limited partner

Definition

The actual money behind venture capital—pension funds, endowments, and rich people who give VCs money to invest and hope they know what they're doing. They're 'limited' because they can't tell the GP how to do their job.

Example Usage

Our limited partners include three university endowments, a sovereign wealth fund, and several ultra-high-net-worth individuals who want exposure to tech.

Origin

Legal structure from partnership law, formalized for venture funds in the 1970s-1980s

Fun Fact

Top-tier VC funds are so selective about LPs that they sometimes reject money from investors they don't want—demand far exceeds supply at firms like Benchmark and Sequoia.

Source: Partnership law and venture capital fund structures

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incubation

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board observer

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seed

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