Fund lifecycle and operations

Liquidity

Liquidity is how quickly an investment can be turned into cash. LP interests in venture funds are illiquid: you generally can’t withdraw your capital early, and selling an LP interest on the secondary market is possible but not guaranteed.

Example: If you need cash in year four, you generally can’t pull your commitment back out of the fund.

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Back to the glossary

Knowing the language helps you follow the conversation. Knowing what to ask is how you participate in it.

Understanding the terms is a first step. The Aligned Capital Program uses them to teach you how to evaluate a fund and prepare the questions to ask its manager.

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