I worked in hedge funds, even there the management fee (2%) covers the fixed costs (legal, trading operations, treasury, IT operations, etc.) whereas the performance fee (20%) incentivises the alpha.
In VC it's even worse, because at least hedge funds are liquid. VC investments don't realize their value for 5-10 years! Are they supposed to work for free for 10 years? Even the support staff?
Why not just be upfront with a fixed dollar value per year of fees for that part?
Therefore, the more money you are managing, the higher your trading costs. (i.e those costs are "fixed" but its a "fixed percentage" rather than a static number.)
Calculating your trading costs (and usually more importantly slippage) is absolutely table stakes for a fund that trades.
For most funds that’s relatively easy as the trading component is a cost center that you can outsource for predictable prices.
For funds that aren’t treating trades as cost centers, well it’s presumably part of what you are selling so you better be good at it.
If they knew where the alpha was, they would go get it.
If they could make alpha happen, they would do that.
Efficient markets.