Promote

Promote — real estate’s term for the GP’s carried interest: the outsized share of profits the deal organizer earns once investors have received their capital back plus a preferred return. A typical shape: 8% preferred to LPs, then profits split 70/30 or 80/20 with the GP’s slice being the promote. It prices the organizer’s work and deal-finding; it also prices your diligence obligation as an LP — the bigger the promote, the better the deal must be before it’s better for you.

First used in: 5.2 · The ten breakthrough patterns