Fund Structure
Hard Cap
The maximum amount a fund will raise — once the hard cap is reached, no additional LP commitments are accepted.
A hard cap is the maximum fundraising target for a venture fund — the GP cannot accept additional LP capital beyond this amount. Opposite of the soft cap (the minimum needed to close the fund). Hard caps exist for strategic reasons: larger funds require larger exit outcomes to generate top-quartile returns, and GPs want to maintain their investment strategy without being forced to deploy too much capital into suboptimal opportunities. When a highly sought-after fund exceeds its hard cap in LP interest, the GP must turn away potential LPs — a sign of strong fund demand. For LPs, getting allocation in an oversubscribed fund at hard cap requires strong existing relationships and often early commitments.