How LPs Assess GP Alignment on Fund Recycling

In this episode of The Venture Capital Investor Podcast, Lucas and Luna explore a critical yet often overlooked aspect of limited partner diligence: how general partners handle fund recycling. Using the example of a hypothetical mid-stage VC fund that recycles early exits to boost deployment, they break down the mechanics of recycling, its impact on fund metrics like net TVPI and DPI, and why LPs must scrutinize recycling policies before signing. They discuss how recycling can mask weak deployment or inflate reported performance, how to evaluate recycling limits and timing, and the importance of understanding the GP's reinvestment decision-making process. With practical insights for LPs navigating fund documents, this episode offers a clear framework for assessing GP alignment on recycling, ensuring that your capital is working as intended. Tune in for a deep dive into one of the most under-discussed terms in venture fund agreements. #VentureCapital #LimitedPartners #FundRecycling #GPAlignment #LPInvesting #FundTerms #PrivateEquity #DueDiligence #FundPerformance #VCInvesting #FundManagement #InvestorEducation #Finance #Business #FexingoBusiness #BusinessPodcast #StartupInvesting #FundEconomics Keep every episode free: buymeacoffee.com/fexingo