General Partner (GP): In the context of venture capital funds, the general partner is the fund manager responsible for making investment decisions, managing portfolio companies, and overseeing the fund’s operations. GPs typically receive management fees and a share of the fund’s profits (carried interest) as compensation for their services.
Limited Partner (LP): An investor in a venture capital fund who contributes capital but does not participate in the fund’s management or investment decision-making process. Limited partners have limited liability, meaning their financial exposure is restricted to the amount of capital they have committed to the fund. They share in the fund’s profits in proportion to their investment, after the deduction of management fees and carried interest.