Venture Capital Limited Partnership
Venture Capital Limited Partnership Meaning:
In venture capital terminology, the term Venture Capital Limited Partnership refers to a limited partnership set up between the Venture Capital investor and the start-up company which the Venture Capitalist is funding in return for equity in the company.
In venture capital terminology, the term Venture Capital Limited Partnership refers to a limited partnership set up between the Venture Capital investor and the start-up company which the Venture Capitalist is funding in return for equity in the company.
For example, in a Venture Capital Limited Partnership, the start-up company that receives the funding is typically the general partner, and the Venture Capital investor, individual or company, makes up the limited partner in the venture. The limited partner in a Venture Capital Limited Partnership has the amount of liability in the investment limited to the amount of the money invested, while the general partner in the limited partnership assumes all other liabilities. In other words, if the company goes into default or bankruptcy, the Venture Capital investor can only lose the original amount of the investment. This arrangement allows the start-up the capital needed to continue operations and increase profitability.