In contrast, a private equity investment thesis is an evidence-based case in support of a particular investment opportunity. It usually begins with a concise argument illustrating how the potential deal supports the fund's general investment strategy. The thesis then provides details that substantiate this preliminary conclusion. For more details https://financial-equity.com/credit-and-debt/the-impact-of-a-housing-market-crash-on-your-mortgage/ As partnerships, private equity funds and hedge funds generally qualify as flow-through entities (also known as pass-through entities). This means that rather than being subject to taxation themselves (as corporations are), they pass their entire tax liability onto their investors, escaping double taxation. Limited partners will receive a Schedule K-1 from the fund each year. It breaks down their share of the fund’s profits or losses, which they must then report on their individual tax returns. My father had an opportunity to come to this country to study — this was in 1991, when I was four. So he went, moved over by himself. My mom moved over six months later, so I was actually living with my grandparents. They would take me to school, they basically raised me for a little bit, and I moved over in 1992, around the summer when I was 5 years old. Along with the opportunity and benefits of investing in venture capital funds, the investor must be aware of the tax consequences as they relate to sourcing, timing, and character of income. These can be summarized in four main areas all of which should be part of any due diligence policy. Save Article Icon A bookmark. Venture capital firms make money primarily through returns on their investments when their portfolio companies achieve a successful exit, such as an IPO or an acquisition. VCs typically aim for a high return on investment (ROI) to compensate for the high risk of investing in startups. They may also charge management fees to cover their operational costs.