Fund of Funds Checklist

Have investors but don’t have a deal? This structure is useful for people who know investors but either don’t have deals or want to invest in others’ deals. Here’s a checklist for a “Fund of Funds.”

Sponsor Sets up Their Own Fund:

  • Uses U.S. or offshore legal entity (Cayman Islands or BVI – based on tax advice from a separate CPA or tax attorney with international experience)
  • Qualifies for Regulation D, Rule 506(c) exemption for U.S. investors and Regulation S exemption for non-U.S. investors
  • Limits fund to <100 investors or becomes subject to “registered investment company” regulations
  • Sponsor does anti-money-laundering and bad-actor checks
  • Sponsor reviews Subscription Agreements to make sure everyone meets the suitability requirements for the offering 
  • If your fund will invest in Rule 506(c) offerings, all of your investors must be accredited investors:
    • >$1MM net worth, or 
    • >$200k/year income for an individual or $300k/year income for married couple or spousal equivalents
  • The Fund Manager earns from its fund: 
    • Flat fee, but not based on the amount of money raised
    • Plus a share of the Fund’s earnings (ex. 20%)

Sponsor Hires Securities Attorney to:

  • Form their U.S. legal entities and/or coordinates with offshore counsel for offshore legal entities, if needed
  • Draft Private Placement Memorandum (required if you have non-accredited investors; recommended if you will more than 3-4 Accredited investors or if you are advertising)
  • Draft Operating Agreement for the investor entity and for the Manager entity (if needed), and
  • Draft Subscription Agreement (includes investment risks if no PPM)
  • File notices with SEC and state securities agencies
  • Provide education to the Manager about their exemption so they comply with securities laws
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Are you ready to raise private capital?

At Syndication Attorneys LLC, we are committed to your success – book a consultation with one of our team members today!

Are you ready to raise private capital?

At Syndication Attorneys LLC, we are committed to your success – book a consultation with one of our team members today!

About Syndication Attorneys

We are NOT your stereotypical law firm. We don’t believe in simply taking your money, handing you a stack of technical, often-incomprehensible legal documents and then bidding you good luck and good-bye. At Syndication Attorneys PLLC, we are committed to your success – not just with the project at hand, but your continuing success in business and investing. We are your long-term legal team.

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Are you ready to raise private capital?

At Syndication Attorneys LLC, we are committed to your success – book a consultation with one of our team members today!