v 3.0 likely made that change to align conflict approval with broader LP consent rather than a small LPAC subset.
- An LPAC is advisory and typically represents only a few LPs
- A Majority in Interest reflects the economic owners of the fund more directly
- That can reduce the perception that a small committee approved a conflict affecting everyone
- It may also better match institutional expectations around governance, since conflicts and fund administration are pass/fail diligence items
More broadly, institutional LPs expect managers to “clear conflicts of interest” and operate with institutional-grade governance from Fund I onward. Reference: https://decilegroup.com/articles/raising-institutional-lps, https://decilegroup.com/articles/institutional-lp-fundraising-in-emerging-vc
- An LPAC is advisory and typically represents only a few LPs
- A Majority in Interest reflects the economic owners of the fund more directly
- That can reduce the perception that a small committee approved a conflict affecting everyone
- It may also better match institutional expectations around governance, since conflicts and fund administration are pass/fail diligence items
More broadly, institutional LPs expect managers to “clear conflicts of interest” and operate with institutional-grade governance from Fund I onward. Reference: https://decilegroup.com/articles/raising-institutional-lps, https://decilegroup.com/articles/institutional-lp-fundraising-in-emerging-vc