The Delaware LP, minus the Delaware-sized legal bill

Delaware offers a well-developed body of partnership law, a specialised Court of Chancery with deep expertise in corporate and fund disputes, maximum contractual flexibility in limited partnership agreements, no state income tax on out-of-state investment gains, and a fast, reliable filing system. These advantages have made the Delaware LP the default vehicle for US venture capital funds.

Most emerging VC managers rely on Section 3(c)(1) of the Investment Company Act (up to 100 beneficial owners) or Section 3(c)(7) (unlimited qualified purchasers) to avoid fund-level registration. Fundraising is conducted under Regulation D (typically Rule 506(b) for no general solicitation, or Rule 506(c) for verified accredited investors). Many VC managers also qualify as exempt reporting advisers under the Advisers Act venture capital fund exemption.

The Delaware LP formation itself takes 1 to 2 days. Drafting the LPA, PPM, and subscription documents typically takes 4 to 6 weeks. Total time from engagement to first close is usually 6 to 10 weeks, depending on the complexity of fund terms and investor negotiations.

A Delaware LP is a pass-through entity for US federal tax purposes — the fund pays no entity-level tax and each partner reports their share of income and gains on their own return. LPs investing in qualifying small business stock (QSBS) may be eligible to exclude up to 100% of capital gains under Section 1202 if certain conditions are met.

The core documents are the Limited Partnership Agreement (LPA), a Private Placement Memorandum (PPM), subscription documents, and side letter templates. Infra One generates and automates all of these through the platform at zero setup and legal fees.