Fund of Funds LP Look-Through

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Community Member

Jul 26, 2023

How do Fund of Funds get around the SEC look-through rules for investment companies? Say a FoF has 30-40 LPs and is structured as an LLC, wouldn't the SEC look through the fund entity and count each of the FoF investors as an investor in the fund? If so that would drastically reduce the number of investors they could have on their cap table.

Look-through Fund of Funds

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1 answer

Haw Kuo

Accepted Answer

Jul 26, 2023

Generally speaking, venture funds do not structure themselves as LLCs - we typically see the following multi-entity structure for Delaware domiciled funds:

Management Company - LLC
General Partner entity - LLC
Fund - Limited Partnership

Please read this for more information: https://govclab.com/2022/02/09/the-ideal-number-of-lps-in-a-vc-fund/

Are Limited Partnerships not subject to the look-through rules that LLCs are?

Community Member

Jul 26, 2023 10:28pm

They are subject to the look-through rules but LPs can have up to 249 investors. We would not recommend having this many as detailed in the article Haw shared above.

Fund of Funds LP Look-Through

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