My Spouse Is in VC — What Are All These Documents?

The paper trail you didn't sign up for

Every year — usually in March or April — a stack of documents arrives. Maybe it's a FedEx envelope. Maybe it's a DocuSign link at 9pm on a Wednesday. Your spouse says "just sign here" or "this is the K-1 for the accountant." You sign. You move on.

But what are these documents? What do they mean? And why should you care?

If your spouse works in venture capital or private equity, understanding these documents isn't just intellectual curiosity. These papers contain information about one of your family's most significant assets — carried interest. Whether you're happily married and planning ahead, or navigating a separation, knowing what you're looking at puts you in a fundamentally stronger position.

This guide walks through every major document type, in plain language, so you never have to nod along again.

The annual K-1 (Schedule K-1, Form 1065)

What it is

A K-1 is a tax document issued by each fund entity your spouse participates in. If they have carry in three funds, you'll receive three K-1s. They're typically issued between February and April, though fund K-1s are notorious for arriving late — sometimes not until September or October via amended filings.

What it tells you

A K-1 reports your spouse's share of the fund's income, losses, deductions, and credits for the tax year. The key sections to understand:

• Box 1 (Ordinary business income/loss): This reflects management fee income or operating losses. It's not carry — it's the fund's day-to-day business.
• Box 5 (Interest income) and Box 6a (Dividends): Income from portfolio companies that pay dividends or interest.
• Box 8 (Net short-term capital gain) and Box 9a (Net long-term capital gain): This is where carry distributions often show up. Long-term capital gains (Box 9a) typically represent profits from company exits held longer than a year. This is the money.
• Box 13 (Other deductions): Investment expenses, management fees, and fund operating costs.
• Capital account analysis (usually at the bottom or on a supplemental schedule): Shows beginning balance, contributions, distributions, net income/loss, and ending balance. This is one of the most valuable sections — the capital account balance tells you how much money is "in" the fund in your spouse's name.

Why it matters to you

The K-1 is one of the few documents that quantifies your family's interest in a fund with real numbers. It's not a projection or an estimate — it's what actually happened that tax year. If you're trying to understand the value of your carried interest, start with the K-1s.

A forensic accountant reviewing your K-1s across multiple years can identify patterns: Is carry being distributed? Is the fund profitable? Are there signs of upcoming exits?

Where to find it

Your CPA should have copies of all K-1s filed with your taxes. If you do your own taxes, they'll be attached to your Schedule E. You can also request copies from your spouse or directly from the fund administrator.

Distribution notices

What they are

When a fund sells a company or a portfolio company goes public and the fund sells shares, the profits get distributed to the partners. A distribution notice tells your spouse how much money they're receiving and from which exit event.

What they tell you

• Which company was sold or went public
• The total distribution amount
• How much is return of capital vs. profit (carry)
• Tax characterization (long-term vs. short-term capital gains)
• Your spouse's specific share

Why they matter to you

Distribution notices are concrete evidence that carry is real money, not just theoretical. They also help you understand the timeline — when did exits happen, how much came in, and how much is left in the fund.

In a divorce context, distribution notices are critical for establishing the value of carry and tracking what's already been received vs. what's still outstanding.

Capital call notices

What they are

Most fund professionals are required to put up some of their own money — often called "GP commitment" or "co-invest." When the fund needs this money, it issues a capital call. The amount of that commitment still in the fund (committed but not yet deployed or returned) is sometimes tracked as "Dollars at Work" (DAW).

What they tell you

• How much money your spouse needs to contribute
• When payment is due (usually 10-14 business days)
• What the money is for (new investments, fund expenses, etc.)

Why they matter to you

Capital calls come out of family money. If your spouse needs to wire $50,000 to the fund, that's $50,000 less in your family's bank account. Understanding these commitments matters for household budgeting and for understanding the total "cost basis" of your carried interest position.

The total amount contributed via capital calls is typically subtracted from carry distributions before your spouse receives their share. Think of it as the entry ticket that gets deducted from future winnings.

The LPA (Limited Partnership Agreement)

What it is

The LPA is the master document that governs the fund. It's a legal agreement between the general partners and the limited partners that spells out every rule: how money is invested, how profits are split, when carry is paid, and what happens if things go wrong.

Your spouse probably signed the LPA (or a related agreement) when they joined the fund or received their carry allocation.

What it tells you

• Waterfall terms: How profits flow from exits to partners. European (whole fund must clear the hurdle first) or American (deal-by-deal carry). This dramatically affects when carry is paid.
• Hurdle rate: The minimum return LPs must receive before carry kicks in. Typically 8%.
• GP/LP split: Usually 80/20 (80% to LPs, 20% to GPs as carry).
• Clawback provisions: Can the fund take back carry that's already been paid? Under what circumstances?
• Key person clauses: What happens if certain senior people leave the fund? This can affect the entire fund's trajectory.
• Transfer restrictions: Can carry be transferred to a trust, an LLC, or a family entity? This matters enormously for estate planning.
• ROFR (Right of First Refusal): Does the fund have the right to buy back carry before it can be transferred? This indicates how "locked in" the carry position is.

Why it matters to you

The LPA contains the actual rules that determine how much your carry is worth and when you'll see money. Without it, every estimate is based on industry-standard assumptions. With it, estimates become much more precise.

A note on confidentiality

LPAs are typically confidential. Your spouse may have signed an NDA or the LPA itself may contain confidentiality provisions. In a community property context, documents related to community assets may be discoverable regardless of NDA provisions — but this is a legal question for your attorney, not a financial one.

Side letters

What they are

Side letters are addendums to the LPA that modify terms for specific individuals. Think of them as "special deals." Your spouse might have a side letter that adjusts their vesting schedule, changes their clawback obligations, or grants them different economic terms than the standard LPA.

Why they matter

Side letters can significantly change the value calculation. A side letter that accelerates vesting on a change of control, for example, could make carry worth more in certain scenarios. A side letter that extends the clawback period could reduce its present value.

Carry allocation letters / carry plans

What they are

These documents specify your spouse's exact carry percentage. They might be formal letters from the fund, internal memos, or sections within employment agreements. Some funds have a "carry plan" document that describes the overall allocation among team members.

What they tell you

• Your spouse's carry percentage (e.g., 0.5% of GP carry)
• Vesting schedule (how much carry they've "earned" vs. what they'd forfeit if they left)
• Which fund vintages the allocation applies to
• Any conditions or performance targets tied to the allocation

Why they matter to you

The carry allocation percentage is the single most impactful variable in estimating what your carried interest is worth. The difference between 0.25% and 0.75% can be hundreds of thousands of dollars. If you know this number, your estimates improve dramatically.

Quarterly and annual fund reports

What they are

Funds typically send their GPs quarterly updates on portfolio performance. These may include:

• Portfolio company valuations (marked to current estimated fair value)
• Fund-level metrics (IRR, TVPI, DPI, RVPI)
• Company-by-company updates (new funding rounds, revenue growth, risks)
• Cash flow projections (expected distributions)

Why they matter to you

Quarterly reports are the most current snapshot of what the fund is worth. They're also the reports that institutional investors (pensions, endowments) use to value their own positions. If you have access to these, you have the best possible data for estimating your carry.

That said, you probably don't have access — and that's normal. These are internal fund documents. But knowing they exist helps you understand what information is available and what questions to ask.

Employment agreements

What they are

Your spouse's employment contract with the fund management company (which is separate from the fund itself). This governs salary, bonus, benefits, and often references the carry allocation.

What they tell you

• Base compensation and bonus structure
• References to carry (often pointing to separate carry plan documents)
• Non-compete and non-solicitation clauses
• Termination provisions (what happens to unvested carry if they're fired or quit)

Why they matter to you

The employment agreement often contains the first reference to carry allocation. It's also important for understanding what happens if your spouse leaves the fund — do they keep their carry? Do they forfeit unvested portions? This affects both the value calculation and the risk profile of the asset.

The signature requests you keep getting

Every year, you might be asked to sign documents related to the fund. These often include:

• Tax consent forms: Authorizing the fund to file tax returns on your spouse's behalf.
• Spousal consent forms: In community property states, the fund may require your signature acknowledging the carry arrangement. Read these carefully. They sometimes contain waivers or acknowledgments about transfer restrictions.
• K-1 delivery authorizations: Consent for electronic delivery of tax documents.
• Amendment acknowledgments: When the LPA is modified, all partners (and sometimes spouses) need to sign off.

A critical note: Never sign a document you don't understand. "Just sign here" is not sufficient explanation. If you're asked to sign something related to your spouse's fund, you have every right to read it, ask questions, and consult your own attorney before signing. This is especially important for spousal consent forms, which can affect your community property rights.

Documents you may not know exist

Some documents that affect your carry position may not come to you directly:

• LP advisory committee minutes: Record of investor governance decisions.
• Valuation reports: Third-party valuations of portfolio companies, often prepared by independent firms for institutional investors.
• Fund financial statements: Audited financials prepared annually by the fund's accounting firm.
• Secondary market transactions: If any LP has sold their position on the secondary market, the transaction price is a data point for valuation.

In a legal proceeding, your attorney can request many of these through discovery. Knowing they exist helps your attorney ask for the right things.

Organizing what you have

If you're trying to understand your family's carried interest position, start by gathering what you can access:

1. K-1s — your CPA has these. Get copies for every year and every fund entity.
2. Tax returns — look at Schedule E, which lists partnership income.
3. Distribution notices — check your spouse's email, physical mail, or fund portal.
4. Any documents you've signed — go through your records for spousal consents or acknowledgments.
5. Employment agreements — these are your spouse's property but may be discoverable in legal proceedings.

Even without any of these documents, you can get a directional estimate of your carried interest using public data about the fund's portfolio companies. The CarryForward calculator uses publicly available information to model Bear, Likely, and Bull case scenarios — no confidential documents required.

What to do next

Understanding these documents is the foundation. Here are your next steps:

1. Gather your K-1s and review them using our upcoming guide on reading K-1s like a forensic accountant.
2. Get a baseline estimate with the CarryForward calculator — it takes under 5 minutes.
3. Talk to your team. Share what you've learned with your attorney and financial advisor. The more they understand about carried interest, the better they can represent your interests.
4. Don't sign anything you don't understand. This is your right, and it's good practice regardless of your marital situation.

You don't need to become a fund expert. You just need to know enough to ask the right questions. And now you do.