Business Terms Glossary

Capital Call

Definition of Capital Call

Capital Call is the legal right of a firm to call, or demand, money promised by an investor in a previous capital commitment.

A capital call is sometimes referred to as a "draw down." For example, a venture capital fund might approach its investors in order to "draw down" the money that they need to make an investment.

The money provided via a capital call will already have been committed to the fund. The capital call is simply the act of actually conveying the promised funds to the the investment target. Terms for a capital call are defined in a contract known as a capital call agreement.

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Business Glossary