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Fund Operations

While prospective fund managers are fundraising (but before funds are formed and operational), how do they make arrangements with advisors, venture partners, or other similar types of personnel?

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Answered by

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Fund managers can discuss future arrangements verbally - however they should refrain from making any promises or commitments (verbal, written, or otherwise).

Particularly, fund managers should sign NOTHING - as a general matter, legal agreements cannot be signed on behalf of fund entities that do not exist. This goes for any investments intended to be warehoused as well - a prospective fund manager must sign those as an individual or on behalf of a wholly-owned entity the fund manager will invest out of.

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