Who’s Who in a Venture Capital Fund

Brian Hall - June 16, 2020 - Business Law, Venture Capital


The road to success for a startup company will, almost of necessity, run through a Venture Capital (VC) fund. What we’ve collected here are the typical roles in a simple VC Fund and the functions each plays.

Funds vs. Firms

The first division to be aware of is the difference between a VC Firm and its various Funds. A VC Firm is a business on its own, typically a Limited Liability Company (LLC). VC Firms create and solicit investment in Funds, which they then manage.

Each Fund is a subsidiary business of the Firm. Traditionally, the Funds take the form of Limited Partnerships. The Fund is guided by its General Partners (GPs), who are high-ranking members of the Firm. Each Fund is invested into separately by outside investors who become Limited Partners (LPs) of the Fund.

  • Each Fund has its own life cycle, typically lasting for 5-10 years.
  • Each Fund may have its own focus, such as impact investing, renewables, workplace tech, or consumer packaged goods.

GPs, or Managing Directors

As mentioned above, GPs (alternatively titled “Managing Directors”) of a Fund are members of the Firm who take part in running that Fund. GPs are the captains of the ship.  They are the big-picture shot-callers, the ones primarily tasked with sourcing high-dollar investments and promising portfolio companies. They’re also the primary networkers for the Fund.

It’s standard for GPs to contribute capital to the Fund, though in a much smaller amount than the LP investors. Think 1-2% of the total invested into the Fund. The GPs assume some risk by putting their own capital into the Fund, which signals confidence to the LPs.

LPs, the Investors

LPs are the investors, and officially have no hand in the managing of the Fund. The capital required to invest at in a VC Fund is substantial, so investors tend to be among the following:

  • Corporations,
  • Pension funds,
  • University endowments,
  • Fund of funds,
  • Very- or ultra-high net worth individuals, or
  • Family offices.

LPs are passive investors. This is part of why their liability is limited by law, so they can only lose what they invest. But since they will have invested sizable amounts, they may try to influence the GPs to try to have a hand in the protection and growth of their investment. The more an LP has invested, the more influence they may seek to have. On the other hand, the more successful the GP, the more LPs will be inclined to defer. The relationship is not straightforward, but it’s a reality.

Venture Partner

Venture Partners assist in the sourcing and management of deals. Venture Partners are influential, and often have the ear of the higher-ups at the Firm. They function similarly to GPs, but do not have full partner status for one reason or another. For example, is not uncommon for a venture partner to be


Principals do some deal sourcing, but mostly work alongside the portfolio companies. They serve the advisory function that VC firms provide to their portfolio companies, adding experienced and well-supported input to the company’s decision making.


Associates are the boots-on-the-ground workers for VC firms. They may work on pretty much any topic of interest to anyone higher up, but usually on projects that are smaller in scope. Associates are often the in the earliest stages of their careers, compared to the other roles here listed.


Those are the basics. VC Firms create one or more Funds. Those Funds are run by GPs, with the assistance of their Venture Partners, Principals, and Associates. Any of them may solicit investments from wealthy parties who will become LPs for the fund. In addition, the Principals and Associates help support the portfolio companies, which in turn improves the odds of success of the Fund.

You can learn more about the broader VC ecosystem in another Traverse Legal article: “Who’s Who When it Comes to the Venture Capital Ecosystem.”

This blog post contributed, in part, by Traverse Legal Virtual Law Clerk Eric O’Neill.

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This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. This page was approved by attorney Enrico Schaefer, who has more than 20 years of legal experience as a practicing Business, IP, and Technology Law litigation attorney.