Venture capital firms operate on a specific model called a Limited Partnership. This structure has two key players: the General Partners (GPs) and the Limited Partners (LPs). Think of the GPs as the ship captains. They are the venture capitalists who manage the fund, source deals, and make investment decisions. They actively steer the ship.

The Limited Partners are the investors who provide the capital for the fund. They are the wealthy patrons funding the voyage. LPs are typically institutions like pension funds, university endowments, insurance companies, or high-net-worth individuals. Their role is passive; they provide the money but don't participate in the day-to-day management of the fund. Their liability is 'limited' to the amount of money they invest.