Venture Legal

Cap table adjustments for the ManCo are managed by the firm’s legal counsel. There are no short cuts here because mistakes in this are have severe consequences and are often fatal. We dedicate significant time to cap-tables during Decil...

Cap table adjustments for the ManCo are managed by the firm’s legal counsel. There are no short cuts here because mistakes in this are have severe consequences and are often fatal. We dedicate significant time to cap-tables during Decile Launch since the consequences are so severe. The most critical component is that you must be extremely careful about whom has ownership in the ManCo. Owners of the ManCo have ownership in all future funds. Therefore you must avoid giving ownership to people or entities or investors who are not build the Firm with you over multiple funds.

Generally speaking, venture fund advisors (management companies and the underlying individuals in the standard Decile structure, registered as Exempt Reporting Advisors) are exempt from BOI reporting so long as they 1) meet certain crite...

Generally speaking, venture fund advisors (management companies and the underlying individuals in the standard Decile structure, registered as Exempt Reporting Advisors) are exempt from BOI reporting so long as they 1) meet certain criteria and 2) make certain filings. You may find this article generally helpful regarding this topic.  With respect to the GP Entity, if it is an entity controlled by a venture fund advisor, it is generally exempt as well. A Limited Partnership is also generally exempt from BOI reporting so long as it is a pooled investment vehicle, as defined by FINCEN. 

We typically strongly advise against a deal by deal arrangement due to the complexity of managing this arrangement. 

We typically strongly advise against a deal by deal arrangement due to the complexity of managing this arrangement. 

That is usually the managing partner.

That is usually the managing partner.

A priced round will convert the SAFEs. In addition, because you're the largest investor, you do have some leverage. Usually, the best thing to do is to hash this out with the founding team 1st. For example, you can get them to agree to d...

A priced round will convert the SAFEs. In addition, because you're the largest investor, you do have some leverage. Usually, the best thing to do is to hash this out with the founding team 1st. For example, you can get them to agree to do a priced round to convert the SAFEs and to introduce a board as well during this process. 

Asian investors often prefer to invest in US-domiciled funds due to the favorable regulatory environment and established legal framework. Delaware is a popular choice for fund domicile due to its well-developed corporate laws and investo...

Asian investors often prefer to invest in US-domiciled funds due to the favorable regulatory environment and established legal framework. Delaware is a popular choice for fund domicile due to its well-developed corporate laws and investor protections. Given your investor demographic, a US domicile, particularly Delaware, would likely be the most favorable regulatory regime. This choice balances the interests of both US and Southeast Asian investors, providing a familiar and trusted legal environment. Having said that, the manager and the investors should consider the tax implications of any fund structure.

To ensure your contract protects the jurisdictions, the Mensarius Oath, and prevents LPs from overriding or taking over the fund for their own interests, follow these steps: 1. **Jurisdictions**: Work with experienced legal counsel to e...

To ensure your contract protects the jurisdictions, the Mensarius Oath, and prevents LPs from overriding or taking over the fund for their own interests, follow these steps: 1. **Jurisdictions**: Work with experienced legal counsel to ensure compliance with all relevant jurisdictional regulations and include specific clauses addressing these requirements in your LPA. 2. **Mensarius Oath**: Explicitly reference the Mensarius Oath in your LPA and outline the ethical standards and practices that the fund will adhere to. 3. **Fund Control**: Include provisions in the LPA that limit LPs' ability to override or take over the fund, such as requiring unanimous consent for major decisions and clearly defining the roles and powers of the General Partner. Consult with legal experts to draft and review these provisions to ensure they are robust and enforceable.

This article outlines the Venture Studio stricture and entities: https://govclab.com/2023/04/25/how-to-build-a-venture-studio/ The set-up of the Venture Studio as a C-corp or an LLC depends on your strategy. If you are planning to take ...

This article outlines the Venture Studio stricture and entities: https://govclab.com/2023/04/25/how-to-build-a-venture-studio/ The set-up of the Venture Studio as a C-corp or an LLC depends on your strategy. If you are planning to take investment into the Studio itself, including from the Studio fund, then it might be best to set it up as a C-corp. Otherwise, the Studio will commonly be an LLC. The portfolio companies are commonly all C-corps, allowing them to easily take outside investment. 

It's unlikely that a domain would be the deciding factor whether or not something is classified as General Solicitation (or its equivalent) in Australia. We recommend reaching out to local fund experts for guidance. 

It's unlikely that a domain would be the deciding factor whether or not something is classified as General Solicitation (or its equivalent) in Australia. We recommend reaching out to local fund experts for guidance. 

They can. Typically the law firm partner will evaluate if there is a conflict and recommend the next steps. Often they will recommend that someone else in their firm lead the project. 

They can. Typically the law firm partner will evaluate if there is a conflict and recommend the next steps. Often they will recommend that someone else in their firm lead the project. 

Consider very carefully the following factors while deciding on the allocation of shares between two owners and/or managing partners: • overall contribution; • value (expertise, network, etc.) It is critical to have a clear understandin...

Consider very carefully the following factors while deciding on the allocation of shares between two owners and/or managing partners: • overall contribution; • value (expertise, network, etc.) It is critical to have a clear understanding, as this is a business relationship that must last 10 years minimum, if not 15 or more. It is also important to think carefully about allocating the shares equally between the 2 owners/managing partners. This can create a deadlock situation (depending on certain majority thresholds in the Management Company's operating agreement) where decisions cannot be made quickly and in an efficient manner. It is common for one managing partner to hold a very slight majority in order to facilitate ease of decision making. For those working with Decile Partners, carefully review the Majority of Interests and the Majority of Managers thresholds in the Alignment Agreement as well. 

The separation between the Management Company and the General Partner entity in a Venture Capital firm/fund structure allows for scalability and flexibility. The Management Company owns the brand and intellectual property, and is where t...

The separation between the Management Company and the General Partner entity in a Venture Capital firm/fund structure allows for scalability and flexibility. The Management Company owns the brand and intellectual property, and is where the firm's owners and/or managing partners are located. The General Partner entity, which is majority owned by the Management Company, is where partners managing only one specific fund sit. This structure allows for the addition of new funds under the same firm, facilitating growth and scalability. It also allows for the inclusion of partners or Venture Partners in one specific fund without requiring them to be part of the Management Company. There are other Venture Capital firm structures that use one entity to fulfill both Management Company and General Partner functions, or keep them both but have them separated instead of stacked vertically via ownership. This depends on the particular circumstances of the setup, but will generally have much more complex agreements.   We recommend simplicity and scalability as the default principle whenever possible. 

If a fund manager passes away or is incapacitated, the fund's Limited Partner Agreement (LPA) typically includes language or provisions addressing this event.  For example, in the Cornerstone LPA published by Decile Group, such an event...

If a fund manager passes away or is incapacitated, the fund's Limited Partner Agreement (LPA) typically includes language or provisions addressing this event.  For example, in the Cornerstone LPA published by Decile Group, such an event happening to a "Key Individual" will trigger the fund to enter 'Limited Operations' mode. In this mode, the fund's activities become restricted, it is up to the General Partner entity and the Limited Partners to negotiate to determine what happens next.  The specifics of how this situation is handled can vary depending on the terms set out in the LPA - be sure to read carefully and consult experienced fund counsel for questions regarding a specific set of circumstances. 

If you don't issue all the shares in your Share Pool to Venture Partners, those shares simply remain unallocated. They can be issued at a later date to new Venture Partners or other team members if needed. It's important to note that un...

If you don't issue all the shares in your Share Pool to Venture Partners, those shares simply remain unallocated. They can be issued at a later date to new Venture Partners or other team members if needed. It's important to note that unissued shares from the Share Pool are not considered when calculating distributions or voting - such shares are not issued and/or outstanding for these purposes. Unissued shares are also not automatically re-allocated to the General Partner entity. 

Adding a Venture Partner or another person to your firm's Management Company is a significant decision as it involves sharing ownership and control of the entire firm. This person would then also earn carried interest on all funds under ...

Adding a Venture Partner or another person to your firm's Management Company is a significant decision as it involves sharing ownership and control of the entire firm. This person would then also earn carried interest on all funds under the firm's umbrella. It's recommended to only include individuals in the Management Company who are part of the founding team and will run the firm for a long duration. Remember a Fund will be under management for a minimum of 10 years, and the Firm for far longer - trust and commitment to the long-term goals of the Firm are paramount.  For individuals involved in managing or assisting only one specific fund, it's standard to include them as Venture Partners in the General Partner entity only. 

Venture Partners sit in the General Partner entity of a Venture Capital firm. They are involved in managing only one specific fund and can earn a percentage of the carried interest for that particular fund. They are typically not part of...

Venture Partners sit in the General Partner entity of a Venture Capital firm. They are involved in managing only one specific fund and can earn a percentage of the carried interest for that particular fund. They are typically not part of the Management Company, which is where the firm's owners and/or managing partners are located.

With the popular Venture Capital firm/fund structure used by Decile Partners, scaling a Venture Capital firm is relatively easy. New Venture Capital funds can be spun up under the same Management Company (requiring only a new General Par...

With the popular Venture Capital firm/fund structure used by Decile Partners, scaling a Venture Capital firm is relatively easy. New Venture Capital funds can be spun up under the same Management Company (requiring only a new General Partner entity and a new Limited Partnership). The separation between Management Company and General Partner entity also makes it possible to bring in a partner to work on one specific fund, without the requirement that they are also in the Management Company and earning carried interest on all funds under the firm's umbrella. 

Generally speaking, a Venture Capital firm is a reference to the management entity managing one or more Venture Capital Funds.  A Venture Capital fund is a specific pool of capital that the management company invests.  Venture Capital fi...

Generally speaking, a Venture Capital firm is a reference to the management entity managing one or more Venture Capital Funds.  A Venture Capital fund is a specific pool of capital that the management company invests.  Venture Capital firms typically aim to manage many such pools of capital as they grow and scale.

Decile Partners generally works with and recommends the following standardized and scalable structure for Venture Capital firms/funds (Delaware domicile): • Management Company (ManCo) formed as a limited liability company. This is where ...

Decile Partners generally works with and recommends the following standardized and scalable structure for Venture Capital firms/funds (Delaware domicile): • Management Company (ManCo) formed as a limited liability company. This is where the founders and owners of the Firm sit as managing partners. The ManCo owns the brand, any intellectual property - this is also where vendors and staff (long term) sit.  • General Partner (GP) formed as a limited liability company. This entity is majority owned by the ManCo, receives the carried interest, and is also where any partners managing only one Fund (as opposed to the Firm) sit. Venture Partners earning a % of the carried interest for only one Fund will also sit here. Note that while confusing, "GP" here refers to the entity, not to an individual who may be titled as a "General Partner" separately - be sure to distinguish.  • Limited Partnership (the Fund) formed as a limited partnership. This entity is where the limited partners invest into, and where deployments into portfolio companies come out of. This is also the entity from which distributions flow.  There are other  ways to set up a Venture Capital firm/fund, though structures can become quite complex over time to accommodate the needs of certain investors; for example the manager may set up side vehicles, parallel funds, master-feeder structures, blockers in consideration of tax or other regulatory  issues.

No, the fund origination fees collected from Limited Partners (LPs) that join after the fund is closed do not get redistributed to the initial LPs. These fees are typically used to cover the costs associated with setting up and operating...

No, the fund origination fees collected from Limited Partners (LPs) that join after the fund is closed do not get redistributed to the initial LPs. These fees are typically used to cover the costs associated with setting up and operating the fund, such as legal and accounting fees, and are not redistributed to other LPs.

If an LP unfortunately passes away, said LP's partnership interest will be handled by the arrangements made with respect to the LP's heirs, executors/administrators of an estate, successors, etc. The LP is responsible for setting these u...

If an LP unfortunately passes away, said LP's partnership interest will be handled by the arrangements made with respect to the LP's heirs, executors/administrators of an estate, successors, etc. The LP is responsible for setting these up. The aforementioned arrangements will vary and can be very custom - additionally each country/state may have different regulations and requirements regarding them. Therefore agreements (the LPA for example) generally remain silent on any specifics.

Investors in the ManCo will get carried interest in all future funds. While their investment provides working capital in Fund 1, GPs will grow very resentful should the firm be successful in later funds because they will share carry with...

Investors in the ManCo will get carried interest in all future funds. While their investment provides working capital in Fund 1, GPs will grow very resentful should the firm be successful in later funds because they will share carry with the investor in perpetuity.  In order to raise capital into the ManCo, or the GP, you need to add a valuation for the entity. This will impact the price per share moving forward. 

No, it doesn't work like this. Assume carry is 100%, irrespective of fund size. When you give carry to a VP, it's a % of 100%. So, if you decided to give a VP 5% it will be 5% of 100% of the carry. This has nothing to do with the fund si...

No, it doesn't work like this. Assume carry is 100%, irrespective of fund size. When you give carry to a VP, it's a % of 100%. So, if you decided to give a VP 5% it will be 5% of 100% of the carry. This has nothing to do with the fund size.  Also, the extreme example that you have above is unrealistic. It's common for funds to over-subscribe the target stated on the LPA, but it's not common for funds to over-subscribe by that much nor will LPs be ok with you doing this because it drastically changes their return profile.  So, in practice, it's normal for people to maybe over-subscribe by 50% - 200%, but not 500%.  In the event that you truly had that much more demand from LPs, you would close a Fund 1 and move the rest of the demand into Fund 2.

He can disclose that he is advising your new firm and the time commitment that he will dedicate.

He can disclose that he is advising your new firm and the time commitment that he will dedicate.

A manager may decide to set up a “Parallel Fund” in order to accommodate the needs of certain limited partners that have tax, regulatory or other issues in investing in the primary fund.  For example, a non U.S. limited partner may want...

A manager may decide to set up a “Parallel Fund” in order to accommodate the needs of certain limited partners that have tax, regulatory or other issues in investing in the primary fund.  For example, a non U.S. limited partner may want to take advantage of a certain tax treaty available to them by investing in a Parallel Fund. The Parallel Fund would be set up in a different jurisdiction and would make the same investments as the primary fund, subject to certain exceptions given the issues necessitating the need for the parallel structure.   The Cornerstone includes an optional provision that allows for the manager to set up such a Parallel Fund to accommodate legal, tax, or regulatory considerations of certain investors subject to the requirement that the manager treat all investors in a fair manner as further described in the Cornerstone.   Obviously, a manager should evaluate the costs and administrative burden prior to setting up any Parallel Fund.

The Cayman Islands is an expensive and slow domicile, so it is not recommended to set up funds in the Caymans. A less expensive, less regulated, but also slow domicile is BVI, and Decile Partners can work to set a fund up there. Assume t...

The Cayman Islands is an expensive and slow domicile, so it is not recommended to set up funds in the Caymans. A less expensive, less regulated, but also slow domicile is BVI, and Decile Partners can work to set a fund up there. Assume that it will take four to six months to set up, and assume that you need a $10 MM or greater fund size to cover the various setup fees and annual fund administration expenses.

Generally speaking, a Fund should not enter into a Venture Partner agreement with a company, unless the company is wholly owned by one individual. Services provided to a Fund are typically very personal and delegation is usually unwant...

Generally speaking, a Fund should not enter into a Venture Partner agreement with a company, unless the company is wholly owned by one individual. Services provided to a Fund are typically very personal and delegation is usually unwanted. Attempting to do this also creates additional legal, securities law, and tax complexities.  It is far easier for the Fund to enter into an individual agreement with each relevant person within a company or other type of organization. 

Limited Partners (LPs) are generally not issued units, shares, or any equivalents for their investment into a VC Fund - this is a common misconception. LPs simply own a percentage of the limited partnership's interests.  By design, the...

Limited Partners (LPs) are generally not issued units, shares, or any equivalents for their investment into a VC Fund - this is a common misconception. LPs simply own a percentage of the limited partnership's interests.  By design, the structure of VC Funds makes it very difficult for LPs to pull their money out until there are liquidity events (exits). This is because the capital is directly invested in private companies - money is returned to LPs usually when one of those companies undergoes a liquidity event (acquisition, IPO, etc.). 

Generally speaking, no - but it's complicated. Every country has it's own securities regulations regime (which may also interact with other countries' regimes), and nearly every one imposes restrictions, exemptions, etc. on crowd funding...

Generally speaking, no - but it's complicated. Every country has it's own securities regulations regime (which may also interact with other countries' regimes), and nearly every one imposes restrictions, exemptions, etc. on crowd funding (assuming here that you are referring to general solicitation). For example, you can learn more about 506(c) here (for the USA): https://www.decilehub.com/base/17-fund-operations/1782-what-is-this-506-c-thing-i-keep-hearing-about-should-i-do-it Should you have additional questions regarding your specific domicile and circumstances, we strongly recommend that you consult an experienced attorney who can best advise you. Securities regulations are (depending on the jurisdiction) stringently enforced and can lead to sub-optimal consequences if violated. 

European GPs (General Partners) looking to fundraise in Europe, even with the domicile of the fund in Delaware, face a complex regulatory environment. When pitching EU limited partners before the fund is launched, manager must adhere to ...

European GPs (General Partners) looking to fundraise in Europe, even with the domicile of the fund in Delaware, face a complex regulatory environment. When pitching EU limited partners before the fund is launched, manager must adhere to the Alternative Investment Fund Managers Directive (AIFMD), which regulates pre-marketing activities. A key pre-marketing strategy in the EU is reverse solicitation.  Reverse solicitation in the EU context requires that the initial request for materials be made by the investor or limited partner, without the manager explicitly pitching the fund. The fund manager must document this investor-initiated contact and limit their response to the specific request of the investor. For example, a prospective limited partner may ask the manager if they are launching a fund, and then the manager can share fund-related information. EU fund managers often domicile their funds in the US for a more favorable regulatory framework. If a manager chooses to domicile in the EU, they must either obtain the European Venture Capital Funds (EUVECA) designation or adhere to the individual laws of EU member states where they have limited partners. Due to high regulatory and compliance costs in the EU, it does not make sense to place a fund in the EU that is less than $15 MM in size. Additionally, it can take over a year to get the basic approvals and licenses. See: https://govclab.com/2023/12/14/eu-fundraising-for-new-managers/

By law, all offers and sales of securities within the United States must be either: • registered with the Securities and Exchange Commission (the SEC); or • issued relying on an available exemption from such registration. Generally spea...

By law, all offers and sales of securities within the United States must be either: • registered with the Securities and Exchange Commission (the SEC); or • issued relying on an available exemption from such registration. Generally speaking, "public" type offerings (for example an IPO) must be registered (such as any stocks publicly trading on the Dow Jones or NASDAQ) - this is a long and complex process. When startups raise capital through private markets, i.e. raising from venture capital funds, the offerings are private by definition ("unregistered"). Therefore, they rely on an exemption from registration. • As startups almost universally (when fundraising from venture capital funds) issue unregistered securities, there are no specific legal considerations or potential risks to take into account other than the risks associated with investing into startups in general. • Startups typically work with counsel to issue securities, who usually shoulder the burden of ensuring compliance for exemptions from registration. *Please consult experienced local counsel if you have questions pertaining to securities issued in other jurisdictions.

UPDATE: February 5, 2024 Cornerstone version 3 is available to download from VC lab here.

UPDATE: February 5, 2024 Cornerstone version 3 is available to download from VC lab here.

Non-Investments are assets of the Fund that are not tied to Investments (ie investments in portfolio companies or cash equivalents).  For example, the Fund may have proceeds from a litigation that is unrelated to an investment.

Non-Investments are assets of the Fund that are not tied to Investments (ie investments in portfolio companies or cash equivalents).  For example, the Fund may have proceeds from a litigation that is unrelated to an investment.

In the US, offerings of securities must be registered with the SEC or made pursuant to an exemption from registration. Regulation S provides an exemption for issuers to offer and sell securities in offshore transactions.  Regulation S ha...

In the US, offerings of securities must be registered with the SEC or made pursuant to an exemption from registration. Regulation S provides an exemption for issuers to offer and sell securities in offshore transactions.  Regulation S has two general conditions: (i) the offer or sale must be made in an offshore transaction; and (ii) there are no “directed selling efforts” – activity which could have the effect of conditioning the market in the United States.  VC funds can consider whether a certain offering of its fund interests outside the US can qualify for exemption under Regulation S.  VC funds should consult counsel to determine whether an offering qualifies for the Regulation S exemption and whether the offering complies with the laws of the overseas jurisdiction where the offering takes place.

For the General Partner to unilaterally decide to wind up a fund is an edge-case - there aren't "typical" types of cases to speak of here. However as one example, a pending SEC investigation (which could implicate the General Partner) co...

For the General Partner to unilaterally decide to wind up a fund is an edge-case - there aren't "typical" types of cases to speak of here. However as one example, a pending SEC investigation (which could implicate the General Partner) could be one of the causes for a General Partner to make such a decision.  While it's an edge-case, should a General Partner choose to go this route, they would be obligated to liquidate the Fund's assets and distribute the the proceeds to Limited Partners (see Cornerstone 6.3) - so it generally isn't considered "too risky" for the asset class.  It is not industry standard for LPs to need to approve of such a decision by the General Partner - however per the Cornerstone a majority of the LPs can also put the Fund into limited operations mode. 

It's not uncommon for LPs to take advisory roles in some portfolio companies. In addition, many LPs are often offered direct investment opportunities in follow-on or pro-rata opportunities. 

It's not uncommon for LPs to take advisory roles in some portfolio companies. In addition, many LPs are often offered direct investment opportunities in follow-on or pro-rata opportunities. 

Ontario is an internationally recognized domicile. Alberta, BC and Quebec may make sense if all LPs and investments are from that region. Otherwise, Ontario is the recommended domicile because it's a hub. This means that there is a good ...

Ontario is an internationally recognized domicile. Alberta, BC and Quebec may make sense if all LPs and investments are from that region. Otherwise, Ontario is the recommended domicile because it's a hub. This means that there is a good market of experienced and specialized service providers, unlike the other provinces. 

See the diagram below: [Canada Cornerstone Structure.png]

See the diagram below: [Canada Cornerstone Structure.png]

Here are the main considerations: 1. Venture funds can't receive advisory shares. So, if the founder makes you an advisor, you can't transfer that ownership to the fund. 2. If you are an advisor or consultant, that will be a conflict of...

Here are the main considerations: 1. Venture funds can't receive advisory shares. So, if the founder makes you an advisor, you can't transfer that ownership to the fund. 2. If you are an advisor or consultant, that will be a conflict of interest with your fund. 

A template Stewardship Agreement is available below: https://docs.google.com/document/d/1_wo2K7adTcEjARB3AgoPzW_PC8XHIUH7GrMTvutDsMQ/edit

A template Stewardship Agreement is available below: https://docs.google.com/document/d/1_wo2K7adTcEjARB3AgoPzW_PC8XHIUH7GrMTvutDsMQ/edit

Decile Group strongly recommends not accepting any investors who are not accredited investors into a Fund, even if it is technically and legally possible (depending on the jurisdiction and the Fund's legal agreements). Such investors are...

Decile Group strongly recommends not accepting any investors who are not accredited investors into a Fund, even if it is technically and legally possible (depending on the jurisdiction and the Fund's legal agreements). Such investors are generally not worth the extra effort and cost.  For specific advice about a jurisdiction, please consult an experienced fund attorney in said jurisdiction. 

“The identity of the LPAC members will be disclosed to all the investors of the fund. Disclosure happens as part of the process of providing notice to investors of changes or approvals that have been made.”

“The identity of the LPAC members will be disclosed to all the investors of the fund. Disclosure happens as part of the process of providing notice to investors of changes or approvals that have been made.”

As a manager, you need to get to know every potential limited partner before you pitch them, including doing research to understand if they are accredited. At the ned of the day, you need to use your best judgement. This is governed by g...

As a manager, you need to get to know every potential limited partner before you pitch them, including doing research to understand if they are accredited. At the ned of the day, you need to use your best judgement. This is governed by general solicitation regulations, which are explained below: https://govclab.com/2022/06/28/general-solicitation/

The PACT is a non-binding agreement, and, before any entities are formed, the jurisdiction does not matter, since there is no underlying entity to bind the agreement to. In general, it can be any jurisdiction, as the agreement is non-bin...

The PACT is a non-binding agreement, and, before any entities are formed, the jurisdiction does not matter, since there is no underlying entity to bind the agreement to. In general, it can be any jurisdiction, as the agreement is non-binding.

Question: With respect to financing documents, what does an early-stage VC need to do at the time of a an Equity Financing (aka Preferred Stock Financing), if said VC invested earlier in a typical SAFE note? A standard, unaltered Y Com...

Question: With respect to financing documents, what does an early-stage VC need to do at the time of a an Equity Financing (aka Preferred Stock Financing), if said VC invested earlier in a typical SAFE note? A standard, unaltered Y Combinator SAFE in 2023 contains language such as the following (please review variations published by Y Combinator for exact phrasing): "In connection with the automatic conversion of this Safe into shares of Standard Preferred Stock or Safe Preferred Stock, the Investor will execute and deliver to the Company all of the transaction documents related to the Equity Financing; provided, that such documents (i) are the same documents to be entered into with the purchasers of Standard Preferred Stock, with appropriate variations for the Safe Preferred Stock if applicable, and (ii) have customary exceptions to any drag-along applicable to the Investor, including (without limitation) limited representations, warranties, liability and indemnification obligations for the Investor." Answer: *Typically, during an Equity Financing, the Company (the portfolio company), will retain a law firm, which will be responsible for coordinating/distributing documents and requesting signatures as needed. **SAFE investors typically sign a subset of the Equity Financing documents.  Generally a VC in similar circumstances will need to: • Review the Preferred Stock Purchase Agreement and accompanying documents (with the assistance of its own counsel, which is usually recommended) to ensure its SAFE is converting correctly and as intended; • Sign the final financing documents (or subset thereof) as distributed by the portfolio company's law firm; • Receive and retain a final, fully executed set of closing documents for the Preferred Stock Financing.

Yes - however in doing so, the limited partner will generally lose their "limited" status with respect to liability, because they may wield influence over the Fund's decision-making processes. They may become liable for any actions taken...

Yes - however in doing so, the limited partner will generally lose their "limited" status with respect to liability, because they may wield influence over the Fund's decision-making processes. They may become liable for any actions taken by the General Partner of the fund that have potentially adverse implications for the Fund's limited partners.