Frequently Asked Questions
Selling shareholders are current and former employees, early investors, and advisors. They are typically selling only a portion of their holdings in order to 1) cover costs associated with exercising and paying taxes on the remainder of their shares 2) life events such as purchasing a home or preparing for a child and to 3) diversify their holdings.
Your investment in most funds would be taxed like any other fund investment. Our networks funds are taxed as partnerships, meaning that the fund’s gains and losses would pass through to its investors. Generally, if an investment is held for more than one year before its disposition, any income resulting from that investment would be taxed at the long term capital gains rate. On an annual basis, Investors will receive a Schedule K-1 that updates them on their investment. Note: we are not tax experts and have provided this discussion for informational purposes only and not as personal tax advice. You should consult your tax advisors for guidance specific to your circumstances.
Yes, most funds send your countersigned Subscription Document indicating your membership in the Fund. You should also receive a Welcome Letter from the managers outlining the Series of participation and breakdown of your investment.
Yes. There are funds in our network that accommodate investments from self-directed IRAs.
Yes. Most funds have a third party Fund Administrator, who should issue K1’s annually. Our network should also update you on any material impact to your investment (company news, new funding rounds, secondary transactions or indicators to new valuation).