A venture fund has two sides. The general partners (GPs) are the firm: they raise the fund, source and pick investments, sit on boards, and decide follow-ons and exits. The limited partners (LPs) are the investors in the fund itself, pension funds, endowments, family offices, sovereign and corporate investors, sometimes governments, who commit capital but stay passive, with liability limited to what they commit. When a startup “raises from a VC”, the GP writes the cheque, but the money ultimately belongs to the LPs, and the GP is accountable to them.
The economics align the two sides imperfectly. GPs typically earn a management fee (often around 2% of committed capital a year) to run the firm, and carried interest (commonly 20% of profits, after LPs get their capital back and sometimes a preferred return) as the real upside. The fund has a finite life, classically about 10 years, with an investment period early and a harvest period later. That clock is the part founders most often ignore: a fund must eventually return capital and gains to its LPs, so its willingness to back a long-horizon company depends partly on where it sits in that decade.
For a deep tech founder the GP/LP structure has two practical consequences. First, fund age matters: capital from a fund early in its life is more patient than capital from one approaching the end, which is staring at a return deadline. Second, the LP base matters: a fund whose LPs understand and want deep tech can hold a position through a long roadmap and follow on; a fund whose LPs expect quick software-style returns will pressure the GP, and that pressure reaches the board. Asking, diligently and politely, about fund vintage, remaining reserves and LP appetite is reverse diligence that a serious founder does before taking the money.