How does Liability of Members work? Let’s discuss examples.

Venture capital funds are typically formed as limited partnerships which have general partners and limited partners. In a  limited partnership, the general partner faces unlimited liability while the liability of the limited partners is limited to the amount of their investment.  For example, if the fund is has debts or is sued or incurs liabilities, the limited partners will not be subject to paying for the fund's liabilities while the general partner will face exposure to such debts and liabilities.