attorney must include in the documents. Particularly, fund promoters should be most interested in two facets of fund organization: economics and flexibility. First, promoters want the largest promote, or carried interest, for themselves (the general partner/managing member) with the smallest preferred interest for the investors and the smallest clawback, if any, for the investors. These items play off one another, so a certain level of give and take usually occurs. Second, promoters should seek to reserve as much flexibility in the fund operations as possible. For example, some investors may push for a specific investment process and criteria to be adhered to by the fund. Promoters may want to avoid these types of very specific terms, for they may unnecessarily bind the hands of fund management. Overall, the types of documents that are utilized in fund organization remain constant across fund size and industry, although some industries may require ancillary agreements, such as a property management agreement for a real estate fund. However, terms of these documents can vary greatly depending on the investor pool and whether it is compnsed of individuals or institutions. Vanations in terms also will occur across specific types or industries of the fund. For example, real estate funds generally have different economics and concerns than a fund concentrating on leveraged buyouts. Logistical Changes and Trends: How Today's Legal Documents Differ from Those Used Several Years Ago There have not been wholesale changes over the past several years with respect to venture capital-related legal documentation. The basic documents have been around for many years and include private placement memoranda, partnership agreements, and other cntical documentation. However, there are new legal vehicles that did not exist years ago, such as limited liability companies and their related operating agreements. Within these traditional documents, there is a considerable amount of development and fluctuation that is ongoing relative to the terms of the fund. For example, ten years ago a clawback was not necessary for certain fund types. Today, it is unheard of not to have a clawback of some sort in every fund. Nothing demonstrates this concept more than the private placement 45