Does your voting process still fit the partnership?

What the voting rule means in practice

This check compares the number of General Partners with their declared voting model. The same rule can work differently as the partnership grows or shrinks.

With one voter, consensus adds no separate approval. With two voters, a simple majority requires both to agree, so it is also unanimity. With a larger committee, requiring everyone to agree can make coordination more demanding. Those are features to understand, not proof that a process is invalid.

Use a team change as a review point

When a partner joins or leaves, walk through how the next investment decision would be made. Check quorum, approval and any delegation against the written process.

Updating governance may require approvals under the partnership or fund agreements. The check can start that conversation; it does not determine what changes the firm can make.

A question that comes up on all three IC checks

Readers ask a version of the same question on each of the three checks that read the investment committee: does the norm against funding competing companies still hold, and does the model assume it does. The honest answer is that the norm is visibly eroding, and that the model does not depend on it either way.

Charles Hudson of Precursor Ventures has argued that as venture fund sizes keep growing, the tradition of firms holding a norm, if not a stated policy, against investing in competitive companies is likely to go away, and that this is a case where the business model for large funds is at odds with what most founders want. Chris Neumann, writing up that argument, notes that smaller funds and single-stage specialists are rethinking their own approach as well.

This is a long-simmering tension rather than a new development. Hunter Walk laid out the same mechanism in 2019, observing that large firms writing early checks would eventually find they had blocked themselves out of a category, and predicting pressure on the traditional principle that a firm will not back two competing companies. Two arguments seven years apart, reaching the same conclusion, is evidence of a slow structural drift, not of a break.

What this means for these three checks is narrow. The model reads the firm's declared voting structure, its declared scope, its declared economic rights, and its partner count, and asks whether those choices fit each other. It does not read the firm's conflict policy, and it takes no position on whether a firm should hold one. A firm that has relaxed its conflict stance has changed something real about how it operates, and the model will see that only where it changes one of the structural variables above.

• VCs are Changing Their Tune on ConflictsChris NeumannQuotes Charles Hudson of Precursor Ventures on why the norm is likely to go away as fund sizes grow.
• Coming Storms: Three Reasons That VC Firms May Start Overlooking “We’re Conflicted” and Make Competing InvestmentsHunter Walk, October 2019The same argument, made seven years earlier.

Count decision-makers, not everyone on the team

The input is General Partners with economic and decision rights, rather than all investment professionals. A team with two GPs and six other professionals is a two-partner structure for this check.

A single-partner firm can have a clear decision process. Describe who has authority and any external checks accurately, so partners and LPs understand how it works.