Roles & People
GP
General Partner — the managing partner(s) of a venture capital fund who make investment decisions, manage the portfolio, and are compensated through management fees and carried interest.
GP stands for General Partner — the professional(s) who manage a venture capital fund. In the fund structure, the GP is the active decision-maker: they source deals, conduct diligence, make investment decisions, manage portfolio companies, and ultimately return capital to limited partners.
GPs bear unlimited liability (in theory) for the fund's obligations, though in practice venture funds are structured as limited partnerships with a GP entity (typically an LLC) as the managing partner, limiting practical liability.
GP compensation comes from two sources: 1. Management fee: typically 2% of committed capital annually, covering operating expenses and salaries. 2. Carried interest (carry): typically 20% of the fund's profits above a hurdle rate — this is where GPs make the bulk of their wealth.
At larger firms, GP may refer to the fund management entity itself; individual decision-makers hold titles like 'Partner,' 'Managing Partner,' or 'General Partner.'
In Practice
At a typical $100M fund with a 2/20 structure: the GP earns $2M/year in management fees to run the fund, and if the fund returns $300M to LPs (3x), the GP keeps 20% of the $200M in profit = $40M in carry. The GPs divide the carry among themselves according to their internal carry allocation.
Why It Matters
The GP/LP relationship is the backbone of the venture capital ecosystem. Understanding who the GP is — their track record, investment thesis, decision-making authority, and fund economics — is essential for both founders evaluating investors and LPs evaluating fund managers. Not everyone with a 'Partner' title at a VC firm is technically a GP — the distinction matters for who can make final investment decisions.
VC Beast Take
Being a GP is the dream job that looks better from outside than inside. You're accountable to LPs for 10+ years per fund, portfolio companies look to you in crises, and your carried interest only materializes at exit — which can take a decade. The glamorous deal flow and partner meetings are real, but so are the board conflicts, down rounds, and difficult founder conversations that never make it into Twitter threads.