How to Structure Your First Private Fund: A Legal Checklist

August 2024

Starting your own private fund is a major milestone — and an exciting one. Whether you're launching a hedge fund, venture vehicle, or private credit platform, it’s easy to get caught up in the investment strategy and overlook the legal structure that holds it all together.

But even a small fund with a handful of investors needs a carefully built framework to avoid regulatory missteps, manage investor expectations, and scale efficiently. At Moeller Law PLLC, we act as outsourced general counsel to emerging fund managers, providing integrated legal support while also coordinating with specialists in fund law, tax, accounting, operations, and finance to deliver a complete solution.

1. Choose the Right Legal Entity

Most private funds are structured as limited partnerships or LLCs, with a separate management entity to handle decision-making and fee arrangements. The fund entity serves as the vehicle for investor capital, while the management company is responsible for advising the fund and overseeing operations.

As outsourced counsel, Moeller Law PLLC helps you select the right entity structure, prepare initial formation documents, and work with fund-specific legal and tax experts if needed to address state selection, investor limitations, and manager participation structures.

2. Prepare a Clear and Custom Private Placement Memorandum (PPM)

The PPM is the cornerstone of your offering. It discloses your investment strategy, risks, fee structure, conflicts of interest, and withdrawal terms. Even if your investors are close contacts or strategic partners, you still need a professional disclosure document that documents the offering thoroughly and reduces risk of future disputes.

We oversee the preparation of a customized PPM based on your investment goals, using advanced drafting tools and fund-specific clause libraries. If the strategy or asset class calls for it, we coordinate with specialized fund counsel to ensure the language matches current market and regulatory expectations.

3. Form and Structure the Management Company

The management company receives compensation from the fund and is responsible for the fund’s daily operations, compliance, and investor communication. If there are multiple principals or partners, an operating agreement should clearly define profit sharing, control, and exit provisions.

Moeller Law PLLC drafts and negotiates these agreements while also helping coordinate across your advisory, accounting, and operational teams to ensure the documents align with your fund’s back-office setup, compliance requirements, and long-term structure.

4. Set Up Subscription Documents

Your investor onboarding process needs to be smooth, professional, and compliant. That means having the right subscription agreement, investor questionnaire, and fund operating documents in place — all designed to confirm investor eligibility and document the terms of the investment.

We help prepare subscription packages tailored to your investor base and offering structure. Where appropriate, we collaborate with compliance teams, fund administrators, or fund counsel to ensure consistency with KYC, AML, and capital call procedures.

5. Comply with Securities Exemptions and File Form D

Most private funds rely on Regulation D for exemption from SEC registration, typically under Rule 506(b) or 506(c). After your first investor commits, you must file a Form D with the SEC, and also meet “blue sky” filing obligations in each state where you have investors.

Moeller Law PLLC manages the Form D and state filings directly for clients and helps track deadlines and filing windows. We also coordinate with regulatory counsel and filing services, when appropriate, to ensure all compliance steps are handled accurately and efficiently.

6. Assess Investment Adviser Registration or Exemption

If the management company is advising the fund for compensation, you are likely considered an investment adviser under federal or state law. Many emerging managers rely on the private fund adviser exemption or file as exempt reporting advisers (ERAs), but this analysis requires careful jurisdiction-specific review.

We guide managers through this process and evaluate available exemptions. Where necessary, we bring in state-specific regulatory counsel or compliance consultants to assist with notice filings, policies and procedures, and internal compliance controls.

7. Plan for Ongoing Compliance

Even single-fund managers have ongoing responsibilities, including annual Form D amendments, blue sky renewals, investor tax reporting, and maintaining compliance with investment adviser obligations. These tasks can vary depending on jurisdiction, investor type, and fund strategy.

Moeller Law PLLC supports this ongoing compliance effort by serving as the legal point person across your internal and external teams — including fund administrators, accountants, and compliance partners. We can stay involved month-to-month or provide annual check-ins depending on your fund’s size and complexity.

Launching your first private fund requires more than just a good pitch deck and a brokerage account. You need a structure that can support investor trust, meet legal requirements, and grow with your strategy. Moeller Law PLLC provides flexible legal support and coordination across your fund’s full ecosystem — from legal docs to compliance to operations — so you can stay focused on performance.

Thinking about launching a fund? Let’s talk.