How To Create a Venture Capital Fund

There are seven main steps you must undergo if you want to form a venture capital fund:

1. Create an LLC entity that will manage the fund (Example: Kleiner Perkins, LLC)
2. Create a Limited Partnership for the fund (Example: Kleiner Seed Fund I, L.P.)
3. Create a Private Placement Memorandum: Have either yourself, or an attorney, draft a private placement memorandum. With attorneys, these can be priced well over $3,000. Some attorneys even charge $20,000. However, you can also have one done for yourself, using this template for much less: here
4. Have your potential investors complete The Investor Questionnaire
5. Have your potential investors read and sign the subscription agreement
6. Have your potential investors sign a Letter of Intent
7. Have your potential investors return the letter of intent and subscription agreement (The close)

You must also have a compelling presentation, which I recommend using the philosophy from the guys of venture hacks here (obviously, tailor it to limited partners/vc fund-raising), and a set of vetting protocol in place. Finally, and most important, you must have a unique and compelling story that makes others want to invest in you.