Building the Ultimate GP Checklist: From Fund Formation to Investor Onboarding

Launching a private fund should be considered a marathon, not a sprint. But there are ways to make the process smoother.

For general partners (GPs), the journey from fund formation to investor onboarding is fraught with complexity, regulatory hurdles, and the pressure to deliver strong fund performance.

Private equity firms, in particular, must carefully navigate fund investments, structuring, and compliance to attract the right investors and scale effectively.

To give readers some invaluable insights, we are joined by two distinguished guests: Moritz Poewe, our Chief Operating Officer and a leading expert in the field, along with Tülin Tokatli, the CEO and founder of Pitch Me First, an advisory firm specializing in services for private equity (PE) and venture capital (VC) funds.

Before joining Vestlane as COO, Moritz, a former GP at SquareOne, built a long-standing career in venture capital and tech operations.

As the founder of Paua Ventures, he spent over a decade managing multiple fund generations, making critical investment decisions and overseeing fund operations.

Recognizing Vestlane’s potential to streamline fund onboarding and compliance for private equity firms and venture funds, he joined in 2024 to offer his expertise in fund management and scaling.

Reflecting on his early career experiences, Moritz quips: "We lived the pain. Vestlane isn't just software; it's the playbook we wish we'd had back then."

"I used to oversee all these onboarding processes, KYC stuff, for our venture firm. So I know all the pain points. Back in the day, there was no Vestlane.”

Indeed, structuring a fund properly and ensuring a headache-free investor onboarding process are among the most challenging aspects of being a GP.

Every step, from legal setup to ensuring investor compliance, can affect fund performance and long-term success.

Meanwhile, Tülin, a former investor at the European Investment Fund, now advises GPs. In other words, she transitioned from the buy side to the sell side after experiencing firsthand how ambitious visions can falter without anchor investors.

In this blog, both experts share their insights on fund formation, onboarding, and fund investments, offering insights for both emerging and seasoned fund managers.

Get ready for your ultimate guide to setting up a fund.

Fund Formation: Laying the Legal and Strategic Foundation

Establishing a private equity fund involves several critical steps.

1. Define Your Investment Thesis
   
   Clearly articulate your fund's strategy, target sectors, and value proposition to attract potential investors. In the US, the Investment Advisers Act of 1940 requires advisers to clearly explain their investment strategies to clients.
   
   Similarly, in Germany, fund managers must define and communicate their investment approaches. While an investment thesis is not explicitly mandated by law, having one does help with overall compliance.
   
   Moritz's Insight

   Before even getting to jurisdiction, a GP needs to come up with why they’re building this venture firm. You need to have a proper strategy.
   
   What's your edge, vision and story? It needs to be appealing to investors or LPs, right? Why are you raising capital? An investment thesis is important not just for investors but also for the team you'll need to build.

   
   
2. Select the Appropriate Jurisdiction
   
   Next, choose a domicile that aligns with your fund's objectives, considering factors such as regulatory environment, tax implications, and investor preferences.
   
   Moritz's Insight

   A GP needs to determine the right jurisdiction for their fund. This decision impacts everything: legal structure, tax implications, regulatory requirements, and even tech or operational setup.
   

   I think you really need to talk to some lawyers and experts to figure out what would be the right jurisdiction for your fund. Once you’ve set up a fund, you’re in it for at least 10 to 15 years. You need to be aware that there is a lot of regulation surrounding each jurisdiction, which you might not expect at first.

   
   Tülin's Insight
   

   Choosing the right jurisdiction isn’t just a legal checkbox. It should be a strategic decision that ensures the fund structure aligns with anchor LP requirements, avoids non-compliant jurisdictions, and accommodates a diverse LP base with different regulatory and tax considerations.

   In short: get the basics right first, then build the legal structure around what actually works—not the other way around.

3. Structure the Fund
   
   Decide on the legal structure (e.g., limited partnership, limited liability company) and draft essential documents, including the Private Placement Memorandum (PPM), Limited Partnership Agreement (LPA), and Subscription Agreements.
   
   For subscription agreements, Vestlane's platform automates their creation, management, and execution, ensuring compliance with regulations such as KYC, AML, FATCA, and CRS.
   
   Moritz's Insight

   In general, of course, every fund is very individual, depending on the size, the amount of team members and stuff like that.
   
   I think you need to apply your philosophy to what kind of venture firm you want to build, how do you want to incentivize partners, how is the incentivization within the team, because at the end of the day, it's a business model.
   
   Once that foundation is in place, then you can move on to operational setup like fund administration, compliance, and technology.

   
   
   Tulin's Insight

   I often meet fund managers who, at our very first conversation, have already racked up a hefty legal bill—yet their fund proposal is full of roadblocks that make it nearly impossible for institutional investors to commit. It makes me wonder: why spend so much on legal structuring before ensuring the fund itself is actually investable? 

   I believe the right approach is to focus on the fundamentals first. Before worrying about legal setup, fund managers need to build a complementary team, develop an investment thesis that relates to their background, and position themselves properly in the market. If these pieces fall into place—and they have some soft commitments from LPs—then it’s time to think about jurisdiction.

   
   
4. Ensure Regulatory Compliance
   
   Adhere to all applicable laws and regulations, such as securities laws and anti-money laundering (AML) requirements. Compliance is at the heart of Vestlane.
   
   We offer a 360° KYC/AML (Know Your Customer/Anti-Money Laundering), now enhanced with automated name screening powered by ComplyAdvantage. This integration allows for real-time monitoring of individuals and entities against global watchlists, ensuring proactive risk detection and mitigation.
   
   Additionally, our latest compliance risk management enhancements provide greater transparency, improved workflow automation, and deeper risk insights, making it easier than ever for fund managers to remain audit-ready.
   
   With our latest international TIN format validator that automatically checks tax identification numbers across different jurisdictions, Vestlane enables compliance teams to efficiently manage requirements better than ever across 100 different regions.
   
   Moritz's Insight

   All of these steps are interconnected, and getting them right from the start will make the entire fundraising and operational process much smoother.

   
   
5. Assemble a Competent Team
   
   Build a team with expertise in investment management, legal, compliance, and operations to effectively manage the fund. Appoint a fund administrator, auditor, and legal counsel to oversee compliance, reporting, and governance.
   
   Moritz's Insight

   At the end of the day, you're not just raising a fund; you're building a company. You need to have a proper strategy, a clear differentiator, and a well-structured team. I would also think about the carried interest.
   
   As a venture capitalist, you receive a management fee, which typically depends on the amount of money you're managing, often around 2%. Carried interest is the key long-term incentive for fund managers.
   

   If you're launching something new, you should consider how carried interest is allocated and how you incentivize your team members.

   
   
6. Define Fund Size and Investment Focus
   
   Determine how much capital you aim to raise, the industries and sectors you'll target, and your competitive edge. Want to make reinvestment easy and efficient?
   
   The Vestlane Investor Wallet does just that. This feature includes built-in digital signing, secure communication, and document storage, all in one place.
   
   Tülin's Insight

   A lot of decisions in VC teams follow herding behavior—one sets the trend, and others follow. Fund size is no exception. But I believe every proposal is unique, and fund size should reflect that.
   

   If a fund proposal were a house, its roof would be fund size—covering and shaping everything beneath it. Strategy, portfolio construction, team structure, and operational capacity all depend on how big or small you want to build your house—and its roof.
   

   That’s why fund size can’t be just one number—you need at least two: one to lay the foundation and one to reach full scale.
   

   And when asked, your rationale must be crystal clear, connecting every aspect of your proposal and operations back to the fund size you are aiming for.

Operational Setup: Avoiding Common Pitfalls

Operational efficiency is one of the most overlooked yet vital aspects of fund management. Fund administration, accounting, and compliance processes must be integrated and ready to go from day one.

7. Establish Fund Operations

• Form both the General Partner (GP) and Limited Partnership (LP) entities to ensure the appropriate legal and financial framework is in place.

• Open fund bank accounts and implement financial reporting systems for efficient management. Our Data Room makes the distribution of fund marketing materials, and reports, more aerodynamic.
  
  This document manager allows fund managers to track engagement with these materials, providing insights into investor interest and behavior.
  
  
• Establish an investment committee to govern decision-making. Typically composed of senior professionals within the general partner firm, the committee is responsible for making critical decisions regarding the fund's investments.
  
  
• Implement risk management and valuation policies to safeguard financial integrity and ensure proper assessments of investments.

8. Organize Tech Stack to Streamline Operations

It’s generally advised in the modern day that GPs explore fund administration platforms to automate reporting, compliance, and investor onboarding, reducing manual errors and improving efficiency.

Deloitte highlights technology as a top 10 consideration for efficient, scalable, and risk-free fund operations.

Moritz's Insight

Back in the day, everything was done manually, so paper files, physical signatures, emails back and forth. Today, platforms like Vestlane automate these tasks, making fund administration more efficient and reducing the risk of errors.

Tülin's Insight

I see two distinct approaches among fund managers: those who prefer a human-centric administrative process and those embracing the digital era.

Regardless of the approach, the choice of service provider should ensure seamless and efficient fund operations without delays or complications. After all, LPs are busy—what they need is less friction and operational excellence, not more headaches.

Secure Investors: What Works and What Doesn’t?

Pitching to investors is a make-or-break moment for any fund. GPs must demonstrate not only a compelling investment strategy but also show credibility.

9. Investor Outreach and Due Diligence

A strong investor outreach strategy starts with customizing your pitch to different investor profiles.

Build a compelling pitch deck, set up a well-organized data room, and put together a clear, detailed fund prospectus.

At the same time, compliance is key. Make sure to collect investor accreditation and suitability checks to meet regulatory standards.

Due diligence goes both ways. Vet potential investors with background checks on their financial standing and reputation.

Also, I think it’s important to mention that a big red flag for investors is seeing GPs with unrealistic targets or goals on financial return. You need to validate, even with data, what you’re going to do.

Moritz's Insight

You need to think about who could be your potential investors. You also need a good track record, ideally, right?

I think that having proof of experience, being an angel investor, being a former entrepreneur, is really important so you know exactly the industry you’re working in. For emerging managers you should start very with a niche and focused approach.

There are big, generic funds like Index Ventures that do early stage seed, growth investments, everything. But they have built a reputation for the last 30 years. If I was an emerging manager, I would really focus on what you are good at and where you already have a network.

Types of Investor Profiles

• Institutional Investors: Pension funds, endowments, insurance companies, sovereign wealth funds, and foundations that typically seek long-term, stable returns and require extensive due diligence.
  
• High-Net-Worth Individuals (HNWIs): Accredited investors with significant investable assets who may seek exposure to alternative investments for diversification and higher returns.
  
• Family Offices: Privately-held investment firms managing the wealth of ultra-high-net-worth families, often interested in bespoke investment strategies and long-term capital appreciation.
  
• Fund of Funds: Investment funds that allocate capital to multiple private funds, providing diversified exposure and risk mitigation.
  
• Corporate Investors: Businesses looking for strategic investments that align with their core operations or financial goals.
  
• Wealth Managers and Financial Advisors: Professionals managing investments on behalf of individual clients and looking for diversified, alternative investment opportunities.

Tülin's Insight

The VC landscape is more competitive than ever.To gain a competitive edge, fund managers must find ways to truly differentiate themselves.

A common mistake is structuring a fund based on what’s trending rather than solid fundamentals—chasing available capital in a hot sector, recycling the same generic pitch, and offering nothing new. LPs see right through this.

What LPs truly value is authenticity and differentiation. This could mean:

Deep sector expertise that is difficult to replicate—often aligning with policy-driven investment mandates for DFIs.

A performance-driven track record, where managers have a proven ability to generate returns, exits, and market leadership, making them stand out as blue-chip investors.

Be authentic. Build on your strengths. Don’t just follow the money—earn it.

Investor Onboarding & Reporting: Ensuring a Top Notch Experience

Once investors have committed to your fund, the onboarding process must be smooth and compliant with all necessary regulations.

Investor onboarding is often a cumbersome process that involves extensive paperwork, legal verifications, and compliance checks. However, with the right tools and strategies in place, GPs can significantly streamline this phase.

10. Efficient Onboarding Processes

• Digital Documentation and e-Signatures Traditionally, investor onboarding involved physical paperwork and extensive back-and-forth communication. Now, platforms like Vestlane enable digital document submission, e-signatures, and secure data storage, expediting the process while maintaining compliance.
  
• Know Your Customer (KYC) and Anti-Money Laundering (AML) Compliance Regulations such as KYC, AML, FATCA, and CRS require stringent checks before onboarding investors. Automating these processes through a digital compliance dashboard ensures that investors are verified efficiently and accurately.
• Streamlined Subscriptions Speeding up subscription agreements reduces administrative burdens and enhances investor satisfaction. Real-time dashboards that provide visibility into committed funds help investors stay informed and engaged.

Moritz's Insight

Luckily there are solutions like Vestlane. It allows you to simplify the process—where you can bear less burden, standardize everything, and provide the LP side with a clear, structured overview of what is required.

You can outline the necessary documents, explain the processes involved, and ensure everything is well-organized. Vestlane basically provides a to-do list for GPs and LPs.

That’s a huge advantage because, without it, there’s a high risk of missing crucial onboarding steps or making mistakes. The consequences may not be immediate, but when regulatory scrutiny increases, the impact becomes evident. If auditors come in and critical documents are missing, the situation can quickly escalate.

Ongoing Investor Reporting & Communication

It’s important to remember that investor relationships don’t end once capital is committed. Transparency and regular reporting are key to maintaining trust and credibility with LPs.

11. Keep Investors Informed, Always

• Regular Fund Performance Updates Providing investors with regular performance reports, net asset value (NAV) calculations, and detailed portfolio insights ensures that they remain informed about the fund’s progress. These updates should be delivered in a clear, consistent, and structured manner.
  
• Quarterly and Annual Reports Most investors expect quarterly updates on fund performance, detailing investment activities, distributions, and valuations. Annual reports should provide a more in-depth analysis of the fund’s achievements, challenges, and long-term outlook.
  
• Investor Portals for Real-Time Access Dedicated investor portals allow LPs to access fund reports, capital calls, and legal documents anytime. Vestlane’s Shared Workspace enhances day-to-day operations of funds by offering a centralized hub for investor interactions, reports, automated compliance checks, and secure document storage.

Moritz's Insight

We often see funds with hundreds of investors, each overseeing hundreds of entities. Every investor may require 10 different documents and involve 20 different touchpoints. Keeping track of everything manually becomes nearly impossible as the number of investors grows.

Sure, if you’re handling 10 investors, you might manage with paper-based processes. But with hundreds of investors? Managing keeping investors updates without digital solutions is overwhelming in the modern era.

Tülin's Insight

If you want your investors to commit to your next fund, don’t leave investor relations as an afterthought—get a dedicated IR lead.

Keep your books and reporting clean, clear, and high quality.

Think of it like a luxury brand—it’s not just about the product, but the experience, trust, and attention to detail that keeps people coming back.

In the Race for Capital, Tech-Savvy GPs Take the Lead

As private equity and venture capital continue to evolve in an increasingly complex financial landscape, the role of the general partner has transformed from mere fund manager to technological orchestrator.

The days of manila folders and endless email chains are giving way to streamlined digital solutions, yet the fundamental challenge remains the same: building trust while maintaining compliance in an industry where reputation is everything.

"At the end of the day, we're in the business of trust," reflects Moritz Poewe, before we conclude our checklist discussion.

"Whether you're managing ten investors or a thousand, every interaction, every document, every capital call is a chance to either strengthen or weaken that trust."

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