A general partner (GP) runs the fund. GPs raise capital from limited partners, source and select investments, sit on portfolio company boards, and decide when to sell. In exchange they earn management fees and carried interest.
GP vs LP at a glance
| Attribute | General Partner | Limited Partner |
|---|---|---|
| Role | Manages the fund | Supplies the capital |
| Liability | Unlimited (via the management entity) | Limited to committed capital |
| Compensation | Fees + carried interest | Investment returns |
| Investment decisions | Yes | No (passive) |
What GPs actually do
- Fundraise — pitching institutional LPs (endowments, pensions, funds of funds, family offices) every 2–4 years
- Source deals — networks, outbound, inbound, demo days
- Make investment decisions — typically via a partnership vote or investment committee
- Support portfolio companies — board seats, recruiting, follow-on financing, exits
- Report to LPs — quarterly updates, valuations, capital calls, and distributions
GP commitment
LPs expect GPs to invest their own money alongside the fund — usually 1–5% of fund size — so the people picking investments have personal downside. Ask a prospective investor about their GP commitment if you want to understand their alignment.
Why founders should care
When you raise from a firm, an individual GP champions your deal, and that person's standing inside the partnership affects your follow-on support. A deal led by a senior GP with strong carry economics behaves differently in hard times than one led by a departing principal.