Operational Costs and Fee Breakdown
The fees we charge are essential for covering operational expenses, including server and network costs, as well as marketing and research efforts to identify lucrative investment opportunities for Citizen Capital.
Our fees comprise two components:
  1. 1.
    10% Haircut Fee: This is integrated into the token price.
  2. 2.
    5% Carried Interest on Profits: This fee is applied only at the conclusion of the investment and is contingent upon generating a profit.
Comparison with Traditional Venture Capital Funds
Traditional venture funds, such as a16z and Sequoia Capital, usually implement a fee structure including a 1-3% annual management fee and a 20% carry-on fund profits. While this 20% carry can incentivize high returns, it also significantly reduces the investors' potential take-home profits.
In contrast, Citizen Capital adopts a simpler, more transparent fee model, ensuring that investors retain a larger portion of the profits from investment liquidations.
Fee Impact on Investment Returns
Under Citizen Capital's structure, the 5% carried interest is only levied on the profit. For example, on an investment profit of $8100 (from an initial $1000 investment), the carried interest would be $405. The investor's total return after fees would be $8595, a notable increase compared to traditional fund structures.