In venture capital, committed capital refers to the amount of money that a venture capital firm has committed to invest in startups over a certain period of time. This is the amount of money that the firm has set aside and agreed to invest, as opposed to the amount of money that it currently has available to invest.
Committed capital is an important metric for venture capital firms, as it indicates the size and scale of the firm's operations. It also gives entrepreneurs and other investors an idea of the firm's ability to make investments and the resources it can bring to bear on its portfolio companies.
Committed capital typically comes from limited partners such as institutional investors, high net worth individuals, or family offices. These limited partners commit capital to the venture capital firm over a period of time, usually five to ten years. The venture capital firm will then use that committed capital to make investments in startups over the course of the fund's life.
Committed capital can also be known as "Funds under Management" (FUM) and it is an important metric for the firm as it is used to measure the performance of the fund and the returns for the limited partners.