How to Read a PPM and LPA Without Losing Your Mind (Hint: AI Can Help)
Key sections, red flags, and AI prompts every LP should know
If you’re like most investors, you’d rather stab your eyes with a fork than plow through 200+ pages of legal documents - the Private Placement Memorandum (PPM) and the Limited Partnership Agreement (LPA). And after spending tens (hundreds?) of hours on due diligence, it’s tempting to assume the GP’s lawyer is looking out for you.
Hate to break it: they’re not. The lawyer drafting the PPM works for the GP, not for you.
That leaves most LPs in a tough spot. Unless you’re an endowment with an in-house legal team, the responsibility to review these documents falls squarely on your shoulders. We’ve shared insights from securities attorneys before. Today, we’re taking a different angle: a practitioner’s guide to reviewing subscription documents.
👉 And stick around until the end: I’ll share the AI prompts I use to review PPMs and LPAs. They’ll help you shortcut the process and walk away with a list of questions for your attorney (if you choose to engage one).
✨Read more on using AI to simplify your due diligence process here.
⚠️ Important: This content is for educational purposes only. It is not legal or investment advice, and should not be relied on as such. Always consult a qualified attorney before making any investment decisions.
Investor Community Spotlight: Boulder Investment Group (BIG)
The number one question I hear from fellow LPs is, “How do I see more quality deals?” A close second: “Where do I meet other LPs?”
BIG answers both. It’s a volunteer-run investment club of 950+ sophisticated investors (87% are qualified purchasers). Since 2009, members have invested more than $1.4B in offerings presented through the group.
Community: meet and network with other investors.
Curated access: only opportunities with a proven track record and verified member referrals make the cut.
Deal flow + education: pitch meetings every six weeks feature both investments and expert perspectives.
Learn more and apply for membership here:
(Full disclosure: this post is NOT sponsored. I’ve been a member since 2022 and currently serve on the board of directors.)