"Venture Capital Fund Structures" refer to the organisational and legal frameworks that venture capital (VC) funds adopt to structure their operations, manage investments, and distribute returns to investors. These structures are designed to align with the fund's investment strategy, risk appetite, and regulatory considerations. Here are some key elements of venture capital fund structures:
Limited Partnership (LP) Structure Overview: The majority of venture capital funds adopt a limited partnership structure. In this setup, the general partner (GP) manages the fund's investments, while limited partners (LPs) contribute capital and share in the profits but have limited liability.
Roles:
- General Partner (GP): Manages the fund, makes investment decisions, and takes an active role in portfolio companies.
- Limited Partner (LP): Provides capital to the fund and receives a share of the fund's returns, typically proportional to their investment.
