What is the best legal setup for a deal warehouse especially for the first fund? Do we create a simple LLP with equal partnership of investors (close associates) that holds 4-5 assets, which is later bought out by the fund company and transfer the warehouse assets to it? What happens to the warehouse LLP after the transfer of assets? Can this LLP be reshaped and branded as a GP or Manco company or should it be closed/killed. Or else, instead of additional administration of LLP, can we choose to keep the warehouse on a outsourcing platform like Angel list and later buy these from the fund company? Please suggest.
Generally speaking, the best setups for a prospective fund manager to warehouse deals are:
- Individually (no one else involved); or
- Via a 100% wholly-owned entity.
The other types of setups you are referring to generally are not options. Complicated legal setups are not recommended, and platforms where the fund manager does not outright own the rights to an investment are not viable either. TL:DR - keep things simple.