Previous Post
Next Post
0

Asked by

Community Member

on

in

Venture Legal

What Are the Various Approaches to Address Concerns About a Solo GP's Inability to Work on a Fund Due to Unforeseen Circumstances?

Solo GP issue: What are the different approaches folks have seen re: addressing questions about something happening to a GP that prevents them from working on the fund? This is both a due diligence matter and a legal/document question. (i.e. the proverbial what if you get hit by a bus planning?)
1 See in Base
0

Answered by

Community Member

on

This is handled by LPAs by something called a Key Person Clause. You can see how the Cornerstone LPA handles this by searching the agreement for ‘Key Individuals’ and for ‘Limited Operations’ mode: But, basically, you can tell them that the fund will go into limited operations mode and then, the interests of the fund will likely be distributed to the limited partners based on the terms of the LPA.

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?