A Limited Partner (LP) is an investor in a venture capital fund who commits capital and shares in returns but does not manage the fund. The structure applies to PE funds, hedge funds, and other private investment vehicles. LPs do not make investment decisions or have unlimited personal liability beyond their committed capital, in contrast to general partners (GPs) who run the fund and have personal liability for fund obligations. LPs are the source of essentially all venture capital, and the dynamics of LP capital commitments shape the entire venture industry's pace and behavior.
The major LP categories: public pension funds (CalPERS, CalSTRS, Washington State Investment Board, and similar state-level retirement systems are ...