fund formation

Scope of Services: Carta Fund Formation

Carta Fund Formation & Pre-Close Services

Types of Funds Supported

3(c)(1) exempt funds
3(c)(7) exempt funds

Types of Offerings Supported

506(b) offerings
506(c) offerings

506(c) offerings require additional accreditation checks for your Limited Partners (LPs), the service and associated costs of which are not included in the Fund Formation fee. Client is responsible for remaining in compliance with all applicable laws, rules, and regulations.

We strongly recommend working with your own legal counsel to determine and maintain your ongoing legal and regulatory compliance obligations.

Fund Structures

Carta will only support the following fund structures and selections:

Waterfalls
- Standard European (80/20)(1)
- Performance Milestones
- Cashless Capital
Management Fees
- Standard Management Fees during the investment period
- Frontloaded Management Fees (optional)

Fund Sectors and Strategies

Carta will provide support for varied fund sectors and strategies, such as:

Direct investments in private companies
Indirect investments in other partnerships or SPVs (Fund of Fund)

For support of additional sectors and strategies, please talk to your Carta representative.

Fund Formation Services

Carta Fund Formation requires utilization of the three following entities, the formation costs of which are included in your Fund Formation fee. Carta will work with you and a third party to form the following entities in the state of Delaware (DE):

Venture Fund, formed as a limited partnership (LP)
Management Company, formed as a limited liability company (LLC)
General Partner Entity, formed as a limited liability company (LLC)

Included for each entity are EINs and the first year's Registered Agent fees. If you continue with Carta for fund administration services, subsequent year Registered Agent fees will be included in your annual fund administration fee.

If you have already formed a General Partner (GP) Entity or Management Company, they must be formed in the state of DE. Carta requires a separate GP Entity and Management Company.

Fund Formation Documents

Carta will provide the following:

Venture Funds:

Term Sheet
Initial Limited Partnership Agreement
Amended and Restated Limited Partnership Agreement
Subscription Agreement
Investment Management Agreement
Side Letter (carry and management fee modifications only)

General Partner:

LLC Operating Agreement
Advisory Letters with Vesting Schedules

Management Company:

LLC Operating Agreement

Talk to your Carta representative to receive samples of the Fund Formation templates. To qualify for Carta Fund Formation services you must use the templates provided. If these templates do not conform with your desired fund structure, then your fund will not be eligible for Carta Fund Formation services. However, your fund may still be eligible for Carta fund administration services.

Carta will not provide the following types of documents with the base Fund Formation fee (2):

Private Placement Memorandum
Side Letter (with the exception of carry and management fees)
Transfer Agreements for Limited Partners
Transfer Agreements for Warehoused Investments
Employment Letters
Amendments

Carta’s Fund Formation templates were created to be used by US-based fund managers raising funds from US investors. If you are an international fund manager or are raising from international investors, you may need to consult your own legal counsel for additional compliance needs.

Filings

Carta will assist with preparing and filing the following:

Form D
Blue Sky Filings (additional state filing fees apply)

Carta will prepare the forms for your approval before filing, and you remain solely responsible for the accuracy and completeness of such filings. Carta may assist with related amendments or renewals as needed.

Carta can provide introductions to a third party service provider who will assist you with preparation and filing of the following:

Form ADV (if applicable at the time of first fund closing) (3)

Carta will also prepare the registration of your Management Company to do business in your state of operation.

If you continue with Carta for fund administration services, certain subsequent annual preparation and filing fees will be included in your annual fund administration fee (as indicated below).

For more information on the fee breakdown, refer to the table below.

Filing	Cadence	Who Pays
Venture Fund
DE Formation Filing Fee - LP	One-time	Carta
DE State Franchise Tax	Annual	Carta*
EIN	One-time	Carta
Registered Agent	Annual	Carta*
Form D - Initial	One-time	Carta
Form D - Renewal	One-time	Carta
Blue Sky Filings	One-time per LP	Client

Management Company
DE Formation Filing Fee - LLC	One-time	Carta
DE State Franchise Tax	Annual	Carta*
Foreign Qualification - Initial	One-time	Carta
Foreign Qualification (or other annual state filing) - Ongoing	Annual	Client
EIN	One-time	Carta
Registered Agent	Annual	Carta*
Form ADV - Initial	One-time	Client
Form ADV - Ongoing	Annual	Client
Additional State Filings	Annual	Client
IARD Fees (ADV Related)	Annual	Client

General Partner
DE Formation Filing Fee - LLC	One-time	Carta
DE State Franchise Tax	Annual	Carta*
EIN	One-time	Carta
Registered Agent	Annual	Carta*

* If client continues with Carta for fund administration services.

** Only for management company entities formed by Carta.

The following are not included in the base Fund Formation fee:

Federal or state securities filings that may be needed after your first fund closing, unless otherwise scoped up-front
Other regulatory filings
Dissolutions
State / municipality specific fees

Depending on the state(s) you operate in, additional fees or expenses may apply. All state-specific fees, unless specifically noted above, are not covered under your Fund Formation fee.

Any additional filings not listed above are your sole responsibility.

Due Diligence Services

Included in your Fund Formation fee, Carta will provide ‘know your customer’ (KYC) and ‘anti-money laundering’ (AML) services for up to 60 investors. Learn more here.

Closings

Closings must be executed on the Carta Closings feature using our subscription documents and Investor Questionnaire. Carta Closings allows you to invite partners and LPs to create a Carta account to complete closing steps. You are responsible for tracking LPs as they execute on subscription agreements.

You are responsible for maintaining your, your fund’s and related entities’ compliance with all applicable laws, rules, and regulations when accepting LPs into your fund and tracking LPs as they execute on subscription documents.

Bank Accounts

You will be responsible for setting up three bank accounts, one for each entity, with your chosen banking partner, the costs of which are not included in your Fund Formation fee. If you do not have a chosen banking partner, Carta can introduce you to our preferred banking partners.

To discuss any services that are outside of the scope addressed above, please talk to your Carta representative.

(1) Carta will support additional carry fee splits as requested

(2) Talk to your Carta representative for legal partner referrals to help with the listed documents.