General Partner (GP)
The managing partner(s) of a VC fund who make investment decisions and manage the portfolio.
Definition
General partners are the managing partners of a venture capital or private equity fund. They raise capital from LPs, source and evaluate deals, make investment decisions, sit on portfolio company boards, and manage the fund. GPs typically invest 1-5% of the fund's capital themselves (GP commit) and earn management fees (2% of fund size annually) and carried interest (20% of profits). GPs have unlimited liability for the fund's obligations.
Why it matters
The GP at your company's lead VC firm is likely on your board. They influence major decisions including fundraising, hiring, and exit timing. Understanding their incentives (carried interest on large exits) helps you predict their behavior.
Example
A GP raises a $200M fund, commits $4M personally (2% GP commit), earns $4M/year in management fees (2%), and receives 20% of profits above the investment amount. If the fund returns $600M, the GP earns 20% of $400M = $80M in carry.