Making a capital call of more than the recommended 25% on the first close can create challenges for closing later Limited Partners (LPs), as they will have to adhere to the higher capital call schedule. This could make it more difficult to attract new LPs who may not be prepared for such a high initial capital commitment, potentially hindering the fund's ability to reach its target size.
2 answers
The issue with doing a high capital call on the first close of say 30%+ is that all future LPs post the 1st close will also need to wire 30% to catch up. This is not a major point of friction with high net worth individuals that are investing <$500k. However, once you get into the $1m+ level institutional LPs, the high initial capital call can become a problem because they are just not used to investing this much upfront. It also may indicate that you're not managing the capital super well since having a good amount of extra money in your bank account for an extended period affects your metrics.
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