How LPs Are Using Side Letters to Secure Better Terms

Lucas and Luna dive into the world of venture capital side letters—the private agreements between limited partners and fund managers that can grant preferential terms on fees, transparency, or co-investment rights. They explore a 2025 survey from the Institutional Limited Partners Association showing that 62% of LPs now negotiate side letters, up from 41% five years ago. The hosts break down how pension funds and endowments use side letters to secure most-favored-nation clauses, fee caps, and data access, using the recent $500 million commitment from CalPERS to a top-tier VC firm as a concrete example. They also discuss the tension between standardization and customization, and why smaller LPs are forming negotiating coalitions to level the playing field. The episode closes with a reflection on whether side letters are becoming the new normal in VC fundraising. #VentureCapital #SideLetters #LPs #FundTerms #CalPERS #ILPA #MostFavoredNation #CoInvestment #FeeNegotiation #Transparency #PensionFunds #Endowments #LimitedPartners #Fundraising #Finance #BusinessPodcast #FexingoBusiness #VCInvesting Keep every episode free: buymeacoffee.com/fexingo