Previous Post
Next Post
0

Asked by

Community Member

on

in

Venture Legal

What Extra Information Should Be Disclosed if an LP Exceeds 25% Threshold of Fund Size in Commitments?

Hello! Does anyone know what is the extra information that should be disclosed if an LP exceeds the 25% threshold of the fund size in commitments?
1 See in Base
0

Answered by

Community Member

on

Everything is defined in the LPA. As a rule, you don’t want any one LP to own 25% or greater, otherwise they control the fund. You could build in custom protections. You can read a sample and simple LPA with the Cornerstone for some examples on how the control provisions work with the Majority in Interest of the Limited Partners.

Join the Leaders of Venture 2.0

Our graduates are creating disruptive capital with exceptional expertise, ethical investing practices, and exceptional returns. Whether you're launching your first fund or scaling an established firm, VC Lab provides the tools, network, and support needed to succeed in today's venture landscape.

Apply Now
How do I start raising my first venture fund? What are the key considerations for becoming a Limited Partner?
How can I improve my emerging manager firm's deal flow? What strategies help attract institutional LPs?
How do I build a compelling investment thesis? What are best practices for portfolio management?
How can I differentiate my VC firm in a crowded market? What are the typical fund terms for emerging managers?