Carried interest is a share of the profits that a venture capital firm’s general partners earn

The 'Two and Twenty' structure allows hedge funds and private equity firms to earn significant returns

With this structure, firms charge limited partners or "LPs" a 2% management fee for overseeing the fund (assets under management or AUM) and take 20% of the fund's overall profits (carried interest). Many private credit funds also operate under this structure.

Venture capital is a form of funding provided to early-stage companies with high growth potential, typically in exchange for an equity (or ownership) stake

See the anatomy of a venture capital firm

Venture capital firms get the money they use to invest in companies from limited partners, also called LPs. It’s the general partner’s job to manage that money and invest it in the right startups.

80% of a VC firm's returns come from 20% of the deals, per VC's 'power law'

Early-stage startups are highly risky investments. Many companies in a VC portfolio will not provide any significant return.

Private equity IRR is the internal rate of return on a PE investment or fund

It's typically expressed as an annualized percentage that incorporates both the size and timing of cash flows between investors and the fund. It's the discount rate that makes the net present value of all cash flows equal zero. Many private equity funds target a net IRR in the mid‑teens to low‑20s percent range, with an 8% "hurdle" or preferred return as a minimum before carried interest or "carry" is paid.

Why women are underrepresented in VC

Only about 11% of investing partners at venture capital firms are women, according to Harvard Kennedy School research. What’s more, only about 13% of VC dollars go to startups with a woman on the founding team. To learn more about why women are so often sidelined on both sides of the venture capital equation, click here.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Angel investors often receive significant equity because of the risk they take

Angel investors fund startups at an early stage, at which time a company’s success is less assured. In exchange, they often ask for a significant equity stake.

Dive deep into the numbers that shape each YC deal

Y Combinator invests $500K into each company in any given batch. $125K of that investment converts into a fixed 7% in ownership of the startup, and the other $375K is invested on something called an uncapped MFN safe. YC explains what that means and more terms of the deal in a detailed article on their website

Asia-Pacific's share of global venture capital investment has jumped from 3% to 28% in 20 years

China has driven much of that growth due to its manufacturing power and tech sector. This graphic shows how the share of total venture capital deal value changed around the world between 1997 and 2023.

Companies pay multiple fees as part of the IPO process

When a company decides to approach IPO, it typically hires investment bankers—who earn about 7% of the IPO’s gross proceeds—to help set the organization’s target valuation range and schedule an IPO date. But that isn't the only fee associated with the IPO process.

Compound interest has been called the eighth wonder of the world

That's because it has the near-magical quality of helping financial investments grow exponentially. Rather than accruing a standard lump of simple interest annually, compound interest takes the previous year’s yield and reinvests it as part of the principal.

Credit card companies make money through interest, annual fees, and more

They also profit from interchange fees, the fee the retailer has to pay the credit card network in order to facilitate a transaction. The fee is typically between 1% and 3% of the transaction amount.

Convertible notes represent loans that startups owe investors

In the second part of a two-part series, convertible notes are explained to be a tool angel investors use to ensure they see a return on their investment in a startup.

Retail investors cannot directly invest in private credit funds—but other financial vehicles can offer exposure to the industry

For example, as some US regulations have loosened in recent years, retail investors have begun to get exposure to the private credit market via ETFs that invest in publicly traded financial vehicles with private credit exposure, such as BDCs.

A cost basis is an asset's purchase price after accounting for certain other factors

If you bought a share for $5 and sold it for $140, your capital gain would be $135...on paper, at least. In reality, the math is fuzzier. Capital gains are actually the difference between the sale price of the asset and your cost basis.

The S&P 500 yields a roughly 10.5% average annual return

Tthe factors that go into that calculation are multifaceted—from how inflation impacts it to the stocks themselves. During periods of high inflation, stock performance can be stunted by investor concerns, for instance. The average return also varies based on whether dividends are included.

Why do long-term capital gains get taxed at preferential rates?

The 1920s defined capital gains as “unearned” taxable income—as opposed to “earned” income from jobs—and set into practice preferential tax rates for long-term capital gains that are hotly debated to this day. This historical review explores how voices in favor of preferential rates were arguing on behalf of greater market liquidity and incentive for investment activity. Learn more about the real history of capital gains tax rates here.

Reinvested dividends are not a way to dodge paying capital gains taxes

When an investor holds stock in a company that pays a dividend—a portion of its profits directly returned to shareholders as monthly or quarterly payments—they can choose to hold that dividend in cash, spend it, or reinvest it into more shares of that company’s stock.

Value investing seeks to buy stocks trading below their intrinsic worth

Value investing specifically focuses on fundamentals like earnings, assets, and price-to-earnings ratios. In contrast, growth investing targets companies with rapid future potential, often trading at higher valuations. Both strategies offer unique paths to returns.

Investors need a 'margin account' to short sell stock

Margin accounts are leveraged accounts through brokerage firms that allow investors to make trades without the full amount of capital on hand. Similar to a secured loan, margin accounts often require some form of collateral and typically have a cap on how much investors can borrow. However, trading with a margin account is much riskier than a traditional investment account. Fees and charged interest are due on margin accounts, regardless of trade performance, meaning it's possible for investors to lose more money than just their initial investment.

Shares are parts of a stock that represent ownership of a company

Shares are traded on the stock market. Once you buy a single share of a company, you are considered a shareholder of that company and may have certain rights as a partial owner, such as voting on business decisions.

The total cost of owning an ETF is the sum of the holding costs and the transaction costs

Holding costs include things like the expense ratio, or the annual fee that a fund issuer charges. Transaction costs include things like brokerage commissions, or the fee that a broker charges to enact a trade. However, in recent years, most brokers have essentially eliminated commissions on ETF trading.

Pros and cons of mutual funds

Depending on your personal investment goals and strategy, different funds can carry different risks and rewards for your portfolio. However, there are some pros and cons that stay consistent across funds, like easy portfolio diversification.

Alternative investments carry unique tax implications

The specifics depend on the type of alternative asset, as well as how long you hold it for, and your income.

About 98% of companies offering employees a 401(k) plan match employee contributions

Broadly speaking, an employer 401(k) match means that if you invest money into your 401(k), your employer will put cash in, too. But these programs are often fairly nuanced.

About 30% of financial advisors opted for fixed and indexed annuities in 2023

An infographic that shows the most common types of investments used by financial advisors with their clients in 2023 also found that nine in 10 advisors used ETFs, and three-quarters invested in cash and cash equivalents.

Learn how to read a prospectus, the juicy document that any company must file with the SEC before going public.

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

Warren Buffett's former professor Benjamin Graham is known as the 'father of value investing,' a strategy in which investors seek to buy stocks trading below their intrinsic worth.

Dozens of S&P 500 stocks, including Coca-Cola and Walmart—known as the dividend aristocrats—have increased dividends every year for 25 years

In 2025, four executives from large tech companies were given positions in the US Army Reserves—including Palantir Chief Technology Officer Shyam Sankar, which reinforced Palantir's ties with the US military and its role as a leading defense partner.

A Yale student wrote a profound essay about the consulting industry's influence on elite college students that was published in a book of her writing after she died in a post-graduation car accident.

After 25 people used virtual reality headsets to practice flying with virtual wings—flapping their arms—their visual cortex responded to the wings almost as if they were real arms, treating them as body parts.

Use this calculator to find the dollar value of your mental load, from meal planning to coordinating after-school care for your children.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

Fast-casual restaurant Chili's is experiencing a resurgence, with its parent company recently reporting a nearly 32% increase in sales, thanks to passionate Gen Z fans on TikTok.

How Amazon operates a 'flywheel' business model, a self-reinforcing cycle that drives continuous growth

The American Society of Civil Engineers' infrastructure report card gave the US a C in 2025, its highest grade since the project launched in 1998.

Roughly 43 million US borrowers owe roughly $1.7T in student debt, the second-largest source of consumer debt behind mortgages.

Jimmy Carter signed a 1978 bill that legalized home brewing, a move credited with kick-starting the craft beer industry.

The rivalry between Alexander Hamilton and Thomas Jefferson centered on federalism—the question of how much power the federal government should hold relative to the states.

Track the location of the Voyager probes, currently between 13 and 15 billion miles away from Earth.

Memecoins are a type of cryptocurrency—a form of digital currency with a wide variety of uses—created around popular 'memes,' or viral internet jokes.

Ebola is a filovirus, meaning it resembles a thread under a microscope, though it sometimes twists and can resemble a bowl of spaghetti.

Power lines are dotted with large, brightly colored balls to improve the visibility of these thin wires to helicopters and small planes and help prevent potential crashes.

The American cockroach is actually from Africa, an apparent hitchhiker aboard ships carrying enslaved people, with evidence suggesting the bug may have arrived in the New World as early as the 1600s.

Poison ivy's rash-causing compound is found in the plant's roots, stem, and leaves—so coming into contact with any part of the plant can lead to rashes for the 85% of people who are allergic to it.

Pure water does not conduct electricity because this flow of energy requires the movement of charged particles, and water is a neutral molecule.

44% of Americans say they pray at least once a day—discover how your state's religiosity stacks up against the rest of the country.