Fund life is the total contractual duration of a VC fund, typically structured as 10 years with two 1-year extension options. The "10+2" structure is divided into an investment period (typically first 5 years when new investments are made) and a harvest/exit period (years 5-10 when portfolio matures and exits). Fund life is a critical structural constraint that affects everything from when GPs can make new investments to when LPs expect distributions to how aggressively portfolio companies must pursue exits. It shapes the temporal dimension of how funds operate.
The standard structure:
Years 1-5: Investment period: