Ep. 27- Understanding LP Agreements, GP Stakes & Fund Governance

In this interview, Sean Smith, Managing Partner at Search Fund Ventures and Founder of SMB Investor Network, sits down with Michael Huseby, founder of The Investment Lawyers, to break down the real-world legal dynamics behind LP agreements, fund structures, 506(c) fundraising, governance rights, waterfalls, fund expenses, and minority protections. Michael shares insights from his work across private equity, SMB acquisitions, real estate, private credit, venture capital, and SPV formation—explaining what LPs should look for, how GPs are negotiating deals today, and why trends are shifting toward cash-flow strategies. Topics covered include: - Why Michael left Big Law to start his own firm - His new book *Fundamentals* and why he “shares the sauce” - LP trends: cash-flowing strategies, anchor investors, and GP-stake asks - The rise of 506(c) and recent SEC guidance on accreditation - Governance: top protections LPs should check for in documents - Fund expenses: what’s reasonable, what’s not - Waterfall structures: simple to advanced, including GP catch-ups and dual waterfalls - How LPs should evaluate liquidity, continuations, and risk - Key pitfalls LPs commonly miss in documents - Why clear marketing disclosures protect GPs from securities issues Looking for an specific minute? 00:00 Introduction to Limited Partnerships and LP Agreements 02:39 Transitioning from Big Law to Independent Practice 05:33 Current Trends in Investment Strategies 08:19 Understanding GP Stakes and Investor Influence 10:59 The Shift to 506C and Public Fundraising 13:25 Governance and Minority Protections in Investment Documents 16:28 Key Considerations for Limited Partners 19:09 Liquidity and Fund Structures 21:35 Understanding Fund Expenses 24:41 Waterfall Structures in Fund Distributions 36:15 Conclusion and Resources for Further Learning If you're an investor, operator, or GP raising capital, this episode delivers a practical, plain-English deep dive from one of the most active fund attorneys in the SMB and alternatives ecosystem. **👉🏻 Subscribe for more interviews like this and share your thoughts in the comments.** **📩** Connect with the speakers: - Michael Huseby – The Investment Lawyers: https://www.til.law/ - Michael Huseby LinkedIn: https://www.linkedin.com/in/michael-bjorn-huseby/ - Fundamentals Newsletter: https://www.til.law/#newsletter - Sean Smith LinkedIn: https://www.linkedin.com/in/sean-smith-47ab2a70/ - SMB Investor Network: https://www.smbinvestornetwork.com/ #smbinvesting #privateequity #searchfunds #fundformation #limitedpartners #506c #alternativeinvestments #privatecredit #fundgovernance #investoreducation