What it is
In a commitment fund, LPs agree to a total amount up front, and the GP calls portions as deals close. LPs keep the uncalled money until a capital call notice arrives. Missing a call is a serious breach because the fund may lose a deal or a deposit.
How it works
Notice periods of about 10 business days are common. A per-call cap limits how much can be demanded at once, making cash planning easier.
Example: a $300,000 commitment with a 25% per-call cap means no single notice can exceed $75,000, and total calls can never exceed $300,000.Default remedies range from interest charges to forfeiting part of your interest. They should be proportionate, applied after written notice and a cure period, and described clearly in advance.
Good for LPs vs. watch out for
✓ Good for LPs
- 10+ business days’ notice
- Cap on each call and on total calls (never above the commitment)
- Each notice states purpose and amount
- Default remedies only after notice and a cure period
- Wire instructions verified by phone, never changed by email
⚠ Watch out for
- Short notice (e.g., 3–5 days)
- Calls above the commitment for “fund needs”
- Automatic forfeiture of 100% of a defaulter’s interest
- Wiring instructions sent by email link
How Story Samurai Investments handles it
Template: calls on 10–15 business days’ written notice [PLACEHOLDER – confirm], each stating the amount, due date and purpose; total calls never exceed unfunded commitment and no single call may exceed [PLACEHOLDER]% (LPA §3.3). Default remedies apply only after written notice and a [PLACEHOLDER]-business-day cure period (LPA §3.4). Wiring instructions are confirmed by phone and never changed by email alone.
Based on our template documents (TEMPLATE, DRAFT FOR ATTORNEY REVIEW, NOT FOR USE). The final Limited Partnership Agreement controls.
Where to find it in the documents
- LPA §3.3, §3.4
- PPM §1
- Risk Factors #8, #14