What is a member-managed vehicle?
A member-managed vehicle is a single-purpose Delaware LLC formed to facilitate a secondary transaction—the purchase of an existing LP interest in a fund or SPV.
Unlike a traditional AngelList SPV, the vehicle does not have a general partner or investment adviser with discretion over investment decisions. Instead, governance rights vest with the members (the investors) under the LLC agreement. In practice, the vehicle is designed to be passive: most matters are pre-addressed in the operating agreement, so members are not expected to actively manage or make ongoing decisions.
Belltower serves as the administrative manager, handling operational responsibilities such as tax filings, K-1s, and other administrative matters, but does not make investment decisions on behalf of the vehicle.
What is my liability as an investor?
As a member of a Delaware LLC, your liability is generally limited to the amount of capital you invest. You are not personally responsible for the vehicle's obligations beyond your investment, except as otherwise provided by applicable law or the LLC agreement.
While investors collectively hold the governance rights that would otherwise belong to a manager or general partner, the vehicle is intended to be passive. After acquiring a single existing LP interest, it is generally expected to hold that interest without making new investment decisions. The operating agreement pre-addresses most governance matters, so active member participation is not typically required.
Why is it structured this way?
This structure is designed specifically for secondary transactions.
When you invest through a member-managed vehicle, you are purchasing an existing LP interest in an already-established fund or SPV rather than making a new primary investment. The vehicle acquires the seller's interest, holds it on behalf of its members, and passes through any distributions or proceeds from the underlying investment.
Because the underlying investment has already been selected, the vehicle does not require an investment manager with ongoing discretion to source or make new investments. Instead, it serves as a simple holding vehicle for the acquired interest while providing a governance framework for its members.
What are the fees?
Because the vehicle has no investment adviser or general partner, investors are not charged the typical 2% annual management fee associated with traditional fund structures.
Instead, investors pay the following one-time fees at closing:
- Broker fee: A one-time fee for facilitating the secondary transaction
- Admin fee: A standard one-time administrative fee ($8,000)
- Reset carry: A carry fee payable to the underlying fund's GP
There are no ongoing management fees for the life of the vehicle.