Limited Partner (LP)
A limited partner (LP) is an investor who commits capital to a venture fund without managing its investments, in exchange for limited liability capped at their investment.
A limited partner, or LP, is an investor who commits capital to a venture fund without taking part in its day-to-day investment decisions, in exchange for limited liability capped at the amount they invested. LPs are the source of nearly all the money a venture fund deploys: pension funds, university endowments, sovereign wealth funds, family offices, and fund-of-funds vehicles all typically invest as limited partners rather than managing the fund directly.
Fund-of-funds firms occupy an unusual dual role in this structure. Vintage Investment Partners, for example, acts as a limited partner when it invests in other venture funds across the United States, Europe, and Israel, while also raising its own capital from its own limited partners, such as pension funds and family offices, who want diversified exposure to venture capital without picking individual funds themselves.
LPs typically commit capital for a fund's full lifecycle, often 10 years, and receive periodic capital calls as the fund's general partner identifies investments to make.