1.5 and 20 against 2 and 20. Which one am I actually being paid for?

The two structures aren't comparable at the headline level and no amount of staring at the percentages fixes that. Fund A's whole-fund waterfall means the sponsor is paid on the aggregate result, so a bad deal reduces their carry. Fund B's deal-by-deal means each success pays out on its own timeline.

One test that cuts through it: ask both sponsors to show you the fee load as a percentage of total LP contributions over the life of the fund, and ask B specifically to model a case where two of eight projects return capital only. Their willingness to run that scenario for you tells you more than the answer does.

On splitting, $100k into each means you're at the minimum in both, which usually means no information rights beyond the standard reporting and no seat at any LP advisory committee. Sometimes concentration buys you access.

I came at this from building things rather than buying them, so the part of B I'd interrogate is the deployment story.

Ground-up on a $50M equity fund means maybe $130M to $150M of project cost. Ask the two principals how many projects they can actually run at once and what the answer is based on. 1,400 units built over a career is a good record. It doesn't tell you they can run six concurrent projects with the staff they have now, and a development fund with a five year clock is forced to start things whether the pipeline is ready or not. Ask what's under contract or in entitlement today. If the answer is one site and a lot of relationships, the 2 percent on committed capital is paying them to go find deals while you wait, and that's the real difference between the two fee structures.

Then ask about cost. Not the contingency percentage, the actual GC arrangement. Fixed price with a GC they've used repeatedly, or cost-plus with a guaranteed maximum, and what the last three projects came in at against their original hard cost budget. Development returns live and die on the hard cost line and every developer I've worked for has a number they're carrying that's five years stale.

On your main question: the missing pref and deal-by-deal waterfall are not compensation for risk, they're a transfer of value to the sponsor, and you should price them as such. A low twenties target on a development fund with no pref is not obviously better than mid-teens on a realized track record with a pref and a 3 percent GP commit. If you want the development exposure, ask B for a pref. First-time funds in a below-peak fundraising market do negotiate, and if the answer is a flat no with $50M unraised, that's your information.

Splitting at both minimums is fine as a way to watch two managers work for four years. Just be clear that's what you're buying, and have a securities attorney read both sets of documents before you commit.