Practice / 03 of 05

Fund Formation and Private Securities

For sponsors forming a first fund or a fifth, and for any company raising capital privately.

Part 01Sponsor-side formationFrom the general partner chain to the closing set. Part 02The fund suiteA complete fund document set, for a fixed fee, on a stated timetable. Part 03Private securitiesOfferings, verification and finder programs.
The practice

The first fund sets the terms for every fund after it.

The documents a sponsor signs for a first fund are the ones the second fund inherits. If the general partner chain, the management structure, the exemptions and the waterfall are right the first time, the second fund starts from a schedule rather than a blank page.

We form funds sponsor-side across asset classes that have little in common, from compute infrastructure to conventional venture, because the structure travels even when the asset does not.

Some clients are not forming a fund at all: a company running its first private round or a sponsor who needs one SPV.

Principals General partner entity Management company · Investment manager U.S. taxable investors Feeder blocker Tax-exempt and non-U.S. Operating assets and portfolio The Fund the sponsor team holds the carry, allocated inside it one entity or two; the investment manager registers when the assets require it Delaware limited partnership · 3(c)(1) or 3(c)(7) offered under Rule 506(b) or 506(c) at the fund’s investor tier a corporation; blocks UBTI, ECI investors, at the same tier operating income, portfolio-level leverage own own GP commitment carried interest advises under the IMA management fee, base then step-down commitments side letters as a single LP commitments held directly by the fund Principals the sponsor team own General partner holds the carry, allocated inside it Manager management company and investment manager, one entity or two ↓ GP commitment ↑ carried interest advises under the IMA ↓ management fee ↑ The Fund Delaware limited partnership · 3(c)(1) or 3(c)(7) offered under Rule 506(b) or 506(c) commitments as a single LP held directly U.S. taxable investors Feeder blocker a corporation Operating assets and portfolio commitments Tax-exempt and non-U.S.
The chain the second fund inherits. Tax-exempt and non-U.S. investors can come in through a blocker above the fund.
Selected matters

Sponsor-side and issuer-side.

Fund formation

Sponsor-side formation of an AI compute infrastructure fund raising up to $900 million: the full document set, a Rule 506(c) offering to qualified purchasers under Section 3(c)(7), a whole-fund European waterfall with clawback, and an investment manager positioned for SEC registration.

Fund platform

Multi-fund platform for a private capital group: a complete sponsor-side suite for its first fund, with the finder, introducer and non-circumvention program behind a raise across the United States, the Gulf and Africa.

Offering conversion

Conversion of a private offering from Rule 506(b) to 506(c) general solicitation, with a verification regime built on minimum-investment thresholds and investor self-certification under the SEC’s March 2025 no-action guidance.

The full list for this practice is on the Selected Work page.

Part 01

Sponsor-side formation: the decisions, then the documents.

Before anything is drafted, a first fund is a set of decisions: how the general partner is held, whether the manager is one entity or two, which investor tier the fund is built to, when the adviser will have to register, and how the economics are set so they survive the anchor negotiation. We settle those with the sponsor first, then draft to them.

What we paper
  • Private placement memoranda and limited partnership agreements
  • General partner, management company and investment management agreements
  • Subscription documents, investor questionnaires and side letters
  • Key-person, for-cause removal and successor-fund terms
  • Parallel vehicles and single-asset SPVs beneath the fund
  • Related-party approval and indemnification architecture for sponsor-owned chains
  • Adviser registration positioning and the exemption analysis behind it
Part 02

The fund suite.

For an emerging manager, the suite is every document a closed-end fund needs, built from a form set we have used across asset classes, with the economics in one schedule. The scope is defined before the engagement letter is signed, the fee is fixed, and the timetable is stated.

What is in it

  • Private placement memorandum
  • Limited partnership agreement
  • General partner and management company agreements
  • Investment management agreement
  • Subscription agreement and investor questionnaire
  • Side letter form and most-favored-nation mechanics
  • Form D and state notice filings

How it runs

  1. Structure session: the decisions above, made in one sitting.
  2. Term sheet: structure and economics on two pages, for the sponsor to circulate.
  3. Full draft set, built to the term sheet.
  4. Two revision rounds with the sponsor, then anchor-investor comments.
  5. Closing: subscription mechanics, verification and filings.

Timetable

Six to eight weeks

From the structure session to a closing-ready set, assuming the sponsor turns comments inside a week.

Fee

Fixed, quoted on the first call

Specialist tax and offshore counsel are scoped separately and brought in only where the structure needs them.

The set has been tested on earlier funds, so a sponsor gets a version that has already been argued over. A written statement of the suite’s scope is available on request.

Part 03

Private securities: offerings, verification and finders.

Around every raise sit the securities questions that determine how it can run: Rule 506(b) or 506(c), how investors are verified, bad-actor diligence and the filings that follow. Raises that reach the Gulf or Africa run Regulation S alongside Regulation D, with local placement rules and introducer terms settled country by country.

What we paper
  • Rule 506(b) and 506(c) offerings, and conversions between them
  • Accredited-investor verification regimes
  • Finder, introducer and non-circumvention agreements
  • Placement and capital-introduction arrangements across jurisdictions
  • Bad-actor diligence and notice filings
Where it starts

How this work usually begins.

  1. A sponsor with a term sheet from an anchor investor and no fund yet.

  2. An emerging manager whose administrator has said to get the documents right before the first close.

  3. A fund that started under 3(c)(1) with a target that no longer fits inside it.

  4. A sponsor choosing between 506(b) and 506(c) before the deck goes out.

  5. A private capital group that pays introducers and wants the program to survive a regulator’s reading of it.

If yours starts somewhere else, it is still worth a conversation.

Writing on this practice

What the matters taught us.

What a First-Time Fund Sponsor Gets Wrong in the First Thirty Days

In preparation

Rule 506(c) for Companies and Funds: What General Solicitation Actually Costs You

In preparation

What each piece argues is on the Writing page.

Ask for the fixed fee on the first call.

Tell us the asset class, the target size and who is anchoring. You will leave the call with a structure, a timetable and a number.

Get in touch The fund suite
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