Define the strategy, investor profile, capital target, and intended launch date before legal work begins. Record assumptions precisely so counsel and service providers evaluate the same operating model.
Engage formation counsel and assign owners
Retain qualified formation counsel and name accountable owners for legal, compliance, operations, tax, and investment work. Confirm scope, conflicts clearance, and escalation contacts.
Design fund and adviser entity structure
Design the fund, general partner, manager or adviser, and any feeder or blocker entities with counsel. Capture jurisdiction, ownership, tax classification, governance, and control relationships.
1
Delaware
2
New York
3
Cayman Islands
4
British Virgin Islands
5
Other counsel-approved jurisdiction
Determine exemptions and adviser status
Have securities counsel document the Investment Company Act exclusion, offering exemption, adviser registration or exemption, and state obligations. Do not rely on a generic hedge-fund label.
1
Section 3(c)(1)
2
Section 3(c)(7)
3
Mixed structure across vehicles
4
Counsel review not complete
5
Other documented exclusion
1
SEC registered investment adviser
2
State registered investment adviser
3
Exempt reporting adviser
4
Foreign private adviser exemption
5
Counsel review not complete
1
Rule 506(b)
2
Rule 506(c)
3
Rule 504
4
Section 4(a)(2) outside safe harbor
5
Counsel review not complete
Approval: Formation Structure
Will be submitted for approval:
Define fund mandate and launch assumptions
Will be submitted
Engage formation counsel and assign owners
Will be submitted
Design fund and adviser entity structure
Will be submitted
Determine exemptions and adviser status
Will be submitted
Form entities and obtain tax identifiers
Form every approved entity, obtain each EIN only after legal formation, and retain evidence. The IRS responsible party must be the person who ultimately controls or manages the entity, not a nominee.
1
Domestic entities exempt under current rule
2
Foreign reporting company filing required
3
Separate statutory exemption applies
4
Counsel review not complete
5
Other documented conclusion
Draft and reconcile launch documents
Prepare and reconcile the governing agreement, private placement memorandum, subscription agreement, investment management agreement, and side-letter policy. Resolve inconsistent economics, liquidity, valuation, conflicts, and authority terms.
Establish compliance and custody framework
Create the compliance framework appropriate to the adviser status and custody model. Address code of ethics, conflicts, books and records, privacy, cybersecurity, personal trading, custody, audit delivery, sanctions, and the deferred federal adviser AML rule.
1
Pooled vehicle annual audit approach
2
Independent surprise examination
3
No adviser custody documented
4
Multiple approaches across vehicles
5
Counsel review not complete
1
Federal IA rule deferred to January 2028
2
Voluntary risk-based program implemented
3
Other applicable AML obligation controls
4
Not applicable based on documented status
5
Counsel review not complete
Select service providers and complete diligence
Select providers whose capabilities match the strategy and control model. Complete diligence on the administrator, qualified custodian or prime broker, bank, auditor, tax adviser, legal counsel, and technology vendors.
1
Fund administrator
2
Qualified custodian or prime broker
3
Banking provider
4
Independent auditor
5
Tax adviser
6
Legal counsel
7
Technology or cybersecurity vendor
Design valuation, fees, and expense controls
Document valuation sources, escalation for hard-to-value assets, NAV production, fee calculations, allocations, expense ownership, error correction, and independent review. Reconcile these controls to the offering documents.
Approval: Launch Documents and Controls
Will be submitted for approval:
Form entities and obtain tax identifiers
Will be submitted
Draft and reconcile launch documents
Will be submitted
Establish compliance and custody framework
Will be submitted
Select service providers and complete diligence
Will be submitted
Design valuation, fees, and expense controls
Will be submitted
Configure investor eligibility and onboarding
Configure investor intake, eligibility, sanctions screening, tax documentation, subscription review, source-of-funds checks, and acceptance authority. Apply the verification standard that matches the approved offering exemption.
1
Rule 506(b) reasonable belief
2
Rule 506(c) reasonable verification steps
3
Non-Regulation D counsel-defined standard
4
Multiple standards across vehicles
5
Counsel review not complete
1
Income documentation review
2
Net worth documentation review
3
Qualified third-party confirmation
4
Prior verification plus current representation
5
Facts and circumstances method
Complete federal and state filings
Complete adviser filings, Form D, and state notice filings on the schedule confirmed by counsel. Form D is generally due within 15 days after the first sale for Regulation D offerings; states may still require notices and fees.
Open accounts and test cash controls
Open accounts in the correct legal names and test dual authorization, approved counterparties, cash movements, callbacks, reconciliations, and exception escalation. Never use personal or temporary accounts.
1
Passed without exceptions
2
Passed with remediated exceptions
3
Failed and remediation open
4
Testing not yet complete
5
Not applicable with explanation
Run operational readiness testing
Run an end-to-end dry run covering subscription intake, eligibility review, cash receipt, trade capture, valuation, NAV, fee calculation, reconciliation, reporting, incident escalation, and business continuity.
1
Ready for launch
2
Ready with accepted conditions
3
Remediation and retest required
4
Blocked by material issue
5
Testing not complete
Approval: Launch Readiness
Will be submitted for approval:
Configure investor eligibility and onboarding
Will be submitted
Complete federal and state filings
Will be submitted
Open accounts and test cash controls
Will be submitted
Run operational readiness testing
Will be submitted
Accept the initial closing and preserve evidence
After launch approval, accept the initial closing, retain signed subscriptions and acceptance evidence, confirm cleared funds and investor records, and trigger any filing deadlines tied to the first sale.
Create the ongoing compliance calendar
Build the post-launch calendar from the final regulatory status and fiscal year. Include Form ADV updates, state renewals, audit delivery, tax, investor reporting, compliance testing, valuation review, and the January 2028 AML-rule reassessment.
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