Post-Investment Management | The Private Markets Playbook - Sydecar

Post-Investment Management

The tax, compliance, and regulatory obligations of managing an SPV after close.

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A Guide to VC Fund Accounting and Taxation

Understand how venture funds and SPVs track money and report taxes. Read more

Exempt Reporting Adviser Filing Overview

What is an Exempt Reporting Adviser (ERA)? Advisers that are exempt from registration with the SEC are known as "Exempt Reporting Advisers" (ERA). Advisers can claim ERA status with the SEC in two ways: either by using the Private Fund Adviser Exemption (if they are managing less than $150M in assets) or the Venture Capital Fund Adviser Exemption (for advising a qualifying venture capital strategy fund). You can learn more about this requirement in the SEC’s "VC Exemption," Rule 203(l)-1 of the Advisers Act.

A Form ADV is a regulatory disclosure form required for investment advisers who must register with the U.S. Securities and Exchange Commission (SEC) or who are claiming an exemption from registration with the SEC. Compliance with State Laws While federal laws don’t necessarily require ERAs to file a Form ADV, advisers must also comply with their respective state laws. Generally, all states recognize the same exemptions as the SEC (the Private Fund Adviser Exemption and the Venture Capital Fund Adviser Exemption), but with the typical condition that the investment adviser must file a Form ADV to claim the applicable ERA exemption and provide "filing notice" to the state.

Consequently, to comply with local state laws, an adviser may need to file a Form ADV as an ERA. This website summarizes the notice filing requirements (i.e., Form ADV filing) for advisers in each state. Common requirements that would necessitate an adviser to file a Form ADV as an ERA include:

• Having a place of business in the state;
• Having more than 5 or 6 in-state clients.

Some states automatically require you to file a Form ADV and give it notice if you maintain a place of business in the state. Review your state’s laws on registration requirements as an ERA and determine if you have met the requirements to file a notice filing by filing a Form ADV as an ERA.

FIPVCC: The Information You Need to Report

As of March 17, 2026, DFPI has announced that implementation and enforcement of the FIPVCC will be suspended pending completion of the rulemaking and until final regulations are in place. Learn more

Form W-8: Applicability and Requirements

IRS W-8 Forms are a group of tax forms specifically for non-resident aliens and foreign businesses who have either worked in or earned income in the US. It declares the applicant’s status as a non-resident alien or foreign national and informs financial companies that they will be taxed differently than a resident. These forms are only for foreign people and entities without citizenship or residency. A brief description of each form is listed below:

• W-8BEN: Used by individuals to claim foreign status or treaty benefits.
• W-8BEN-E: Used by foreign entities to claim foreign status, treaty benefits, or to document chapter 4 status.
• W-8ECI: Used primarily by the payee or beneficial owner indicating that all the income listed on the form is effectively connected with the conduct of a trade or business within the United States.
• W-8EXP: Used by foreign governments, foreign tax-exempt organizations, foreign private foundations, the government of U.S. possession, or foreign central banks of issue.
• W-8IMY: Used by an intermediary, a withholding foreign partnership, a withholding foreign trust, or flow-through entity. Important note: Sydecar does not have the legal authority to advise which W-8 Form is most appropriate. Please contact your tax advisor with any questions or concerns. Read more

How to Wind Down an SPV

When a portfolio company shuts down, the SPV that held the investment does not automatically dissolve. The manager must initiate the dissolution process. Learn more

Round-Tripping: Offshore Tax Considerations for Fund Managers

Round-tripping refers to moving U.S.-sourced funds offshore and then reinvesting them in U.S. assets to benefit from foreign tax treatment. Learn more

Taxable Income vs. Accounting Income

Taxable income and expense may be treated differently than accounting income. In general, for the majority of SPVs, no taxable income or expense should occur during the year.

Convertible Note Interest: Under U.S. tax law, the interest that accrues on convertible notes during a period usually must be included in taxable income even when the company does not have an obligation to pay it during the period.

Passthrough Income from LLCs and Partnerships: If you invest in a fund that invests using a passthrough operating portfolio company, that operating company may pass-through taxable income without a corresponding cash distribution. This allocation may in turn flow through to your K-1. Learn more

The Basics of SPV Distributions: What Venture Managers Need to Know

An SPV distribution returns investment proceeds to Limited Partners (LPs) after a liquidity event like an acquisition or Initial Public Offering (IPO). Learn more

Understanding K-1 Line 13W

Line 13 W on Schedule K-1 (Form 1065) reports "other deductions" that pass through from a Special Purpose Vehicle (SPV) to investors but do not fit standard deduction categories. Learn more

What is an Exempt Reporting Adviser filing?

An Exempt Reporting Adviser (ERA) is an adviser to "Qualifying VC" funds that registers with FINRA and the SEC using the short-form Form ADV. Advisers claiming an exemption from registration with the SEC are known as Exempt Reporting Advisers. They are not required to file the full Form ADV with the SEC and instead submit an abbreviated Form ADV. Learn more

What You Should Know About Investor Rights: Pro Rata and Beyond

Investor rights affect whether you can keep ownership in your strongest companies, get the updates you need, and protect your position during an acquisition or other exit. Learn more

Writing Off a Zero-Value SPV Investment

Yes, the loss from an investment that has gone to zero will be reflected in your tax package for the year, and you can write it off for tax purposes. In most cases, this will be a capital loss. The deductibility of capital losses depends on your unique tax situation, so we recommend you consult with your tax advisor. Learn more