Glossary
Limited partner (LP)
An investor who commits capital to a venture or other private fund but does not manage it. Liability is generally limited to committed capital.
Why it matters
LP status is the legal and economic foundation for nearly all institutional venture capital. It defines who owns what, who decides what, and what each side is exposed to.
Example
A family office commits $1M to a venture fund as a limited partner. The general partner calls capital over the investment period and reports back through quarterly statements.