“You’re gonna have five hundred LPs in your fund.”
Doug Dyer has been on both sides of the table—first as an LP investing in funds like Andreessen Horowitz, now as CFO at Chapter One.
His biggest realization from switching sides? “Having a clear structure and documented process internally is super important for every fund manager, and I didn’t fully appreciate that as an LP.”
The TL;DR: Fund operations isn’t glamorous, but it’s where emerging managers either build for scale or create problems that haunt them for years. Our panel got tactical on what actually works—from AI workflows to QSBS traps to year-end prep—based on what they’ve learned the hard way.
The panel:
Chris Harvey – Principal lawyer at Harvey Esquire, works exclusively with emerging managers under $200M
Doug Dyer – CFO at Chapter One, former LP who invested in funds like Andreessen Horowitz
Yohei Nakajima – Founder of Untapped Capital, just closed Fund 2, known for building in public and Baby AGI
Watch the full conversation below, or keep reading for the most impactful insights. 👇
This virtual event was presented by Carta
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AI Workflows That Actually Work
Yohei shared how his team creates strategic documents now:
Have a meeting → transcribe it with a note-taker → feed the transcript into Claude/ChatGPT → get a complete document.
He used this exact process to plan their Fund 3 strategy right after closing Fund 2.
“These models are good enough now that we can turn an hour-long discussion into actionable plans with Gantt charts that become trackable tasks in Notion.”
His portfolio tracking workflow might be even more useful: Every note added to a portfolio company in their CRM runs through an LLM to extract structured data and update the company summary automatically. “We’re never scrounging for data from a whole bunch of different places now.”
The QSBS Trap That Costs Real Money
Chris was emphatic about warehouse investments: If you invest personally before the fund forms, planning to transfer it in later, your LPs likely lose QSBS tax advantages on that deal.
The timing matters in the other direction too. Get LPs into your fund as soon as possible during your closing period—anyone who joins after you’ve made investments loses QSBS on those earlier deals.
This is real money that affects whether your LPs get meaningful returns on successful exits.
Mistakes That Create Problems Later
Building your data room during fundraising: Yohei was direct about his Fund 2 experience:
“I started raising on the heels of Baby AGI going viral, rushed into it, and ended up building the data room while pitching LPs. Some early LPs saw my narrative shift mid-fundraise as I incorporated feedback. Not ideal.”
Not engaging your auditor early: Chris has seen funds promise audits to LPs, then discover their auditor is at capacity when audit season arrives. If you can’t deliver the audit you promised, you’re in violation of your LPA. Get an engagement letter now and identify a backup.
Not documenting processes from the start: Doug’s point about structure applies to funds of all sizes. Document your playbooks for capital calls, valuations, compliance, and portfolio tracking. He shares a free template on his Substack. The principle: structure should exist from day one, sized to your current state.
What’s Actually Changing in Fund Law
Chris mentioned upcoming legislation that could significantly change fund structures: The DEAL Act and ICANN Act would let emerging managers raise up to $50M with 500 LPs (up from $12M with 250 LPs) and have up to 50% non-qualifying investments.
Doug’s reaction to 500 LPs:
“You’re giving me anxiety.” That’s 500 capital calls, 500 tax inquiries, 500 relationships. Chris’s take: “Your fund ops have to be very streamlined, and you would have to lean into AI.”
The Venture5 Take
The pattern across this conversation was striking: the operational problem discussed was solvable, but only if you dealt with it early.
Build your data room before you start pitching. Engage your auditor before year-end rush. Document your processes before you have 50 LPs asking the same question. Set up AI workflows before manual processes become overwhelming.
The emerging managers who treat operations as “figure it out later” work will spend Fund 2 and Fund 3 cleaning up messes from Fund 1. The ones who build operational systems early—sized appropriately to their current state—get to focus on what actually matters: finding great companies and supporting founders.
Watch the full conversation for tactical details on capital call planning, service provider selection, and the specific tools the panelists use daily.
