Roles & People
General Partner
The managing partner(s) of a venture capital fund who make investment decisions, manage fund operations, and are legally responsible for the fund's obligations.
General Partners (GPs) are the people who run a venture capital fund. They raise capital from Limited Partners (LPs), decide which companies to invest in, sit on boards, support portfolio companies, and ultimately return capital to LPs. GPs are personally liable for the fund's obligations (to a limited degree, typically through the fund structure).
GPs are compensated through two mechanisms: management fees (typically 2% of committed capital annually, used to cover fund operations and GP salaries) and carried interest or 'carry' (typically 20% of profits above the return hurdle, which is the real upside for successful investors).
In smaller funds, all GPs may be equal partners. In larger funds, there are often hierarchies: managing GPs, general partners, principals, associates, and analysts. The GP title can be used at different levels of seniority depending on the firm.
In Practice
At a $100M fund charging 2/20, the GPs receive $2M per year in management fees (covering salaries, rent, and operations) and keep 20% of any profits above the hurdle rate. If the fund returns $300M, the carry pool is 20% of $200M in profits = $40M, split among the GP team.
Why It Matters
Understanding GP incentives is critical for founders taking VC money. GPs need companies to return the fund — meaning a 10x return on their check size. This shapes what kinds of outcomes they need, which affects how they think about M&A offers, late-stage fundraising, and exit timing.