The Complete Compliance Checklist for First-Time Fund Managers

Compliance is the least glamorous part of running a venture fund, and also one of the most consequential. A missed filing doesn't just create paperwork — it can trigger regulatory scrutiny, damage LP confidence, and in worst cases, result in enforcement actions that threaten the fund itself.

For first-time fund managers, the compliance landscape can feel overwhelming. You went from being a startup investor to suddenly being responsible for SEC filings, AML procedures, state registrations, and audit requirements. This checklist walks through everything you need to know, organized by when you need to do it.

Pre-Launch: Before You Accept Capital

Entity Formation and Structure

Before your fund can operate, your legal entities need to be properly established:

• - Form the fund LP (limited partnership): Typically a Delaware limited partnership. File the Certificate of Limited Partnership with the Delaware Secretary of State
• - Form the GP entity: Usually a Delaware LLC that serves as the general partner of the fund LP
• - Form the management company: A separate entity (often another LLC) that employs the team and receives management fees
• - Draft and execute the LPA: Your Limited Partnership Agreement is the governing document for the fund. It must be finalized before your first close
• - Obtain EINs: Each entity needs its own Employer Identification Number from the IRS
• - Open bank accounts: Separate accounts for each entity. The fund LP needs its own account for capital calls, investments, and distributions

Regulatory Filings — Form D

Within 15 days of your first sale of securities (i.e., your first LP commitment), you must file Form D with the SEC. This is a notice filing under Regulation D, which provides the exemption from full SEC registration that most venture funds rely on.

• - File Form D electronically via the SEC's EDGAR system
• - File state notice filings in each state where you have LPs (requirements vary by state — some require notice, some require fees, some require both)
• - Track the 15-day deadline carefully. Late filings don't invalidate your exemption, but they can attract regulatory attention and are easily avoidable

Investment Adviser Registration

Most emerging managers with less than $150M in AUM qualify as "exempt reporting advisers" (ERAs) under the Dodd-Frank Act. You don't need full SEC registration, but you do need to file as an ERA:

• - File Form ADV with the SEC via the IARD system. This establishes you as an exempt reporting adviser
• - Pay IARD filing fees (these vary but are typically modest)
• - Update Form ADV annually — the amendment is due within 90 days of your fiscal year end

If you manage $150M+ or have more than 15 clients, you may need full registration. Consult your fund counsel to determine your obligations.

At First Close: Accepting LP Capital

AML/KYC (Anti-Money Laundering / Know Your Customer)

While venture funds aren't technically subject to the Bank Secrecy Act's customer identification program requirements (that's for banks and broker-dealers), best practices and LP expectations require robust AML/KYC procedures:

• - Verify LP identity: Collect and verify government-issued identification for individual LPs and formation documents for institutional LPs
• - Screen against OFAC lists: Check all LPs against the Treasury Department's Specially Designated Nationals (SDN) list and other sanctions lists
• - Document the source of funds: Understand where your LPs' capital is coming from, particularly for foreign investors
• - Maintain records: Keep all KYC documentation for at least five years after the LP relationship ends
• - Re-screen periodically: OFAC lists are updated regularly. Re-screen your LP roster at least annually

Subscription Documents

Each LP must complete subscription documents that include:

• - Subscription agreement with the LP's commitment amount and entity information
• - Accredited investor questionnaire verifying the LP meets the accreditation requirements for your fund's exemption
• - W-9 or W-8 tax forms (W-9 for U.S. LPs, W-8 for foreign LPs)
• - Side letter (if applicable) documenting any special terms negotiated with that LP

Ongoing: Quarterly and Annual Requirements

Quarterly Obligations

• - LP quarterly reports: While not strictly a regulatory requirement, your LPA almost certainly requires periodic reporting. Industry standard is quarterly, within 45-60 days of quarter end
• - Capital call compliance: Ensure all capital calls comply with LPA terms — notice periods, maximum call percentages, and proper documentation
• - Compliance calendar review: Check upcoming deadlines for the next quarter. Don't let anything sneak up on you

Annual Obligations

• - Annual audit: Most fund LPAs require an annual audit by an independent accounting firm. Engage your auditor early — audit season (January-March) is competitive
• - K-1 preparation and distribution: Tax reporting for LPs. K-1s are typically due by March 15 (or the extended deadline if applicable). Late K-1s are one of the top LP complaints in the industry
• - Form ADV annual amendment: Due within 90 days of fiscal year end. Update AUM, number of clients, and any material changes
• - Form PF (if applicable): Funds with $150M+ in AUM file Form PF with the SEC. Most emerging managers are below this threshold, but track it as you grow
• - State notice filing renewals: Some states require annual renewals. Track each state where you have LPs
• - OFAC re-screening: Re-run your LP roster against updated sanctions lists
• - Blue sky filings: Renew state notice filings as required (many expire annually)
• - Insurance renewals: Errors & omissions (E&O) and directors & officers (D&O) insurance policies typically renew annually

Tax Obligations

• - Fund tax return (Form 1065): Partnership tax return due March 15 (or September 15 with extension). Your fund accountant prepares this
• - K-1 distribution: Individual LP tax forms, prepared as part of the tax return process
• - State tax filings: Depending on your fund's state of formation and where your portfolio companies operate, state-level tax filings may be required
• - FBAR (if applicable): If your fund has foreign bank accounts exceeding $10,000 in aggregate, file FinCEN Form 114 by April 15

Special Situations

When You Have ERISA LPs

If pension funds or 401(k) plans invest in your fund, you may trigger ERISA requirements. Most funds use the "VCOC" (Venture Capital Operating Company) exemption to avoid full ERISA compliance:

• - Monitor the 25% threshold: If "benefit plan investors" exceed 25% of fund commitments, you may lose the VCOC exemption
• - Maintain management rights: VCOC status requires that you have contractual management rights in a sufficient percentage of portfolio companies
• - Document compliance: Keep records demonstrating your VCOC qualification

When You Have Foreign LPs

Foreign investors introduce additional compliance layers:

• - FATCA compliance: Ensure proper tax documentation (W-8 forms) from foreign LPs
• - CRS reporting: If your fund has reporting obligations under the Common Reporting Standard
• - Withholding requirements: Certain distributions to foreign LPs may require tax withholding. Your fund accountant should advise on this

When You Invest Across State Lines or Internationally

• - State blue sky laws: Some states have additional requirements when fund capital is invested in companies within their borders
• - International investment reporting: Depending on the jurisdiction, investing in foreign companies may trigger reporting requirements

Building a Compliance System

The single biggest compliance risk for first-time fund managers is not the complexity of any individual requirement — it's losing track of deadlines. A missed Form D filing or a late K-1 distribution doesn't happen because the GP didn't know it was required. It happens because the deadline slipped through the cracks.

This is exactly why Archstone includes a compliance module with automated deadline tracking. Every filing, report, and renewal is calendared with advance notifications. Archie — our AI assistant — monitors your compliance calendar and provides proactive alerts:

• - 90 days before your Form ADV annual amendment is due
• - 60 days before audit season begins
• - 30 days before K-1 distribution deadlines
• - Immediately when a new LP is added and requires KYC screening

The compliance module also maintains an audit trail of every action — when filings were submitted, when screenings were completed, when documents were distributed. When your auditor asks for compliance records, you're not digging through email threads. It's all in one system.

The Cost of Non-Compliance

To put a fine point on it: the cost of compliance infrastructure is always less than the cost of non-compliance. A missed filing can result in SEC scrutiny. An AML gap can create LP liability. A late K-1 can cost you an LP re-up.

Fund counsel will handle the legal strategy. Your accountant will handle the tax filings. But the operational responsibility — tracking deadlines, maintaining records, ensuring nothing falls through the cracks — that's on you, the GP.

Build the system now, before your first close. Your future self will thank you.