General Partner (GP)
The individual or entity that manages a venture fund, makes investment decisions, and bears unlimited liability for the fund.
The general partner is the manager of a venture capital fund, responsible for sourcing deals, making investment decisions, sitting on portfolio company boards, and ultimately returning capital to the fund's limited partner investors. GPs earn a management fee to cover operating costs and carried interest as their share of profits once the fund performs.
Unlike limited partners, general partners have unlimited liability for the fund's obligations (in practice mitigated through the fund's legal structure) and full control over investment decisions — LPs are passive capital providers with essentially no say in individual deals.
GPs typically also invest their own capital into the fund (the GP commitment), aligning their financial incentives with LPs beyond just the carry they'll earn if the fund performs well.
The GP is the active ingredient in a venture fund. LPs supply capital, but every decision that drives returns — which companies to back, how much to invest, when to follow on, when to sell — is made by the GP, which is why LP diligence is overwhelmingly diligence on people and judgment.
For founders, the GP is the counterparty that matters: the partner who champions your deal internally, takes your board seat, and decides whether to support your next round. Ask who actually has authority to say yes and who will sit on your board, since titles inflate easily.
Don't confuse the firm with the fund. A firm manages a series of funds, each with its own economics, vintage, and track record. And the GP commitment — the GP's own capital in the fund — is a separately negotiated term, not an automatic feature.
When evaluating a fund as an LP, weigh the GP's track record on realized returns (DPI), not just paper markups — plenty of GPs post strong TVPI on unrealized positions that never actually convert into cash back to investors.
What's the difference between a GP and an LP?
The GP actively manages the fund and makes investment decisions; the LP is a passive capital investor with no control over individual deals but limited liability capped at their committed capital.
How do LPs evaluate a GP before committing?
Mainly on realized track record — cash actually returned (DPI) — rather than paper markups, plus the size and funding of the GP commitment, references from founders the partners backed, and whether the strategy fits the fund size.
What does 'unlimited liability' mean for a GP in practice?
In a classic limited partnership the general partner is liable for the partnership's obligations. In practice, the GP is almost always itself an LLC or similar entity, which contains that exposure, so it's a legal distinction more than a personal financial risk for most partners.
How are general partners paid?
Two ways: a management fee that funds the firm's operations whatever the results, and carried interest, a share of the fund's profits paid only if the fund makes money. The Carried Interest entry shows how carry is calculated.
Related terms
Run the numbers yourself: dilution, SAFE conversion, and fund-returner calculators.