Core Viewpoint - The management fee system in the venture capital industry is undergoing unprecedented structural adjustments, moving away from the traditional "2% management fee + 20% performance fee" model to more diversified and flexible charging schemes [1][2]. Fee Reduction Trend - The management fee has been reduced from 2% to 1.5%, with some government-guided funds even charging as low as 1% in certain regions [3][4]. - Feedback from investment professionals indicates that the downward adjustment of management fees has become a trend, with the traditional "2+20" model being less common [5]. Changes in Charging Methods - The industry is shifting from charging based on committed capital to charging based on actual paid-in capital, with some funds adopting a "project deduction" model where fees are only charged after project approval [7]. - Some funds have introduced a performance extraction mechanism, linking management fees to investment progress and returns, allowing for fee reductions if performance targets are not met [8]. Impact of LP Structure Changes - The structure of limited partners (LPs) has changed, with institutional LP contributions declining for four consecutive years, and government funds now dominating the LP structure [12]. - The shift towards government and state-owned capital as primary LPs has led to a focus on social benefits and audit risks, driving the evolution of management fees towards more diversified and flexible models [13]. Market Dynamics and GP Viability - The reduction in fees has led to a decrease in GP bargaining power, as the market for private equity has contracted significantly [14]. - Larger fund sizes have increased GP tolerance for fee reductions, as even a reduced fee can still cover operational costs [15]. Government Initiatives to Support GP - To enhance GP motivation, government-guided funds have introduced additional clauses such as "profit sharing, relaxed reinvestment standards, and risk compensation" to balance the low fee structure [19]. - Recent government guidelines emphasize the establishment of a fault-tolerant mechanism and a more flexible assessment of fund performance, which could improve GP incentives [20]. Conclusion on Industry Evolution - The venture capital industry is in search of a new balance between GPs and LPs, with recent policies aimed at incentivizing GPs while ensuring accountability and performance alignment [21].