Why was 20% chosen for the performance fee?

A Two and twenty (or "2 and 20") is a fee arrangement that is standard in the hedge fund industry and is also common in venture capital and private equity.  Hedge fund management companies typically charge clients both a management and a performance fee. "Two" means 2% of assets under management (AUM), and refers to the annual management fee charged by the hedge fund for managing assets. "Twenty" refers to the standard performance or incentive fee of 20% of profits made by the fund above a certain predefined benchmark.

As mentioned above we do not charge a management fee.

Second, we take this performance fee and split it with our clients when they refer other clients.  This rewards program allows clients to compound their investment and enables us to grow based on word of mouth and the merit of our service.