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Fund of Funds LP Look-Through

How do Fund of Funds get around the SEC look-through rules for investment companies? Say a FoF has 30-40 LPs and is structured as an LLC, wouldn't the SEC look through the fund entity and count each of the FoF investors as an investor in the fund? If so that would drastically reduce the number of investors they could have on their cap table. 
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Answered by

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Generally speaking, venture funds do not structure themselves as LLCs - we typically see the following multi-entity structure for Delaware domiciled funds:
  • Management Company - LLC
  • General Partner entity - LLC
  • Fund - Limited Partnership

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Answered by

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Are Limited Partnerships not subject to the look-through rules that LLCs are? 
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Answered by

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They are subject to the look-through rules but LPs can have up to 249 investors. We would not recommend having this many as detailed in the article Haw shared above.

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