Item 5. Fees and Compensation
The Adviser receives Management Fees (defined below) from the Funds, and affiliates of the
Adviser that serve as general partner to a Fund may receive Incentive Allocations or Carried
Interest (each as defined in Item 6, below) from such Funds, as applicable. Management Fees,
Incentive Allocations and Carried Interest paid by a Fund are borne by investors in that Fund.
A Fund and/or its portfolio companies may also make other payments to the Adviser or its
affiliates for services provided to the portfolio companies, which, in certain circumstances, may
reduce the Management Fees payable to the Adviser. Additionally, consistent with each Fund’s
Organizational Documents, the Funds bear certain out-of-pocket expenses incurred by the
Adviser in connection with the services provided to the Funds and/or their portfolio companies.
Further details about such fees and expenses are set forth below.
Management Fees
As compensation for investment advisory services rendered to a Fund, the Adviser receives an
For purposes of RAUM, the Adviser includes the Digital Assets it manages in the RAUM it reports; however, this
should not be interpreted as an indication that the Adviser believes that such Digital Assets are securities.
advisory fee (a “Management Fee”). For Multicoin’s hedge fund style Fund, Multicoin Capital
Master Fund, LP (together with its feeder funds, the “Hedge Fund”), the Management Fee is
charged monthly in advance and is calculated based on each investor’s capital account balance.
For Multicoin’s private equity and venture capital style Funds, the Management Fee is charged
quarterly in advance and is calculated pursuant to each Fund’s Organizational Documents, but is
generally based on each investor’s committed capital. For certain private equity and venture
capital style Funds, the Management Fee is based on contributed capital and the uncalled portion
of the committed capital to the Fund, and after a certain time period may be based on the Fund’s
aggregate original cost of all Portfolio Assets, minus the Fund’s cost of all Realized Portfolio
Assets, calculated as of the end of the preceding fiscal quarter (fees charged may be offset
pursuant to the Fund’s Organizational Documents). Management Fees paid by a Fund may also
be reduced by other fees or compensation received by the Adviser or its affiliates that relate to
such Fund’s activities and investments or by other expenses borne by such Fund as described in
more detail below. As a general matter, a redeeming Hedge Fund investor that is charged fees in
advance would not require a refund of a fee paid in advance since they would exit the Fund at the
end of a quarter, which will always coincide with the last day covered by an advanced fee
payment – meaning Multicoin would have earned the fee paid in advance by the time the
investor fully exits the Fund. However, in the event Multicoin (1) exercises its discretion to
terminate an investor from a Fund intra-fee cycle or (2) liquidates a Fund intra-fee cycle, then
Multicoin would remit to the applicable investor(s) any Management Fees paid in advance for
each day that Multicoin did not provide investment advisory services.
For all Funds, the Management Fee is deducted directly from the investors’ capital accounts. The
precise amount of, and the manner and calculation of, the Management Fees for each Fund are
set forth in each Fund’s Organizational Documents, which are received by each investor prior to
investment in a Fund. The fee structures described may be negotiated and/or modified from time
to time. In general, the Hedge Fund charges a 2% Management Fee and a 20% Incentive
Allocation, whereas the private equity and venture capital style Funds charge up to a 2.5%
Management Fee and either a fixed or variable Carried Interest, in each case as set forth in the
applicable Fund’s Organizational Documents.
The Adviser, in its sole discretion, may waive or reduce the Management Fees, Incentive
Allocation or Carried Interest (as applicable) of investors in the Funds that are employees of the
Adviser or its personnel (including any related entity established by any of the foregoing, such as
trusts, charitable programs, endowments or related programs, family investment vehicles and
other estate planning vehicles) (collectively, “Adviser Investors”). The waiver or reduction of
Management Fees, Incentive Allocation or Carried Interest for Adviser Investors will not impact
the pro rata allocation of Fund expenses.
In addition, the Adviser and its affiliates may, from time to time, earn fees and other income,
including in-kind payments of Digital Assets, from services provided or related to Fund
investments or in connection with investments or prospective investments, such as advisory fees,
transaction fees, directors' fees or any similar fees (collectively, “Other Fees”). To the extent the
Adviser and/or its affiliates do receive Other Fees, the Management Fees paid by the Funds will
generally be reduced by the full amount of such Other Fees. The amount and manner of the
foregoing reductions are set forth in the Organizational Documents of each Fund. Generally, the
amount of such Other Fees will not (except in connection with the reductions described herein)
be disclosed to investors in the Funds.
Incentive Allocation and Carried Interest Payments
Please see Item 6 below regarding Incentive Allocation or Carried Interest that the Funds pay
depending on the terms of the applicable Organizational Documents.
Expenses
Adviser Expenses
To the extent provided in the Organizational Documents of a Fund, the Adviser bears certain
expenses and costs associated with the performance of its services, including expenses related to
the Adviser’s overhead, if applicable, such as office space and utilities, and secretarial, clerical
and other personnel, except those referenced below in “Fund Expenses.”
Fund Expenses
...