Leads choose the amount of carry they take on a per deal basis. Carry represents the percentage of profits that will go to the lead.
Let's look at an example:
- Lead is charging 20% carry
- You invest $5000
- The company has a successful exit, and your distribution is worth $100,000
The lead will receive 20% of the amount you earned ($100,000-$5000), which is 20% of $95,000 or $19,000. You will receive your initial investment ($5000) plus the remainder of the earnings ($76,000), which nets out to $91,000.