Fundraising
What is Capital Commitment?
A capital commitment is the total amount of money a limited partner pledges to a fund. The capital is not paid upfront — it is drawn down over time through capital calls as the fund makes investments.
A capital commitment is the amount an LP legally agrees to contribute to a fund over its life. The sum of all LP commitments (plus the GP commit) is the fund’s total size. Crucially, committed capital is not transferred at closing — it is "called" incrementally as the GP needs it.
For example, an LP that commits $10M may only have $2M called in the first year. The uncalled portion is sometimes referred to as "dry powder" at the fund level.
Also known as: commitment, committed capital