Master partnership overview
A master partnership is typically structured as a limited partnership (LP) and serves as an umbrella for multiple investment vehicles established by a general partner (GP).
The master limited partnership (MLP) (e.g., ABC Funds, LP) functions purely as an organizational structure and does not directly make investments. Within this framework, leads can manage Special Purpose Vehicles (SPVs) and Funds as series or standard vehicles under the master partnership.
Structure of funds and series
Each vehicle is structured as a series under the master partnership. Legally, each series operates as a distinct entity for all purposes, ensuring the separation of liabilities and assets.
Practical example: Fund I, a Series of ABC Funds, LP
- Fund I is the series LP that receives investor capital and holds legal title to investments.
- ABC Funds, LP is the master LP, registered in Delaware.
- Fund I, a series of ABC Funds, LP is the full legal name of the investing series LP.
This structure provides flexibility, legal separation, and streamlined fund management for leads operating multiple investment vehicles under a single master partnership.
AngelList supports the formation and maintenance of Delaware series limited partnerships (series LP) or Delaware limited partnerships (standard LP). Various fees and adviser-related restrictions apply to each structure.
Series LP vs. standard LP - key differences
Under the series limited partnership model, each fund or SPV is created as a series LP of a master limited partnership.
- The master LP is registered in Delaware under Delaware law. Each individual series LP is created under Delaware law pursuant to the master partnership agreement as a distinct legal entity but is not registered in Delaware.
- Investors invest in individual series, and each series holds assets distinctly from each other. Each series is also taxed as a distinct partnership.
- When a new series is added to a master LP, it will follow the naming convention: [Series Name], a series of [Master LP Name], L.P.
- Series limited partnerships are the default structure used for any new fund or SPV on the AngelList platform.
Under the standard limited partnership model, each fund is the standard limited partnership itself. There are no series or master levels in a standard LP.
- The standard LP is registered in Delaware under Delaware law.
- Investors invest directly in the standard LP. The standard LP holds the assets directly and is taxed as a partnership.
- The standard LP cannot form series. Any subsequent new vehicles formed on AngelList must be created as a new entity.
- Standard LPs under this model follow the naming convention: [Standard LP Name], L.P.
- Standard LPs are only offered under limited circumstances.
Filing requirements
The default structure on the AngelList platform is to form SPVs and funds using the series limited partnership model. When forming an investment vehicle, AngelList will ask for the following:
- Whether the LP should be self-managed or AngelList-managed.
- Standard LPs must have a designated general partner. Series LPs must have a designated general partner at both the master and series levels.
- For AngelList-managed series LPs, the general partner will be Fund GP, LLC, which is an entity managed by AngelList.
- For self-managed series LPs or standard LPs, the general partner can be any entity of the lead’s choosing. If this option is selected, AngelList will still require information about the entity for filing purposes.
- If AngelList forms a series LP, all underlying series will default to having the same general partner as the master LP. Leads should consider this when selecting the general partner entity for a self-managed master LP.
- A name for the master LP.
- When forming the master LP, AngelList will ask for the desired name. Most fund managers use this as a branding opportunity on portfolio company cap tables.
- The name must be available in the Delaware registry.
Master LP formation fees
As of January 1, 2024, AngelList charges a one-time fee of $4,000 for the formation and ongoing maintenance of each new LP, whether series or standard. This fee covers the new LP’s Delaware formation fee, annual Delaware franchise fees, and all registered agent fees for a standard 10-year term.
- The $4,000 fee will be waived for the formation of one LP if the lead is launching a Venture Fund or Rolling Fund.
- If a series LP is formed, no additional fee is charged for creating additional series of funds or SPVs under the master LP.
If an SPV is launched as a series of a new master LP, AngelList will add the $4,000 expense to the cost of the SPV.
- This fee is not eligible as part of the 10 percent fee cap. Fund leads should expect to cover this cost out of pocket to avoid unduly burdening LPs with fees.
- Alternatively, fund leads can elect to use an AngelList consolidated master LP, such as AngelList Funds 2024, LP. AngelList will waive the $4,000 fee for fund leads who choose to use the consolidated master.
AngelList consolidated master
AngelList provides SPV fund leads the option to form new SPVs under the consolidated master at no charge. To choose this option, fund leads must agree to the following guidelines:
- The SPV must be AngelList-advised and invest in qualifying investments.
- The consolidated master cannot support self-advised SPVs or SPVs investing in non-qualifying investments.
- If an SPV’s investment becomes non-qualifying after it is launched on the consolidated master, AngelList will have to transition the SPV into a self-advised SPV. The new self-advised SPV will require the formation of and payment for a new master LP.
- The fund lead cannot migrate an SPV formed under the consolidated master off AngelList, as it is currently not possible to remove an individual series from a master LP. AngelList must support the SPV until the SPV winds down.
Summary
For additional information on the relevant Delaware law, see: Title 6: Commerce and Trade, § 17-218 Series of limited partners, general partners, partnership interests or assets.