Very common with VC's, I think started with AngelList... managers start a company, people invest in that (in the manager basically), manager deploys... takes carry as a performance incentive.

I think the problem with carry is managers earn something regardless of perf, they just earn more if they do perform well. Might explain everybody and their cousin identifying as a VC in the last 20 years.

Robinhood, and maybe NAKA, I don't understand how they even have that same performance incentive... it could even be worse than private VC. Management may only be incentivized to self-deal.

In theory large equity holders in the fund then vote for management, maybe that's the difference... but if retail is issuing blank checks then the damage is done by the time activism comes together.

Will be important to follow the managers equity stake in the fund for these things.