Key Documents Every Emerging Fund Needs
Launching an investment fund requires more than raising capital and sourcing deals—it demands a well-structured legal and operational foundation. For emerging fund managers, establishing the right documentation is essential for regulatory compliance, investor confidence, and long-term scalability. From fundraising to fund governance and reporting, each document plays a critical role in protecting the fund and its stakeholders.
This article outlines the essential legal documents every emerging venture capital, private equity, or real estate fund must have in place.
1. Private Placement Memorandum (PPM)
The PPM is a disclosure document that provides prospective investors with detailed information about the fund. It typically includes:
Investment strategy and objectives
Risk factors and disclaimers
Fund structure and terms
Fee and expense schedules
Legal and tax considerations
While not legally required under all exemptions, a well-drafted PPM helps mitigate liability and satisfies antifraud disclosure obligations under federal and state securities laws.
2. Limited Partnership Agreement (LPA)
The LPA is the governing contract between the general partner (GP) and the limited partners (LPs). Key provisions include:
Capital commitments and capital calls
Distribution waterfalls and carried interest
Management fee structure
Voting rights and consent thresholds
Withdrawal, transfer, and dissolution procedures
The LPA defines how the fund operates and resolves internal disputes. It is the most critical document from a governance perspective.
3. Subscription Agreement
This agreement formalizes the investor’s commitment to the fund. It includes:
Representations and warranties from the investor
Acknowledgment of risk disclosures
Certifications of accredited investor status
Wire instructions and capital call procedures
It serves as a legal contract between the LP and the fund entity and ensures compliance with Regulation D and other offering exemptions.
4. Form ADV and Investment Adviser Compliance Documents
If the fund manager is a registered investment adviser (RIA) or exempt reporting adviser (ERA), they must file and maintain:
Form ADV Parts 1 and 2
Compliance manual and code of ethics
Policies on personal trading, gifts, political contributions, and conflicts of interest
These documents support the fund's compliance framework and prepare the manager for regulatory audits.
5. Operating Agreement (for Management Company)
The management company’s LLC operating agreement outlines:
Ownership and profit-sharing among partners
Voting and management rights
Capital contributions and distributions
Buy-sell and exit provisions
It governs the entity that earns management fees and is distinct from the fund vehicle.
6. Side Letters
Side letters are supplemental agreements negotiated with specific LPs, often institutional investors. These may provide:
Modified fee terms
Additional reporting rights
Co-investment opportunities
Most Favored Nation (MFN) clauses
Ensure that side letters are tracked and managed to avoid unintended inconsistencies with the LPA.
7. Blue Sky Filings and Form D
To comply with federal and state securities laws, most private offerings must file:
Form D with the SEC under Regulation D
State-specific Blue Sky filings in jurisdictions where investors reside
These filings notify regulators of the offering and help maintain exemption status.
8. Marketing and Fundraising Materials
Ensure that all pitch decks, investor letters, and due diligence questionnaires (DDQs) are:
Accurate and consistent with fund documents
Reviewed for compliance with antifraud provisions
Updated as terms or risk disclosures evolve
Avoid including guarantees, projections, or forward-looking statements without appropriate disclaimers.
Emerging fund managers must prioritize legal and operational rigor from day one. The right documentation ensures regulatory compliance, enhances investor transparency, and minimizes the risk of disputes or enforcement actions.
If your firm is launching a fund or needs assistance drafting or reviewing key fund documents, contact our firm at 786.461.1617 for a consultation. Our attorneys provide comprehensive legal counsel to help you structure and scale your fund with confidence.