Fund Structure
Commitment Period
The window during which a fund's GP can make new investments, typically the first 3-5 years of a fund's life.
The commitment period (also called the investment period) is the designated timeframe during which a GP can deploy capital into new investments. After this period expires, the GP can only make follow-on investments in existing portfolio companies and must use remaining uncommitted capital for reserves or return it to LPs. Management fees typically step down after the commitment period ends.
In Practice
A 2024 vintage fund has a 4-year commitment period (2024-2028). After 2028, the GP can only make follow-on investments and must manage the portfolio toward exits during the remaining 6+ years.
Why It Matters
The commitment period creates deployment urgency and pacing discipline. GPs who deploy too quickly may miss later opportunities; too slowly and they waste LP capital sitting idle.
Related Concepts
Further Reading
The Venture Capital Career Path Explained
From analyst to managing partner: the real timeline, what each level does, how promotions work, and the 'up or out' dynamics that shape VC careers.
How VC Fund Economics Work: 2 and 20 Explained in Depth
The '2 and 20' model powers every venture fund, but most people misunderstand how GPs actually make money. Here's the real math behind management fees, carry, and fund economics.
Rolling Funds: The New Model for Venture Capital
How rolling funds work — the subscription-based venture capital model that lets managers raise continuously, LPs commit quarterly, and everyone skip the traditional 18-month fundraise.
How Venture Capital Firms Make Money
Management fees, carried interest, and the math behind VC fund economics. Here's exactly how venture capital firms generate returns and get paid.
Related Guides
Capital Calls Masterclass: Mechanics, Timing, and LP Management
Everything emerging fund managers need to know about capital calls — from mechanics and legal requirements to timing strategy and LP communication best practices.
The First Fund Playbook: From Zero to Fund I Close
The definitive playbook for raising your first venture fund — building your track record, finding LPs, structuring terms, and closing Fund I.
How Venture Capital Works: The Complete Guide
Everything you need to understand about venture capital — how funds raise money, how deals get done, and how returns flow back to investors. The definitive primer.
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