The absolute minimum of a 1st closing needs to be $1m+ or 10% of the fund, whichever is larger. We strongly advise against closing on less then $1m because it will be very difficult to get the fund operational upon the first capital call which should be 25% or less. 

If the manager were to do 25% capital call on $500k, this does not give the manager enough money to invest in enough companies, draw down management fees and pay organizational expenses.