Fund Structure
Last updated
Quick Answer
The legal document governing the relationship between GPs and LPs in a venture fund, including economics, governance, and operations.
The LPA is the master contract of a VC fund. It defines management fees, carried interest, GP commit, investment restrictions, key person provisions, reporting requirements, fund term, and extension rights. Negotiating the LPA is a critical part of fund formation.
In Practice
The LPA specified: 2% management fee stepping down to 1.5% after investment period, 20% carry with 8% preferred return, 10-year term with two 1-year extensions, and a key person clause covering both founding partners.
Why It Matters
The LPA governs every aspect of the GP-LP relationship for 10+ years. Understanding its provisions is essential for both GPs structuring their fund and LPs evaluating commitments.
VC Beast Take
The LPA is a 100-page document that determines the next decade of your financial life. Read every page. Or pay a lawyer who will.
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The LPA is the master contract of a VC fund. It defines management fees, carried interest, GP commit, investment restrictions, key person provisions, reporting requirements, fund term, and extension rights. Negotiating the LPA is a critical part of fund formation.
Understanding Limited Partnership Agreement (LPA) is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Limited Partnership Agreement (LPA) 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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