The Complete Fund Operations Checklist: From Formation to First Close

Launching a venture fund is equal parts investing and operations. Most emerging managers underestimate the operational complexity — the legal filings, banking relationships, compliance requirements, and administrative infrastructure that need to be in place before you can accept a single dollar of LP capital.

This checklist covers every operational step from the moment you decide to raise a fund through your first LP close. It's organized chronologically, so you can work through it in order. Items marked with a timeline indicator should be started early — they have long lead times.

Phase 1: Pre-Formation (Weeks 1-4)

Before you file any paperwork, you need to make several foundational decisions that will shape everything downstream.

Legal Structure Decisions

• Choose your fund domicile state. Delaware is the default for institutional LPs. Wyoming and Nevada are alternatives for smaller funds. Your choice affects fees, reporting requirements, and LP expectations.
• Decide on fund structure. Most VC funds use a Delaware Limited Partnership (LP) with a separate General Partner entity (LLC). Some emerging managers use a single LLC structure for simplicity.
• Select a fund name. Check availability with the Delaware Division of Corporations. Avoid names that imply guarantees or mislead about strategy.
• Determine GP entity structure. Will the GP be an LLC? Who are the managing members? How is carry split among GPs?
• Establish fund terms. Target fund size, management fee (typically 2%), carried interest (typically 20%), hurdle rate, fund life (typically 10 years + extensions), and GP commitment (typically 1-2% of fund size).

Legal Counsel

• Hire a fund formation attorney. Budget $15,000-$40,000 for Fund I. Get referrals from other emerging managers, not corporate attorneys.
• Define scope of legal work. At minimum: LPA, subscription agreement, side letters, PPM (if needed), GP operating agreement.
• Negotiate fee structure. Some fund attorneys offer deferred fees or reduced rates for Fund I managers. Ask.

Compliance Planning

• Determine SEC registration requirements. Most emerging managers qualify for the Exempt Reporting Adviser (ERA) exemption if managing under $150M. File Form ADV with the SEC.
• Identify state registration requirements. Some states require notice filings even for ERA-exempt advisers.
• Plan for AML/KYC compliance. As of 2026, fund managers must implement anti-money laundering programs. Budget for compliance software or a compliance consultant.
• Assess ERISA considerations. If accepting capital from pension funds or retirement plans, you may need to limit plan assets to under 25% of fund commitments.

Phase 2: Entity Formation (Weeks 4-8)

Fund Entities

• Form the General Partner LLC. File Certificate of Formation in your chosen state. Cost: $90-$500 depending on state.
• Form the Fund LP. File Certificate of Limited Partnership in Delaware (or chosen state). Cost: $200 in Delaware.
• Obtain EINs. Apply for Employer Identification Numbers for both the GP LLC and the Fund LP. This can be done online at IRS.gov — takes 10 minutes.
• Draft and execute the GP Operating Agreement. Defines economics among GPs, decision-making authority, removal provisions.
• Draft the Limited Partnership Agreement (LPA). The core fund document. Defines fund terms, GP authority, LP rights, distribution waterfall, key person provisions.

Banking & Financial Infrastructure

• Open GP bank account. You'll need the EIN and formation documents. Silicon Valley Bank, First Republic, and Mercury are popular choices for fund managers.
• Open Fund LP bank account. Separate from the GP account. This is where LP capital commitments are deposited.
• Set up accounting software. QuickBooks for GP expenses. Fund-level accounting typically requires specialized software (Carta, Juniper Square, or Allvue).
• Hire a fund administrator. They handle capital calls, distributions, NAV calculations, K-1 preparation, and investor reporting. Budget $15,000-$50,000/year depending on fund size.
• Select an auditor. Required annually for most institutional LPs. Budget $15,000-$30,000/year for a fund audit. Big Four is unnecessary — regional firms with fund audit experience are fine.

Phase 3: Compliance & Registration (Weeks 6-10)

• File Form D with the SEC. Required within 15 days of your first sale of securities (first LP commitment). Most funds rely on Rule 506(b) or 506(c) of Regulation D.
• File state blue sky notices. Required in states where your LPs are located. Your attorney or a filing service can handle this.
• File Form ADV (if ERA). Exempt Reporting Advisers must file a limited Form ADV with the SEC.
• Implement compliance policies. At minimum: code of ethics, personal trading policy, insider trading policy, privacy policy.
• Set up compliance calendar. Track filing deadlines: Form ADV annual amendments, Form PF (if applicable), state notices, fund audit deadlines.
• Establish a compliance manual. Document all policies and procedures. This is increasingly expected by institutional LPs during due diligence.

Phase 4: Fundraising Infrastructure (Weeks 6-12)

Data Room

• Build your LP data room. Use a secure platform (Carta, DocSend, Google Drive with restricted access). Include: PPM/pitch deck, LPA, subscription agreement, GP bios, track record, fund economics model.
• Prepare a Private Placement Memorandum (PPM). Not legally required for 506(b) offerings to accredited investors, but increasingly expected by institutional LPs.
• Create your LP pitch deck. 20-25 slides covering thesis, team, track record, fund economics, portfolio construction, and market opportunity.
• Prepare a fund one-pager. The leave-behind for LP meetings. Fund name, thesis, team, economics, contact information.

CRM & Pipeline

• Set up an LP CRM. Track every LP interaction, follow-up dates, commitment status. Affinity, HubSpot, or even a well-structured Notion database.
• Build your target LP list. Categorize by type (family office, fund of funds, endowment, HNW individual), location, check size, and likelihood to invest.
• Draft outreach templates. Warm intro requests, cold outreach, follow-up sequences, meeting confirmation, post-meeting thank you.

Phase 5: Pre-Close Operations (Weeks 10-16)

• Finalize the LPA with counsel. Incorporate any LP-specific requests or side letter terms.
• Prepare subscription documents. The packet each LP signs to commit capital. Includes subscription agreement, accredited investor questionnaire, AML/KYC forms.
• Set up capital call procedures. Work with your fund administrator to establish the process for calling capital from LPs.
• Establish wire transfer protocols. Set up bank wire instructions, dual authorization for outgoing wires, and reconciliation procedures.
• Create investor reporting templates. Quarterly reports, annual letters, capital account statements. Set expectations with LPs on reporting frequency and format.
• Set up portfolio monitoring. Spreadsheet or software to track investments, valuations, ownership percentages, and follow-on reserves.

Phase 6: First Close (Week 16+)

• Execute subscription agreements. Collect signed documents and accredited investor certifications from each LP.
• Complete AML/KYC checks. Verify identity of all LPs. This is now a legal requirement for fund managers.
• Issue capital call notices. Call the initial capital (typically 100% at first close for smaller funds, or a percentage for larger funds).
• Confirm wire receipts. Reconcile all incoming wires against subscription amounts.
• File Form D amendment. Update the SEC filing to reflect the actual amount raised.
• Send welcome communications to LPs. Confirm their commitment, provide contact information, set expectations for first quarterly report.
• Begin investing. You're operational. Start deploying capital according to your thesis and portfolio construction plan.