Which service providers should a new VC fund hire?

The eleven roles, and which are unavoidable

Each line says what the role does and when it is normally needed.

• Fund counsel. Structures the fund, drafts the partnership and subscription documents, and advises on the offering route. Needed before anything is shown to an investor.
• Management company counsel. Advises the firm rather than the fund: entity structure, employment, equity among partners, and carry vehicle. Frequently the same firm, and worth understanding as a distinct mandate.
• Fund administrator. Runs capital calls, distributions, allocations, investor records, and the books. Needed before a first close, and the appointment most allocators check first.
• Auditor. Audits the fund's financial statements. Appointed before the first period ends rather than when the report is due.
• Tax adviser. Fund and manager filings in every jurisdiction with a claim. Needed at formation, because structure decisions are tax decisions.
• Compliance support. Policies, filings, and a review cadence, sized to your regulatory status. Frequently outsourced for a first fund.
• Banking. Fund accounts with controls over who may authorise payments, separate from the management company's.
• Insurance. Management liability and related cover, which some allocators ask about directly.
• Cybersecurity provider. Controls, monitoring, and incident support, which can be a managed service rather than a person.
• Data room provider. Access control, logging, and version control, which is the difference between a room and a folder.
• Reporting and portfolio monitoring technology. Optional at a first fund, and the thing most likely to be bought too early.

The nine selection questions

Apply these to every appointment. Blueprint's own framework, built around the failures that show up later rather than around the pitch each provider gives.

• Fit for your size. Does this provider serve funds like yours, or would you be their smallest client, which is where service quality quietly degrades?
• Allocator acceptance. Do the institutions you are targeting recognise this provider? An unknown administrator is a question you will answer repeatedly.
• Conflicts. Does the provider serve anyone whose interests could collide with yours, including funds you compete with for allocations?
• References. Speak to two of their clients, including one who left. The second call is the informative one.
• Cost, and what drives it. Get the fee schedule, the assumptions behind it, and what happens when transaction volume rises.
• Scalability. What changes at fund two, or at three times the position count, and what that costs.
• Service levels. What response times are promised, who your named contact is, and what happens when that person leaves.
• Data ownership and portability. Who owns your records, in what format you get them back, and how long a transition takes. Ask before signing, because it is unanswerable afterwards.
• Transition risk. What it would take to move, which is the question that decides how much leverage you retain.

Cost, and the part of it your investors pay

Formation costs are usually borne by the fund up to a cap, which makes them an alignment question rather than only a budgeting one.

ILPA's May 2026 guidance on fund formation costs, titled The Alignment Gap, describes organisational expenses as the legal, administrative, and compliance costs incurred during fund formation, and notes that they are typically directed by counsel the general partner selects, without limited partner involvement in selecting or budgeting them. It recommends expense caps, equitable cost sharing where budgets are exceeded, and greater transparency about legal fees and budgeting. It publishes no dollar figure and this page states none.

The practical implication for a first-time manager is to have the conversation early rather than at closing: know what your formation budget is, what the cap in your documents will be, and what happens if the budget is exceeded, because an allocator reading the guidance above will ask.

How to sequence the appointments

Order matters because early choices constrain later ones.

• Counsel first, because structure and domicile decisions determine what every other provider has to support.
• Tax adviser alongside counsel, since the structure is a tax decision as much as a legal one.
• Administrator next, early enough to influence how the fund's records will work rather than inheriting a setup.
• Auditor before the first period closes, and ideally before the first close so the administrator and auditor can align.
• Compliance, banking, and insurance before marketing begins in earnest, because each touches what you may do and say.
• Data room before outreach, since it is the first operational artefact an allocator will actually use.
• Monitoring technology last, and only when the portfolio makes it necessary.

What limited partners are testing

The provider list is read as a proxy for judgment.

• Are the four core providers appointed, with dates?
• Does the manager know what each provider does and does not do?
• Was each chosen for a reason, or because somebody recommended them at a conference?
• Are there conflicts, and has the manager thought about them?
• Is the arrangement affordable at this fund size without the manager subsidising it personally?

What appointing providers does not do

It does not transfer responsibility. An administrator can run your capital calls and cannot be accountable for your fund being run properly, and allocators are explicit that outsourcing a function does not outsource the obligation.

This page names no provider and states no fee. Both depend on jurisdiction, structure, and fund size, and no verified source publishes a market range.

This page is educational and general. It is not legal, tax, accounting, or insurance advice, and provider selection and engagement terms should be reviewed by counsel.