capital call – n: the legal right of a firm to
call, or demand, a portion of the money committed to it by an investor under a
previous capital commitment; the act of making such a call. For example, when a
venture capital firm (general partner, or G.P.) has received capital
commitments from its limited partner (L.P.) investors for a venture capital
fund, and decides to invest in a portfolio company, the VC makes a capital call
to its L.P. investors in order to fund the new portfolio investment.
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Adapted from "The CompanyCrafters Entrepreneur's Dictionary"
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