Individuals often decide to form PE firms based on their investment prowess and visions of earning substantial carried interest in the future. That can cause founders to get out over their skis, however, as there are several other factors to consider and address before the first fund is ever closed or the first investment is ever made. K&L Gates recently hosted a webinar examining those and other key issues that frequently arise when new private fund managers are structuring their businesses. The program featured K&L Gates partners Edward Dartley, Robert H. McCarthy Jr., and Adam J. Tejeda. This first article in a two-part series provides guidance on formalizing arrangements between co‑founders at the outset; creating an appealing situation for key employees and third-party investors; and structuring vehicles to optimize tax treatment. The second article will describe how to setup the firm to avoid registration as an investment adviser, along with providing tips for setting up profits interests and other incentive compensation options. For additional commentary from K&L Gates, see “What Role Should the GC or the CCO Play in the Audit of a Fund’s Financial Statements?” (Feb. 4, 2020); and our two-part series “K&L Gates-IAA Panel Addresses Cyber Insurance Plans for Investments Advisers”: Part One (Jun. 25, 2015); and Part Two (Jul. 2, 2015).