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    Investment & FinanceStartup LifecycleLP / GP

    Limited Partner / General Partner

    The two principal roles in a venture capital fund: LPs provide capital, GPs manage the fund and make investment decisions.

    Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 9, 2026

    Definition

    Venture capital funds are typically organized as Delaware limited partnerships in which Limited Partners (LPs), pension funds, endowments, family offices, sovereign wealth funds, fund-of-funds, high-net-worth individuals, provide the capital, and General Partners (GPs), the venture firm's investment professionals, manage the fund. LPs have limited liability and limited management role; GPs have unlimited liability for fund obligations and earn management fees (typically 2% of committed capital annually) plus carried interest (typically 20% of profits above a hurdle).
    What the regulation says
    LP-GP relationships are governed by partnership law and the fund's limited partnership agreement, not MedTech device regulations. For Delaware funds, the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §§17-303 and 17-403, addresses LP liability and GP powers and liabilities. LP liability protection is subject to statutory conditions; a GP generally bears partnership obligations, although using an LLC as GP can limit individuals' exposure. Management fees, carried interest, hurdles and governance rights are negotiated terms, not legally prescribed percentages. Separately, Investment Advisers Act of 1940 §203(l), added by the Dodd-Frank Act, enacted July 21, 2010, exempts advisers solely to venture capital funds from SEC registration, but does not eliminate all regulatory obligations. NVCA and ILPA are industry associations, not regulators. ILPA Principles 3.0, published in June 2019, recommends alignment of interests, governance and transparency, including clear fee and expense disclosure, meaningful GP commitments and LP advisory committee oversight of conflicts. These are voluntary principles, not binding law. NVCA Model Legal Documents primarily address venture financing transactions involving portfolio companies, rather than prescribing LP-GP fund terms. For MedTech investors, these resources inform commercial practice; applicable law and negotiated fund documents determine enforceable rights and duties.

    What this means in practice

    MedTech founders should understand LP composition because it shapes a fund's risk tolerance, hold period (typical 10-year fund life), and willingness to support follow-on rounds. Funds late in their investment period have less capacity for new investments and reserves.

    Examples

    • A large university endowment, acting as an LP, commits capital to a MedTech-focused venture fund, trusting the GP's expertise to identify promising medical device startups.
    • A MedTech startup seeks investment from a venture fund where the GP, a former industry executive, performs extensive due diligence, leveraging their operational experience before making an investment decision.
    • During a fundraising round, a MedTech founder presents their business plan to a venture fund, understanding that the fund's LPs influence its investment strategy, including its preference for early-stage versus late-stage MedTech companies.
    Common pitfalls
    • •Pitching a fund without checking where it sits in its investment period.
    • •Underestimating how LP composition (pension vs. family office) affects a GP's behavior in tough rounds.

    Frequently asked questions

    Venture capital funds are typically structured as Delaware limited partnerships in which Limited Partners, such as pension funds, endowments, family offices, sovereign wealth funds, and high-net-worth individuals, contribute capital and have limited liability with no role in day-to-day investment decisions, while General Partners are the venture firm's investment professionals who manage the fund, make investment decisions, and bear unlimited liability for fund obligations. GPs are compensated through a management fee, typically around 2 percent of committed capital annually, plus carried interest, typically around 20 percent of profits above a defined hurdle rate.

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    Sources

    4 sources

    Sources support the definition or relevant regulatory context, not necessarily every claim on this page. Each is graded against our source-tier hierarchy so you can see what rests on binding law versus commentary.

    Tier 2Regulator guidance and consensus· 1Tier 4Trade press and expert commentary· 3
    Link health: 4 verified· last checked 2026-06-20· added official documents checked 2026-11-01
    NVCA·2ILPA·1U.S. Securities and Exchange Commission·1
    1. 1
      NVCA, Venture Capital 101
      Tier 4 Verified
      NVCAnvca.org
    2. 2
      ILPA Principles 3.0
      Tier 4 Verified
      ILPAilpa.org
    3. 3
      NVCA Model Documents
      Tier 4 Verified
      NVCAnvca.org
    4. 4
      SEC capital-raising glossary: limited and general partners
      Tier 2 Verified
      U.S. Securities and Exchange Commissionsec.gov

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