The fees for any Regulation D/S offering are described within the Offering Memorandum. They are typically as follows:
Placement Fee: 5% of capital contribution paid upon closing
The placement fee is charged when the raise has successfully closed, which means it is taken upfront out of the investment amount. It is a one-time fee. This fee is to reimburse the Placement Agent for acquiring and selling the units.
Management Fee: 0.50% of the invested amount annually
The management fee is charged annually for each year until there is an exit event. Two years of management fees are charged upfront, and any management fees that accrue annually afterward are not charged until there is a distribution.
Carried Interest: 10% of profit after the initial capital contribution is returned
This one-time fee is not applied until there is a liquidity event. Once the initial capital has been returned to the investor, any remaining proceeds (if any) shall be distributed 90% to the investor and 10% to MicroVentures.
Offering Costs: 1.5% of capital contribution paid upon closing
This fee is charged upfront when the offering is initially finalized. It is a one-time fee. This fee covers the costs related to establishing, regulating, and reporting for the offering.