chapters

An old friend of mine is a VC that's done quite well and manages like $6 billion. And I realized through a conversation with him that capital management is the best business model of all time. And let me just explain the math for you very quickly, because on a $6 billion fund, you're taking a 2 and 20, right? So it's a 2% management of the capital fee and then 20% of the profits that you make with the money over a certain hurdle. But That's irrelevant. So just on the 2% management fee on a $6 billion fund, that means that his team takes home $120 million a year, whether they make or lose money, no matter what, on a 10-year fund. So they're going to make $1.2 billion just managing that money. Now imagine you make some bets and some of the bets do really well. Obviously, some of the bets do really poorly. But you were looking at some of these IPOs later this year, like Anthropic and OpenAI and SpaceX. So let's think about how big they are, because it's sort of impossible for the human brain to really comprehend how big they are and what do it mean to have invested in those very early. So an example would be if you put a $5 million check into Anthropic or OpenAI at a $100 million valuation. Now, it'd be relatively early for these, but still $100 million is a big company. At a trillion-dollar IPO, that equity would be worth $50 billion. Now, —there would be more dilution suffered. So with heavy dilution, maybe that equity would be worth $25 billion. So now remember that $6 billion fund, they've made $1.2 billion in managing that money. And now they just made on that one deal, let's say, $25 billion after dilution, which also means that they take 20% of those profits, right? So 20% of that $25 billion would be another $5 $6 billion. So in just that one example, a $6 billion fund, if you're a good fund manager, makes, uh, $6.2 billion over the 10-year lifespan of a fund.