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What is a capital call?

What is a capital call?
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A capital call in refers to the process of requesting limited partners (LPs) of a fund to contribute their committed capital to the fund. When LPs invest in a venture capital fund, they commit to providing a certain amount of capital over a specified period, often called the commitment period.

When the GP/fund manager needs funds to make an investment, they often do capital calls to make those investments. The frequency and schedule of called capital is outlined in the limited partnership agreement.
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A capital call is a request made by a venture capital fund to its investors to contribute capital to the fund. This is typically done when the fund needs additional funds to make investments or to cover its ongoing expenses. Capital Calls are commonly paid by the Limited Partners as defined by the Limited Partner Agreement (LPA). You can learn more about the capital call process here:

https://govclab.com/2023/05/07/vc-capital-calls/

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