Free guide · 14 pages · 15-minute read
12 Questions to Ask Before Investing in a Private Fund
A plain-English due-diligence guide for accredited investors, whichever fund you choose. Use it on any sponsor, including us.
- The 12 questions every sponsor should answer in writing, grouped into four parts
- What a good answer looks like, the red flags, and which documents to request
- A printable scorecard to compare sponsors side by side
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Download the guide (PDF) Read it onlineWant PFD's written answers to all 12 questions? Request the PFD Answer Pack or book 15 minutes with Rob Carlsson.
Why this guide exists
Most private-fund decisions are made with one document and one sales call
Private funds can offer access to assets the public markets don't. They also ask you to trust a sponsor with capital you can't easily take back. Too often, investors are handed a private placement memorandum, a sales call and a deadline, and little else.
This guide gives you a structure for asking better questions. It draws on investor guidance published by the SEC and FINRA, explains what a good answer looks like, and shows which documents to ask for, so you can judge any sponsor on the same terms.
"If a sponsor won't answer these questions in writing, that is your answer."
What's inside
Twelve questions, in four parts
The sponsor
- Who runs the fund, and what can I verify about them?
- Has the sponsor raised and returned capital before?
- How is the sponsor paid, and where do its interests conflict with mine?
The asset
- What exactly does the fund own, and how does it make money?
- How is the collateral valued and verified, and by whom?
- What has to go right for the return to be paid?
The money
- Is the return fixed, preferred or projected, and what happens if income falls short?
- Where does each distribution come from?
- Who holds the cash, and who audits the books?
Liquidity, reporting & exit
- How and when can I get my money back?
- What will I receive, and how often?
- What happens if things go wrong?
For every question: why it matters · what a good answer looks like · red flags · documents to request.
Also inside
Tools you can use on your next sponsor call
Red flags at a glance
A one-page summary drawn from SEC and FINRA investor alerts: pressure to act now, claims of SEC approval, missing documents, unclear sources of return.
Printable diligence scorecard
Twelve rows for the sponsor's answer, the document you received, and whether you're satisfied. Bring it to every call.
Private funds in two minutes
Regulation D, accredited-investor tests, the PPM, and what a Form D filing does and doesn't mean, in plain English.
Who it's for
Written for investors who prefer evidence to enthusiasm
Accredited investors comparing funds
You're weighing more than one private offering and want a consistent way to compare sponsors.
Anyone who has been pitched a private deal
You've heard an attractive number and want to know which questions separate a sound offering from a weak one.
Advisors, CPAs and family members
You help someone else make these decisions and want a checklist that holds up to scrutiny.
A note from PFD Capital
We wrote this guide because we want to be asked these questions.
Every sponsor, including us, should be able to answer all twelve in writing, with documents to back each answer. Use this guide on any fund you're considering. If you'd like to see how PFD answers them, request our Answer Pack after you download the guide.
Rob Carlsson
[TITLE], PFD Capital
Questions
Before you download
Is the guide really free?
Yes. There's no cost and no obligation. You'll get an instant download and a copy by email.
Is this a sales pitch for PFD's fund?
No. The guide is educational and contains no performance figures or offering terms. It's designed to be used on any private fund. PFD's own answers to the 12 questions are available separately, only if you ask for them.
Do I need to be an accredited investor to download it?
No, anyone can read the guide. PFD's investment offerings, however, are available only to verified accredited investors through a private placement memorandum.
What happens after I submit the form?
You'll see a download link right away and receive the guide by email. If you opted in to calls and texts, Rob Carlsson may reach out personally to answer questions. You can unsubscribe at any time.
Will you share my information?
We don't sell your personal information. See our Privacy Policy for details.
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Ask better questions before you invest
Twelve questions, the answers to look for, and a scorecard you can use with any sponsor.
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