My clients coming to me for private funds typically know what kind of fund they want to form, a hedge fund, a private equity fund, there are search funds, real estate funds, and opportunity zone funds. I can help them decide, is Minnesota LLC better, or a Delaware Limit Partnership, and get that formed. But I also help them with offering documents to raise money, which is key. The trend right now is to use a short form subscription agreement with some risk factors and use the funds, pitch deck, or PowerPoint with the summary of terms and do that in a really efficient way for them.
I also help funds navigate the regulatory landscape. To be a private fund means that you’re not regulated. Private under securities laws, under the investment advisor laws and the Investment Company Act, many funds many people are familiar with, doing a private offering, but these other laws are complex and have changed significantly in recent years. Minnesota, like many other states, has limited the exemptions for private investment advisors. So I help my clients figure out, do they need to only sell to qualified purchasers or do they need to file Form PF. There’s a lot that goes into the structure and thinking about that.
I could also help an investor look at the documents in a private fund and help them understand and walk them through what it means or if the terms are standard in the market. Recently, I helped a startup form a 50 million venture capital fund focused on black, Latino, and indigenous tech companies. So that’s a great example of when I got involved and the whole process of the type of entity and raising money and all of the regulatory aspects. Are you interested in learning more about private funds and how they might benefit your business? Please contact Avisen Legal today for more information!