---
title: "What Is Management Fee During Harvest?"
term: "Management Fee During Harvest"
description: "Management fee during harvest is the reduced or re-based fee LPs pay after a fund stops making new investments, while the GP manages portfolio companies toward exit."
date: 2026-07-25T00:00:00.000Z
updated: 2026-07-25T00:00:00.000Z
topics: ["venture-capital"]
source: https://venturecapitaltracker.com/glossary/management-fee-during-harvest
---

# What Is Management Fee During Harvest?

> Management fee during harvest is the reduced or re-based fee LPs pay after a fund stops making new investments, while the GP manages portfolio companies toward exit.

**Management fee during harvest** refers to how a fund's management fee is calculated and collected after the investment period ends, when the GP focuses on exiting existing portfolio companies rather than deploying new capital.

### How it works

Most venture funds define an investment period—often four to five years from first close. During that window, fees commonly run at ~2% of committed capital. When the period expires, the fund enters **harvest** (or wind-down):

- Fee rate may step down (e.g., from 2% to 1.5%)
- Fee basis may shift from committed capital to net invested capital (capital still at work in portfolio companies)
- Some LPAs cap total fee years or tie fees to remaining NAV

Example: a fund called $100M, deployed $90M, and returned $20M from early exits. Harvest fees on invested capital might apply to $70M still deployed—materially less than fees on the full $100M commitment.

Terms are negotiated in the [LPA](/glossary/lpa) at formation. Extensions of fund life may restart or modify harvest fee schedules.

### Why it matters

- **Founders:** Your board member's fund may be in harvest—fewer new investments from that vintage but continued support until your exit or their fund extension.
- **Investors:** Harvest fees affect net IRR for years. Compare step-down mechanics across GPs; some remain expensive relative to remaining work.

### Common mistake

Assuming fees automatically stop when the investment period ends. Most funds continue charging harvest fees until final liquidation unless the LPA specifies a hard termination date.

### Related ideas

See also [management fee](/glossary/management-fee), [investment period](/glossary/investment-period), [fund extension](/glossary/fund-extension), and [distribution](/glossary/distribution).

## FAQ

### What is management fee during harvest in simple terms?

After the fund is done writing new checks, many LP agreements lower the annual fee or charge it only on money still invested in companies—not on the full original commitment. That phase is called harvest.

### Why does management fee during harvest matter?

LPs avoid paying full investment-period fees when the GP's workload shifts to board work and exits. GPs still need budget to support portfolio companies until the last distribution.


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Source: https://venturecapitaltracker.com/glossary/management-fee-during-harvest