To be honest, this case really hits home.

In four years, BTC doubled, top seed round projects went up 75x, but the $100,000 invested in a certain well-known crypto fund ended up as just $56,000. Why? The fee structure is a killer.

This fund charges a 3% management fee plus a 30% performance fee, which is even harsher than the traditional hedge fund model of 2% + 20%. The 3% management fee alone eats up $12,000 over four years—almost 12% of the principal gone just like that. The problem is—the market was insanely bullish, yet the fund still underperformed Bitcoin.

There are two main reasons: first, the fund pool is too big, forcing them to invest in a bunch of mediocre projects and dilute returns; second, the allocation strategy is weak—they’re sitting on a goldmine but just can’t dig it out.

This highlights a trend—LPs are no longer willing to pay high fees, especially if all they get in return is underperformance. Industry insiders are also starting to question whether the “big fund model” can actually find good projects.

In other words, a fee black hole + poor execution = even the best bull market is wasted. For the next round of fundraising, investors will definitely be more scrutinizing when it comes to fee structure.