LP Governance in Co-Invested Deals

Navigating the Complexity of Co-Investor Governance Frameworks

In multi-stakeholder investment scenarios, co-invested deals bring both opportunity and complexity. For Limited Partners (LPs), participation in co-investments often lacks clarity on governance rights, oversight roles, and decision-making mechanisms. The absence of a structured framework can lead to misalignment, delayed strategic decisions, and even disputes between investors—ultimately weakening deal value and growth potential.

The Problem: Misaligned Expectations and Weak Governance Structures

LPs frequently step into co-invested deals under the assumption that their capital comes with proportionate influence. However, in many instances:

• Governance rights are ambiguously defined or completely absent.
  
  

• Decision-making processes are dominated by lead investors or GPs without LP representation.
  
  

• Disagreements on exit timing, valuation, or strategy lack an established resolution path.
  
  

• There is no centralized reporting or consistent access to operational transparency.
  
  

This lack of structure often leaves LPs exposed to governance risk, loss of influence, and reduced returns on capital.

The Pain Points for LPs in Co-Investments:

• Insufficient governance protections and voting rights.
  
  

• Limited visibility into company operations and strategic direction.
  
  

• Conflict of interest risks with lead investors or GPs.
  
  

• Unclear roles during follow-on rounds or exit events.
  
  

Evolve Venture Capital’s Structured Governance Solution

At Evolve Venture Capital, we recognize that LPs need more than deal access—they need influence, protection, and strategic alignment. That’s why we’ve developed a Co-Investor Governance Framework designed specifically for shared-control environments.

How Evolve Helps LPs in Co-Invested Deals:

• Defined Governance Protocols: Every co-investment agreement includes tailored governance terms outlining voting rights, information access, and board representation, aligned to capital contribution.
  
  

• Dedicated Co-Investor Reporting: Evolve provides quarterly governance reports, operational dashboards, and portfolio insights to all LP co-investors.
  
  

• Dispute Resolution Mechanisms: Pre-agreed conflict resolution frameworks ensure that disagreements are handled without derailing the investment’s strategic direction.
  
  

• Exit & Follow-On Rights: Clear documentation of LP rights during exit events or follow-on funding ensures protection from dilution and strategic marginalization.
  
  

Building Trust Through Governance

Evolve’s approach to LP governance reflects its core mission: empowering investors with clarity, control, and confidence in every deal. By structuring co-investor rights into the foundation of our investment framework, we foster aligned interests and long-term value creation for all stakeholders.