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When raising a fund, is it okay to require an LP or Venture Partner to bring on another LP before including them in the fund closing? I understand that Venture Partners cannot be compensated based on money raised due to broker-dealer regulations but this seems diffferent

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Answered by

Community Member

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It's ok to encourage LPs and VPs to make introductions to LPs. There is no way to require any LP or VP to have one of their connections invest in the fund, however. 
1

Answered by

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I see. So, if we do have an potential LP--who has signed an LP pact--that wants to be a VP, is it fine for us to ask them to bring in an additional LP before we make them a Venture Partner at closing? 
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Answered by

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No. That's quid pro quo and turns it into a broker dealer situation. 
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Thanks

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