What it is
Three documents make up a fund investment. The Limited Partnership Agreement (LPA) is the binding contract governing the fund. The Private Placement Memorandum (PPM) is the disclosure document: strategy, terms summary, risks, conflicts, tax. The Subscription Agreement is your application: your commitment, your representations, and the investor questionnaire.
How it works
If the PPM and LPA disagree, the LPA generally controls, so read the LPA’s waterfall, fees, governance and transfer articles carefully.
Rule 506(c) lets a fund advertise publicly, but every investor must be accredited and the fund must take reasonable steps to verify it, not just accept a checkbox. Methods include reviewing tax returns or W-2s, bank/brokerage statements, a letter from a CPA, attorney or registered adviser, or (per the SEC staff’s March 12, 2025 no-action letter) a minimum investment of at least $200,000 for individuals or $1,000,000 for entities with written representations that the investment isn’t third-party financed.Accredited generally means income over $200,000 ($300,000 joint) in each of the last two years, net worth over $1 million excluding your home, certain professional licenses (Series 7, 65, 82), or qualifying entities.
Good for LPs vs. watch out for
✓ Good for LPs
- Complete LPA, PPM and subscription documents provided before you commit
- Time to review with your own attorney
- Clear e-signature consent and version-stamped documents
- Real accreditation verification (protects all LPs and the offering)
⚠ Watch out for
- Only a pitch deck and a signature page
- Pressure to sign quickly
- PPM terms that differ from the LPA
- A 506(c) offering that accepts self-certification only
How Story Samurai Investments handles it
Our template package includes all five documents: the LPA, PPM, Subscription Agreement & Investor Questionnaire, Risk Factors Acknowledgement and ESIGN/UETA Consent, each version-stamped with a SHA-256 fingerprint. In the e-signature process, each must be scrolled to the end and confirmed before signing, and subscriptions are accepted only after accreditation is verified and the GP countersigns (PPM §2, §14; Subscription Agreement §2–3). All are templates pending attorney review.
Based on our template documents (TEMPLATE, DRAFT FOR ATTORNEY REVIEW, NOT FOR USE). The final Limited Partnership Agreement controls.
Where to find it in the documents
- LPA (all)
- PPM §2, §14
- Subscription Agreement Parts A–C
- ESIGN/UETA Consent