Starting a hedge fund can seem like a daunting task, but with the right guidance and support, it can be a smooth and rewarding journey. In this article, we'll break down the fund formation process and make it accessible for millennial investors.

Step 1: Initial Consultation

Your first step is to have an initial consultation with Simon Matwal, the firm's principal. During this session, you'll discuss important topics like your investment strategy, target investors, and regulatory requirements. You'll also learn about the costs associated with running the fund and the structure of your management company

Step 2: Fund Formation Questionnaire

Next up is the fund formation questionnaire. This document covers crucial considerations such as your investment strategy, target investors, fund structure, and more. You'll work with the team to review and complete the questionnaire to ensure that you have a clear understanding of all the key components involved in establishing a fund.

Step 3: Structuring the Fund

A domestic hedge fund is typically structured as a limited partnership (LP) with a management company acting as the general partner. This setup protects the personal liability of the GP's principals. The LP is typically domiciled in Delaware, and the GP is in the state where the manager provides investment advice.

Step 4: Introduction to Service Providers

To make your fund marketable, you'll need to engage a broker, administrator, and auditor before taking on outside investors. These service providers will play an important role in the success of your fund.

Step 5: Preparation of Operating Agreements and Offering Memorandum

Our firm will draft and file the necessary documents, including the limited partnership agreement, private placement memorandum (PPM), investor questionnaire, subscription agreement, and manager operating agreement. These documents outline the terms and conditions of your fund and provide full and fair disclosure to prospective investors.

Step 6: Compliance with Federal and State Securities Laws

Finally, you'll need to comply with federal and state securities laws. Most investment funds offer interests under an exemption provided by Rule 506 of Regulation D of the '33 Act. This requires filing a Form D with the SEC within 15 days of the first sale of interests in the fund. You'll also need to provide notice to state securities regulatory authorities when offering an exempt investment.

In conclusion, the fund formation process may seem overwhelming, but with the right support and guidance, it can be a straightforward and exciting journey. From the initial consultation to compliance with securities laws, our team is here to help make the process as seamless as possible for millennial investors.

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