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Cornerstone LPA

Cornerstone LPA Update v1.1

The Updated Cornerstone LPA further improves on key terms to give fund managers more flexibility. VC Lab has additionally consolidated essential sections while enhancing the overall readability of the document.

Key Updates:

KEY ECONOMIC TERMS

  • No major updates have been made to previous key definitions in this section.
  • Newly added definitions are:
    • Fund Thesis
      • Sector
      • Stage
      • Geography
    • Management Fee
      • As requested by fund managers, we’ve added a flexible ‘cascading management fee structure’ while improving readability

ARTICLE 2 – CAPITAL ACCOUNTS AND PARTNERS

  • 2.2.2a – Capital Contributions
    • Removed post investment capital contribution limitations giving fund managers the option and flexibility to call capital post-investment period
  • 2.3 – Default
    • Updated to enable GPs to take more actions regarding defaulting LPs
  • 2.5 – Additional Limited Partners
    • Updated to enable GPs to bring in additional LPs after the close
      • Requiring said LPs to be on the same capital call schedules as other LPs and partners

ARTICLE 4 – OPERATIONS

  • 4.1 – Investment Objectives
    • Improved follow-on investment language
  • 4.3 – Authority of GP; Key Individuals; Conflicts of Interest; Advisory Committee
    • Tightened up conflicts of interest language
    • Flexibility to follow on investments with Special Purpose Vehicles (SPV)
  • 4.92 – Management Fee
    • Update to payable management fees 

ARTICLE 7 – SUBSCRIPTION

  • Added new Cornerstone subscription section
    • Conjoined from multiple sections to clearly define here 

ARTICLE 8 – MISCELLANEOUS

  • Consolidated key terms: 
    • 8.2 Power of Attorney
    • 8.3 Side Letters
    • 8.4 AML and Combating the Financing of Terrorism