Let me start by explaining two terms in the question.
‘LP’ is a generic term for an investor in a venture capital fund. Typically they are pension funds or insurance companies (otherwise known as ‘institutional investors’), but they can also be corporates, wealthy individuals or governments looking to stimulate the startup ecosystem. LP is short for Limited Partner, a reference to the legal status of investors in venture capital funds – technically they are partners in the fund with limited rights and obligations. I covered this in a little more detail when I answered the question Where do VCs get their money from?
A ‘venture capital fund manager’ or sometimes ‘venture capitalist’ is the team of people that decide which companies to invest in and then manage them to exit, they are often known as the ‘GP’ or ‘general partner’. A GP can have multiple funds under management at any one time and they are compensated according to the terms of the GP agreement for each fund which determines the fees and profit share they receive. I covered this in a little more detail when I answered the question What is venture capital?
To read the full, original article click on this link: What does an LP look for in a venture capital fund manager? « The Equity Kicker
Author: Nic Brisbourne
