# First Close

The **first close** is the earliest point at which a fund is legally constituted with a committed group of LPs. From the first close date, the GP can issue capital calls and deploy capital into investments.

## Why First Close Matters

The first close date anchors the economics of the entire fund:

* **Capital calls** can only begin after first close — all LP capital call histories reference call dates after this event.
* **Management fees** start accruing from first close (or a date specified in the LPA, sometimes retroactive to a signing date).
* **Equalization interest** on subsequent-close LPs accrues from each prior capital call's due date — not from first close itself, but relative to it.
* **Fund lifecycle** phase tracking starts at first close.

## First-Close LP Incentives

LPs who commit at first close take on more uncertainty (the fund is unproven) and often have less negotiating leverage. GPs typically compensate with preferential terms:

* **Management fee discount** — e.g., 1.5% instead of 2% for the investment period.
* **Priority co-investment rights** — first-close LPs get first look at co-invest opportunities alongside the fund.
* **MFN rights** — automatic right to elect into any better terms granted to subsequent LPs.

These terms are captured in the LP's subscription document and any negotiated side letters. Gildi applies the correct fee percentage per LP automatically based on their admission close.

## Relationship to Subsequent Closes

When a new LP joins at a [subsequent close](/fund-mechanics/subsequent-close.md), the first close date is the implicit start of the fund's economic history. The equalization calculation sweeps every capital call from first close onward and charges the new LP their pro-rata share plus interest.

## How Gildi Records First Close

Gildi stores the first close as a dated event on the fund. It is set once during fund setup and cannot be changed without a data migration. All capital call timelines, fee calculations, and LP dashboards display dates relative to this anchor.


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