INVEST Act Clears House, Pending Senate Approval
More than a decade after the JOBS Act, Congress is moving to cut the remaining red tape that holds back early-stage investment. The INVEST Act proposes significant…
Forming a fund involves more than forming an entity. The sponsor has to choose a structure investors will accept, set the economics and governance between the manager and the investors, and raise money within the exemptions securities laws allow.
We work with sponsors of venture capital, private equity and other private investment funds, including first-time managers launching their first vehicle.
Attorney
What We Handle
Fund Structure
Choosing the vehicle, often a limited partnership or LLC, along with the general partner and management company.
Offering Documents
Private placement memoranda, subscription agreements and investor questionnaires.
Governing Agreements
Limited partnership or operating agreements that set the economics, governance and investor rights.
Securities Compliance
Offering exemptions, Form D and state notice filings, and the fund's status under investment company and adviser rules.
Side Letters and Investor Terms
Negotiated terms with individual investors, documented consistently.
Ongoing Support
Investor communications, later closings, filings and governance questions after launch.
Getting the Terms Right
Investors compare a fund's terms against the market: the management fee, carried interest, hurdle, the general partner's commitment, key person provisions and how long the fund can invest. We help sponsors set terms that are attractive to investors and workable for the manager, and we document them consistently across the fund agreement, the PPM and any side letters.
Compliance That Lasts
A fund's exemptions depend on how it raises money and who invests, so compliance continues after the first closing. We help managers keep offering practices, investor eligibility and filings in order as the fund grows.
How a Fund Comes Together
Planning
We discuss the strategy, target investors, fund size and the terms the market expects.
Formation
The fund, general partner and management company are formed and documented.
Offering Materials
The PPM, fund agreement and subscription documents are drafted.
Compliance
We confirm the offering and investment company exemptions and the manager's adviser status.
Fundraising and Closings
Investors subscribe, and the fund holds its first and later closings.
Operations
Capital calls, reporting and filings continue for the life of the fund.
Frequently Asked Questions
Have a question that isn't answered here? Call us at (817) 631-8842 or send a message.
Ask a QuestionWhat structure do most private funds use?
Many funds are formed as limited partnerships, with the sponsor's entity serving as general partner and a separate management company receiving the management fee. Some funds use LLCs instead. The choice depends on investor expectations, taxes and the fund's strategy.
Who can invest in a private fund?
Most private funds limit investors to accredited investors, and some limit them further to qualified purchasers. The exemptions the fund relies on under federal securities law decide who can invest and how many investors the fund can have.
Does the fund manager need to register as an investment adviser?
It depends on the manager's assets under management, the types of funds it advises and where it operates. Some managers qualify for federal exemptions but still must file reports, and state rules can apply as well. We review the manager's status as part of forming the fund.
What is a private placement memorandum?
A PPM is the offering document that describes the fund's strategy, terms, fees, risks and conflicts of interest. It isn't always legally required, but it gives investors the information they need and helps protect the sponsor from claims that something important wasn't disclosed.
More in Startups, Entity Formation, and Venture Capital
- Startups and Venture CapitalFormation, founder equity and fundraising for emerging companies.Learn More
- SAFEs and Convertible NotesEarly-stage financings that turn into equity at the next priced round.Learn More
- Priced Equity RoundsSeries Seed and Series A preferred stock rounds, on the company side.Learn More
- Securities ComplianceExemptions, offering documents and filings for private capital raises.Learn More
- Founder Equity and VestingFounder stock, vesting, IP assignments and the first cap table.Learn More
- Equity CompensationOption plans, restricted stock and profits interests for employees and advisors.Learn More
- Business Entity FormationChoosing and forming the right entity, with documents that fit the owners.Learn More
- Operating Agreements and Formation DocumentsCompany agreements, partnership agreements and shareholder agreements.Learn More
- Entity ConversionsChanging entity type or home state without starting a new company.Learn More
- Shareholder and Buy-Sell AgreementsTransfer limits, buyout triggers and pricing terms the owners agree on in advance.Learn More
- Dissolution and Wind-UpWinding up and terminating a Texas LLC or corporation the right way.Learn More
Related Articles
Convertible Notes 101: A Founder's Guide to Startup Funding
This article demystifies convertible notes for early-stage founders, explaining how the instrument converts short-term debt into equity and unpacking key terms such…
SAFE 101: A Founder’s Guide to Simple Agreements for Future Equity
Learn how SAFEs can streamline your early-stage fundraising strategy. This quick guide provides startup founders with an overview of Simple Agreements for Future…
Request a Consultation
Initial consultations are held by Zoom and typically last 20 to 30 minutes.