Generally speaking, venture capital companies will get two kinds of returns every time they raise funds: one is to extract a part of the final profit of the investment, usually 20%, which is called "incidental income". Then there are a series of expenses, which are used to maintain the normal operation of the company, because venture capital companies need some financial support before the investment effect appears, and the expenses are usually 2% to 2.5% of the total management funds collected every year.
What many people (including many investors) don't know is that in fact, after venture capital started to operate, these funds were transferred to the accounts of many legal entities, that is, fund management companies. Fund management companies manage the operation of funds and decide many aspects of their work-salary setting and payment of employees, rent expenses, travel reimbursement, legal counsel and other expenses, and the process of hiring and firing employees. They have franchise rights. These fund management companies are the actual controllers of funds. Venture capital companies give the franchise to a few fund management companies, which are usually composed of a few people, and their financial situation is confidential, but their decision-making influence is very great, so they are called "chief partners".