GOODWIN I PROCTER MEMORANDUM To Private Investment Fund Clients From Goodwin Procter LLP Re Pitfalls in Conducting a Private Placement Date September 23, 2013 Preparation and planning (especially with regard to common legal pitfalls) can be an important component in a smooth and successful fundraising. This memorandum provides a brief introduction on three types of legal restrictions that apply to private equity, real estate, venture capital and other types of private funds (collectively, "Private Funds") offering securities in the United States in a private placement: (i) regulation of private placements; (ii) limitations on the payment of success based compensation; and (iii) limitations on the making of gifts and political contributions in connection with raising capital from public or quasi-public institutions. This memorandum is not intended to provide complete guidance on these restrictions, however, and we encourage you to discuss your specific offering with us. Attached is a checklist of actions we suggest sponsors of Private Funds avoid while marketing a Private Fund. 1. Regulation of Private Placements A Private Fund planning to offer for sale its limited partnership interests or other similar interests in the Private Fund in the United States without registering such interests under the Securities Act of 1933 (the "Securities Act") must comply with the private placement rules of state and federal securities laws while marketing such interests. These rules apply to the Private Fund and to all persons acting on the Private Fund's behalf, such as each sponsor, fund manager, general partner or third party retained to assist in the offering. New federal rules governing private placements require that sponsors of Private Funds confirm that certain "bad actors" are not involved with the sponsor or the offering, and provide a new and, unfortunately, somewhat complicated choice in approaching private placements — whether to avoid gen