What is an LP?

LPs, or Limited Partners, are investors in a partnership, typically in venture capital or private equity funds, who provide capital but do not have a role in managing the day-to-day operations of the fund. Their liability is limited to the amount they invest, and they receive a share of the profits generated by the fund. LPs can include institutional investors such as pension funds, insurance companies, endowments, and high-net-worth individuals. The General Partner (GP) manages the fund and makes investment decisions, while LPs are mainly passive investors.