General Partners (GPs)

General Partners (GPs)

General Partners (GPs) are partners in a VC firm who are commonly managing a fund and are actively involved in the day-to-day operations of the business. They convince limited partners to add their money to the fund and then invest that money for them.

Definition of general partner

A general partner is an individual or entity that is actively involved in the management and operations of a partnership, such as a venture capital firm or private equity firm. As a general partner, an individual is responsible for making investment decisions, overseeing the portfolio companies, and contributing their expertise and resources to the partnership.

In a venture capital firm, the general partner is typically a senior member of the investment team who is responsible for identifying, evaluating, and executing investment opportunities. They may also be involved in supporting and advising the portfolio companies as they grow and develop.

The general partner is typically responsible for managing the partnership and making decisions on behalf of the limited partners, who are passive investors who provide capital to the partnership in exchange for ownership equity. The general partner is typically compensated based on the performance of the partnership and may receive a share of the profits generated by the investments.

The general partner is different from a managing partner, who is responsible for the overall management and operations of the partnership. A managing partner may be a general partner or may be a separate individual who is responsible for managing the day-to-day operations of the partnership, including budgeting, financial reporting, and compliance.

In a venture capital firm, the managing partner may be responsible for overseeing the investment team, managing relationships with limited partners and portfolio companies, and setting the overall strategic direction of the firm.

Overall, the general partner is an integral part of a partnership, playing a crucial role in identifying and executing investment opportunities and contributing their expertise and resources to the success of the partnership.