A lawyer walks through what she checks in a private placement memorandum and operating agreement side by side: waterfall provisions, fee structures, and manager authority thresholds. Mismatches between documents can kill a deal, delay closing, or trigger investor withdrawals.
A sophisticated investor's attorney reviews your documents for specific things. I'll show you exactly what they're looking for. They request your full package: the PPM, the operating agreement, the subscription agreement. Then they review the PPM and the operating agreement side by side, not individually, but as a set. The first thing they check: the waterfall. What does the PPM say about the preferred return, the split, the promote structure? Then they open the operating agreement and find the same section. If the numbers don't match— different thresholds, different percentages, different calculation mechanics— they flag it. Next, the fee structure. Every fee— acquisition, management, disposition— needs to show up in both documents. If something is in the PPM but missing in the operating agreement, they note it. The manager authority thresholds. What can the manager approve without a vote? The PPM describes it one way, the operating agreement confirms it, or it doesn't. If they find something, you either spend time and money correcting documents before close, or the investor gets nervous and walks away. The 3 inconsistencies that come up most often and what to fix before the next raise are in the long form. See the link in the bio.
