GP vs. LP
The general partner runs the fund and picks the investments; the limited partner supplies capital and has no say in individual deals.
Every venture fund is structured as a partnership with two distinct roles. The General Partner (GP) manages the fund day-to-day: sourcing deals, running diligence, sitting on boards, and deciding where capital goes. In exchange, the GP earns a management fee (typically 2% annually) and carried interest (typically 20% of profits).
The Limited Partner (LP) supplies the capital and has "limited" liability and involvement — legally capped at their investment amount, with no say in which companies the fund backs. This division of labor is the entire structural premise of venture as an asset class: LPs buy access to a GP's sourcing and judgment, not the ability to pick deals themselves.
Why it matters
Understanding this split is the foundation for everything else on this site — see the full breakdown of angel investing vs. becoming an LP if you're deciding which role fits you.