Investment Fees

Every investment on Play Money has an associated fee schedule that determines how much the investor pays in fees. The fee schedule is automatically created when the investment is made, and fees are calculated based on the investment amount and the applicable fee rates.

Fee Types

Platform Fee

The platform fee is Play Money's primary revenue from each investment.

• Default rate: 10% of the investment amount
• Fee cap: $1,500 maximum (regardless of investment size)
• Example: A $5,000 investment would have a $500 platform fee (10%). A $20,000 investment would have a $1,500 platform fee (capped, not $2,000).

The platform fee is calculated in cents for precision and is recalculated automatically whenever the investment amount changes.

Carry (Carried Interest)

Carry is a percentage of the investment's profits that goes to the deal lead or platform.

• Default rate: 20%
• When it applies: Only when the investment generates a return. If the startup exits or pays dividends, carry is taken from the profits.
• Example: If a $5,000 investment returns $15,000 (a $10,000 profit), 20% carry means $2,000 goes to carry and the investor receives $13,000.

Management Fee

An annual fee for managing the SPV.

• Default rate: 0% (most deals don't charge this)
• When it applies: Some deals include a management fee for ongoing SPV administration.

Fee Resolution Sources

The fee rates aren't always the default -- they can come from several sources, listed in priority order:

The system records which source was used (the "resolution source") so admins can always trace why an investment has its particular fee rates.

SPV-Level Fee Defaults

Each SPV has default fee percentages (platform fee, carry, management fee) that apply to new investments. Changing these defaults on the SPV does not retroactively recalculate fees on existing investments -- only new investments created after the change will use the updated rates. To adjust fees on an existing investment, use the Override Fee action on the individual investment.

How Fees Are Calculated

When an investment is created:

1. The system checks for applicable overrides (deal terms, carry credits)
2. Falls back to SPV defaults if no overrides apply
3. Calculates the platform fee in cents: investment_amount × fee_percentage
4. Applies the fee cap ($1,500 max)
5. Records the resolution source

Fee Recalculation

Fees are always automatically recalculated when the investment amount changes (e.g. through an adjustment or increase). The system:

1. Recalculates the platform fee based on the new amount and existing percentage
2. Applies the fee cap
3. Updates the fee schedule record

There is no option to preserve or customize fees during an amount adjustment. If custom fee terms are needed after changing the amount, use the Override Fee action separately (see below).

Fee Handling During Amount Adjustments

When an admin adjusts an investment amount via the Adjust Amount action, fees are always auto-recalculated based on the SPV's fee percentages and the new investment amount. The dialog clearly states this and directs the admin to use "Override Fee" if custom fees are needed afterward.

This simplification means:

• Adjust Amount is purely about changing the dollar amount of the investment
• Override Fee is purely about changing the fee terms (percentage or dollar amount)
• The two actions are independent and can be used in sequence if both need to change

Every amount adjustment is recorded in the audit trail with the reason and the old and new values for both the amount and the fee.

Fee Locking (Preservation)

When a fee is locked, the automatic platform fee recalculation is skipped. This protects both the percentage and the dollar amount from being overwritten on routine saves (e.g., when editing carry or management fee percentages).

What locking preserves:

• Both the percentage and the dollar amount are frozen on normal saves -- automatic fee recalculation is completely skipped.
• When you set a dollar amount via Override Fee, the equivalent percentage is back-calculated and saved alongside it (e.g., $750 on a $10,000 investment stores 7.5% and $750).
• The fee schedule shows "Admin Override" as its resolution source.
• The lock is recorded in the audit trail for transparency.

What locking does NOT protect against:

• Adjust Amount always overrides the lock. When the investment amount changes, the fee is forcibly unlocked and the platform fee is recomputed from the new investment amount multiplied by the stored percentage. The stored percentage survives, but the dollar amount changes proportionally (e.g., if 7.5% was stored and the amount changes to $12,000, the fee becomes $12,000 * 7.5% = $900 -- not $750).
• If you need a specific fee after an amount adjustment, re-apply it using Override Fee afterward.

Practical example:

1. Investment is $10,000, platform fee is 10% ($1,000)
2. Admin overrides to $750 (7.5%), locks the fee
3. Later, admin adjusts the investment to $12,000
4. The fee is unlocked and recalculated: $12,000 * 7.5% = $900
5. To keep it at $750, the admin would need to use Override Fee again after the amount change

What admins should know:

• Fee locking is controlled via the Override Fee action (the "Lock Fee" toggle)
• When overriding by dollar amount, the fee is automatically locked (since a specific dollar figure was chosen)
• When overriding by percentage, locking is optional -- unlocked fees will auto-recalculate on the next save
• Adjust Amount always unlocks and recalculates -- the percentage is preserved but the dollar amount changes with the new investment amount
• If you need both a custom amount and a custom fee, use Adjust Amount first, then Override Fee
• The audit trail records when a fee was locked, who locked it, and why

Overriding Fees from the Admin Panel

Sometimes an investment needs custom fee terms -- for example, a negotiated reduced carry, a waived platform fee, or a specific dollar amount for the platform fee. Admins can override fee terms directly from the investment detail page using the Override Fee button.

What you can change

• Platform fee -- set by either percentage or dollar amount (see below)
• Carry percentage -- the percentage of profits taken as carried interest
• Management fee percentage -- the annual management fee percentage

You can change one, two, or all three fee types at once. Any value you don't change stays at its current value.

Platform fee: percentage vs. dollar amount

The platform fee can be specified in one of two ways (you choose which method to use in the dialog):

Important: When setting by dollar amount, the fee is automatically locked because a specific dollar figure was chosen. When setting by percentage, you can choose whether to lock the fee via the "Lock Fee" toggle. Note that in either case, Adjust Amount will unlock and recalculate the fee based on the stored percentage -- so if the investment amount changes later, the dollar amount will change proportionally. Re-apply Override Fee after an amount adjustment if you need to restore a specific fee.

How to use it

1. Navigate to the investment detail page in admin
2. Click the Override Fee button (indigo/purple button in the action bar)
3. The dialog shows the current fee values and the investment amount for reference
4. Choose the platform fee input method: "Set by percentage (%)" or "Set by dollar amount ($)"
5. Enter the new value in the corresponding field (the field matching your chosen input method is the one that will be used)
6. Optionally adjust carry and management fee percentages
7. Choose whether to lock the fee (see Fee Locking section above)
8. Enter a reason explaining why the fees are being changed
9. Type "override" to confirm

The resolution source is updated to "Admin Override" and the change is recorded in the audit trail with both old and new values.

When fees cannot be changed

Fees cannot be overridden once disbursements have been made from the SPV. Once money has left the SPV account (e.g., wired to the portfolio company), the fee schedule is considered final. The system will show an error if you attempt to override fees after disbursements.

Fees also cannot be overridden for cancelled or refunded investments, since those investments are terminal.

Override Fee vs. Adjust Amount

These two actions serve distinct purposes:

Common workflow: If you need to change both the amount and the fees, first use Adjust Amount to set the new dollar amount (fees will auto-recalculate), then use Override Fee to set the desired custom fee terms.

What Admins Should Know

• Fees are automatic -- you don't need to calculate or enter fees manually. They're determined by the system based on the applicable source.
• Amount changes always recalculate fees -- when you use Adjust Amount, fees are always recalculated based on the new amount and existing percentages. There is no option to preserve fees during an amount change.
• Use Override Fee for custom terms -- if you need a specific fee percentage or dollar amount, use the Override Fee action. You can specify either a % or a $ amount (not both), and the other is calculated automatically.
• Two-step workflow for amount + fee changes -- first Adjust Amount (fees auto-recalculate), then Override Fee if custom terms are needed.
• Check the resolution source -- if an investor's fees look unexpected, check the resolution source to understand why. It might be a carry credit or deal-level override.
• Fee cap protects large investors -- no investor pays more than $1,500 in platform fees, regardless of their investment size. This makes larger investments more attractive.
• Fees are visible in admin -- each investment's fee schedule (platform fee, carry, management fee, and resolution source) is visible on the investment detail page.
• Fees are final after disbursements -- once money has been disbursed from the SPV, fee overrides are no longer allowed.