Usually, a GP is removable only if the LPA explicitly provides a removal mechanism. In most VC funds, LPs **cannot remove a GP simply for poor performance**.
Common removal triggers, if included in the LPA:
- fraud, willful misconduct, or gross negligence
- material breach of the LPA
- disqualifying regulatory events
- key person or cause-based provisions
- conflict-related violations, if specifically covered
Process:
- defined LP vote threshold in the LPA
- formal notice and cure period, if applicable
- removal of the GP and/or termination of the investment period, depending on drafting
If the governing documents do not include removal rights, LP remedies are usually limited. This is document-specific, so check the LPA closely.
Common removal triggers, if included in the LPA:
- fraud, willful misconduct, or gross negligence
- material breach of the LPA
- disqualifying regulatory events
- key person or cause-based provisions
- conflict-related violations, if specifically covered
Process:
- defined LP vote threshold in the LPA
- formal notice and cure period, if applicable
- removal of the GP and/or termination of the investment period, depending on drafting
If the governing documents do not include removal rights, LP remedies are usually limited. This is document-specific, so check the LPA closely.