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VC Beast

Fund Structure

Limited Partnership Agreement (LPA)

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.

Related Concepts

GP →LP →Management Fee →Carried Interest →Fund Formation →

Further Reading

LP vs GP: How Venture Capital Fund Structure Works

A clear explanation of how venture capital funds are structured, the roles of limited partners and general partners, fee economics, and how fund structure affects startup founders.

Related Guides

The Complete Fund Operations Checklist: From Formation to First Close

A step-by-step operational checklist covering every decision, filing, and system an emerging fund manager needs — from entity formation through first LP close.

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