Fund Structure
Last updated
Quick Answer
Contractual rights allowing LPs to invest directly alongside a VC fund in specific portfolio companies.
Co-investment rights give LPs the option to invest additional capital directly into portfolio companies beyond their fund commitment. This allows LPs to increase exposure to the fund's best deals without paying additional management fees or carry on the co-invested capital.
In Practice
The endowment committed $50M to the fund and negotiated co-investment rights, later deploying an additional $10M directly into the fund's top-performing Series B company.
Why It Matters
Co-investment rights are a valuable LP benefit — they provide fee-free exposure to top deals and can significantly enhance portfolio returns.
VC Beast Take
Co-investment rights are the VIP upgrade of LP perks. The best deals get even better when you don't pay 2-and-20 on them.
Co-investment rights give LPs the option to invest additional capital directly into portfolio companies beyond their fund commitment. This allows LPs to increase exposure to the fund's best deals without paying additional management fees or carry on the co-invested capital.
Understanding Coinvestment Rights is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Coinvestment Rights falls under the fund-structure category in venture capital. This area covers concepts related to how venture capital funds are organized, managed, and governed.
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