# General Partner (GP)

## Quick Definition

The fund managers who make investment decisions, manage portfolio companies, and have unlimited liability.

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## What is a GP?

General partners are the VC firm's decision-makers. They raise the fund, source deals, make investment decisions, serve on boards, and work to generate returns for LPs.

## GP Compensation

GPs earn management fees (salary and operations) plus carried interest (profit share). Partners typically have 5-25% of the carry pool depending on seniority and deal attribution.

## GP Commitment

GPs invest 1-5% of fund size with their own money. This skin in the game aligns GP and LP interests. A partner investing $500K in a $100M fund shares the downside.

### Formula

GP economics in a $100M fund:

- GP commitment: 2% ($2M, split among partners)
- Management fee: 2% ($2M/year for operations)
- Carry: 20% of profits (split among partners)

If fund returns 3x: $40M carry to split.

### Example

VC firm has 4 partners raising Fund IV ($150M):

- GP commitment: $3M (2%), $750K each
- Carry split: 50% to senior partner, 20%, 20%, 10%
- If fund 3x returns, $60M carry:
  - Senior: $30M, Others: $12M, $12M, $6M

## Related Terms

[**Most Favored Nation (MFN)**]

A provision guaranteeing an investor will receive terms at least as favorable as any subsequent investor receives.

[**Qualified Financing**]

The minimum raise amount that triggers automatic conversion of convertible notes or SAFEs.

[**Maturity Date**]

The deadline by which a convertible note must be repaid or converted to equity.