The general partner (GP) is the active manager of a venture fund—the legal and economic role that invests LP money, earns management fees and carried interest, and carries fiduciary responsibility.

How it works

A fund LP holds passive interests; the GP entity (often a Delaware LLC) makes investment decisions within LPA limits. Individual GPs or partners source deals, lead diligence, negotiate terms, and join boards. Economics typically include an annual management fee on committed or invested capital and carry—often around 20% of profits above a preferred return hurdle. The GP may commit its own capital (GP commit) to align with LPs. Key person clauses tie LP obligations to specific individuals remaining active. In conversation, “GP” means both the firm entity and the people—context clarifies which.

Why it matters

• Founders: Your lead investor’s GP team affects follow-on capacity, hiring help, and exit dynamics. Diligence the partners who will hold a board seat, not just the logo.
• LPs: GP quality drives returns. Track record, decision process, and ethics matter more than a single hot deal.
• GPs: Building a durable GP brand requires consistent reporting, fair treatment of founders, and disciplined fund sizing.

Common mistake

Conflating the GP management company with every angel scout or venture partner on the website—only certain individuals control decisions and carry.

Related ideas

Limited partner, GP commitment, carried interest, key person provision, and fund formation.