Call of capital ( eng. Capital call ) - the requirement for the investor to invest money under the previously concluded agreement.
For example, for some mutual funds, the peculiarity of investments is that venture funds are not capitalized immediately, but gradually, as investment deals are prepared.
When creating a mutual fund (the moment when the “ subscription to the fund is closed ”), investors enter into an agreement - an obligation to pay their share upon request. When the fund needs money to pay for the next round of financing a portfolio company or for current expenses, it sends a “ capital challenge ” to all investors - a requirement to make another contribution to the commitment .
Thanks to this scheme, the fund does not have a problem of what to do with unplaced funds, and the money is not frozen.
Links
- Venture received a residence permit (inaccessible link)