Raising and closing
Most favoured nation clause
Also known as MFN
A right for an LP to choose better terms that the manager gave to another LP.
MFN rights are normally tiered by the size of the commitment, so an LP can elect terms given to investors of equal or smaller size. It keeps terms fair across investors.
Why it matters when you raise
Every concession to one LP may have to be offered to others, so plan what you agree to.