Limited partners
What should an LP ask about fund term and liquidity at a first-time venture manager?
a first-time venture manager: Review fund term, extensions, transfer restrictions, and distribution expectations separately.
Review fund term, extensions, transfer restrictions, and distribution expectations separately. An investment's stated horizon is not a promise of cash on a particular date. Underlying companies and the fund's governing arrangements can affect realization and timing.
Start with the decision
Create a document-based timeline showing contractual periods and uncertain events. Ask who can approve extensions or transfers and what costs or conditions apply. Use qualified advisers for the actual rights and tax consequences.
The illustrative scenario
This is an educational workbook. The company or fund and all numerical inputs below are fictional. They are not ADIN results, customer claims, market benchmarks, or a forecast.
The fictional manager is raising a first independent fund after working on investments at another firm. The pitch includes several prior deals, but the LP has not yet verified the manager's role or permission to use those examples.
A prior employer's portfolio is not automatically an attributable personal track record. Separate sourcing, analysis, investment authority, board work, and realized outcomes for each deal.
A commitment is different from the amount funded
Assume a $250,000.00 commitment and 40% called to date. The simplified funded amount is $100,000.00, leaving $150,000.00 uncalled. An invented additional call of 20% of commitment would require $50,000.00. The 20% figure is an exercise assumption, not a pacing estimate.
The actual agreement can introduce obligations and adjustments absent from this subtraction, including treatment of expenses, recycling, recallable distributions, and notice periods. Review those provisions with qualified advisers. Keep a manager's expected schedule separate from contractual obligations and from cash distributions that may never occur on the expected date.
A prior employer's portfolio is not automatically an attributable personal track record. Separate sourcing, analysis, investment authority, board work, and realized outcomes for each deal. Change the timing in the exercise and ask which decision becomes difficult. The point is to reveal funding dependencies before a commitment, not to recommend a personal liquidity reserve or promise that the illustrated call pattern will occur.
| Item | Illustration |
|---|---|
| Fictional commitment | $250,000.00 |
| Assumed proportion called to date | 40% |
| Amount funded under that assumption | $100,000.00 |
| Simple uncalled balance | $150,000.00 |
| Illustrative additional 20% call | $50,000.00 |
Use this worksheet
Answer the questions with a source, date, owner, and next action. Mark an unknown as unknown. Use public or permissioned information and involve a qualified specialist when a question requires expertise beyond the team’s competence.
- What is the stated term?
- Which extensions are possible?
- What transfer restrictions apply?
- What timing is only an expectation?
- Who has approval authority?
Questions specific to this scenario
- Which decisions were actually theirs?
- Who can verify the attribution?
- What is missing from the independent operating plan?
Request a role-by-deal table, permissioned references, dated evidence of decisions, and clear realized versus unrealized figures. Keep unavailable evidence visible instead of filling gaps with estimates.
A concrete next test
Choose one successful prior investment and one unsuccessful example from the relevant set. Ask the manager to specify their role and obtain permissioned corroboration. Compare the work shown with the responsibilities they would hold in an independent fund, including decisions not previously theirs.
Interpret the result
A timeline is useful when it distinguishes an obligation, a permission, and an assumption. Do not treat a forecasted exit date or a potential secondary route as assured liquidity.
Compare the proposed independent fund's work with the manager's actual prior responsibilities. Explain where the new role requires capabilities not shown by the old one.
Sources and method
These primary resources provide background for the concepts. The fictional scenario, calculations, and worksheet are ADIN educational examples; the sources do not report or validate those invented results. Reviewed October 11, 2026.