A new fund can often be formed in roughly 60 days, although timing depends on the complexity of the fund, the decisions that need to be made, and how quickly documents are reviewed and finalized.

Doss Law offers a fixed-price legal package for new fund formation covering the formation process from fund architecture and entities through offering documents, securities guidance, marketing review, and initial filings.

A Private Placement Memorandum (PPM) is the primary disclosure document for the offering. It describes the fund, its structure and terms, material risks, and other information prospective investors need to evaluate the investment.

Doss Law prepares the PPM and related exhibits, which may include the subscription agreement, fund operating agreement, manager entity documents, and, when needed, notes and custodial agreements. The documents work together to establish the legal framework for the fund, its manager, and its investors.

Investors in a mortgage or real estate fund are typically accredited, but the requirements depend on the type of fund and the securities exemption being used. Rules 506(b) and 506(c), for example, have different requirements that can affect who may invest and how the offering may be marketed.

Doss Law works with clients to determine the appropriate securities exemption and the investor eligibility requirements that apply, including whether investors must be accredited and, when applicable, how accredited status must be verified.

Whether and how you can advertise a fund depends on how the offering is structured. Rule 506(b) generally prohibits general solicitation and advertising, while Rule 506(c) permits broader marketing if all purchasers are accredited investors and the issuer takes reasonable steps to verify their accredited status. Federal and applicable state securities requirements also need to be considered.

Being legally permitted to advertise and being ready to successfully market a fund are two different things. Doss Law works with clients on the securities structure of the offering and reviews and revises fund marketing materials to address the requirements that apply.

Licensing requirements depend on the type of fund, the activities it will conduct, and the states in which it will operate. For mortgage funds, for example, lending activity may trigger licensing requirements in some states but not others.

Doss Law works with clients to identify the licensing requirements that apply to the fund’s proposed activities and jurisdictions.

Fund formation is not the end of the legal relationship. Once the offering opens, the fund still has to operate within the structure, documents, disclosures, and regulatory requirements established at formation.

Doss Law continues to work with fund clients on corporate governance, licensing, securities filings, regulatory compliance, loan documentation, and DRE/DFPI matters as needed.