Locke creates five feeder funds for each master fund on the platform. Each feeder is a separate legal entity that invests directly into your master fund. The five feeders segment investors by type:
Your Master Fund
No structural changes required
AI Feeder
FO Feeder
RIA Feeder
INST Feeder
QP Feeder
Token Holders
Token Holders
Token Holders
Token Holders
Token Holders
Why this structure? Each feeder operates as a parallel 3(c)(1) fund with its own 100-beneficial-owner limit. Five feeders means capacity for up to 500 individual investors per master fund without triggering Investment Company Act registration. It also provides clean investor segmentation — your family office LPs are in a different vehicle than your accredited individuals — and regulatory clarity for each investor class.
What you report: Master fund level plus feeder fund balances. That’s it. Locke handles everything downstream: pro-rata allocation to individual token holders within each feeder, ILPA-compliant capital call and distribution notices, cap table management including secondary trades, and individual K-1 tax documents. You never interact with individual investors unless you choose to.
Each LP’s fund interest is represented as a compliant digital security token on the Polygon blockchain. This is not a public crypto token. It is not traded on Coinbase. It cannot be held in a random wallet.
Locke uses ERC-3643, the permissioned token standard designed specifically for regulated securities. Only investors who have completed KYC/AML verification and accreditation checks can hold these tokens. The smart contract enforces this at the protocol level — an unverified wallet literally cannot receive tokens.
Institutional-grade, low-cost, Ethereum-compatible. Used by Franklin Templeton, JPMorgan, and the Singapore Monetary Authority.
1 token = $1 of commitment. Simple, auditable, no fractional complexity. A $500K commitment = 500,000 tokens.
Secondary trades settle via burn-and-mint: seller's tokens are burned, buyer's tokens are minted. Clean cap table, full on-chain audit trail.
The GP never touches blockchain. No wallets, no gas fees, no key management. Your experience is uploading an Excel file and approving trades in a web portal.
The bottom line: Tokenization is the infrastructure layer, not the product. Your LPs don’t need to understand blockchain any more than they need to understand how SWIFT transfers work. They see a clean portal with their holdings, documents, and transaction history. The blockchain just makes the cap table immutable, auditable, and instantly transferable.
Your only recurring obligation is to complete and upload the standardized 6-tab reporting template at quarterly intervals. The template covers:
GP Uploads Excel
15 minutes, once per quarter
Locke Processes
8 engines run automatically
LPs See Updates
Portal, notices, documents
Once you upload, Locke runs 8 processing engines automatically:
Capital Call Engine
Pro-rata allocation to individual token holders within each feeder
Distribution Engine
Distribution amounts per LP based on ownership percentage
NAV Engine
Updated NAV per token across all feeders
Notice Engine
ILPA-compliant capital call and distribution notices to each LP
Exchange Engine
Updated secondary market pricing and trade matching
Tax Engine
Individual K-1 documents for every LP
Feeder Fund Engine
Feeder-level financial statements and compliance reporting
GP Upload Engine
Data validation, normalization, and error checking
LPs can list their tokenized fund interests for sale on the Locke Exchange. This gives your investors something PE has historically lacked: a path to liquidity before the fund winds down. For you, it means happier LPs and a new revenue stream.
Every trade requires GP approval. You retain full control over your cap table. No trade settles without your explicit sign-off. You can reject any trade for any reason — ROFR, investor quality, concentration limits, or simple preference.
| Transaction Size | Fee | GP Revenue Share (20%) |
|---|---|---|
| Up to $1M | 3.0% | 0.60% |
| $1M – $2.5M | 2.5% | 0.50% |
| $2.5M – $10M | 2.0% | 0.40% |
| Above $10M | 1.5% | 0.30% |
GP revenue share is permanent — every trade, every tier, for the lifetime of the fund on the platform.
Settlement uses the burn-and-mint model: the seller’s tokens are burned, and new tokens are minted to the buyer. This is atomic — it happens in a single blockchain transaction. No transfer agent delays, no paperwork, no reconciliation headaches. The cap table updates in real time.
On structural integrity: Locke’s blockchain-native architecture eliminates the conflict of interest inherent in platforms that act as both cap table provider and secondary marketplace. When the cap table lives on a centralized database and the marketplace operator controls that database, the operator has both motive and means to manipulate. On Locke, the blockchain is the cap table. There is no separate database to conflict with. Every entry is cryptographically signed, timestamped, and publicly auditable. The platform cannot alter the record without detection.
Locke handles the entire investor qualification workflow under Rule 506(c) of Regulation D. This means all investors must be verified accredited investors — not self-certified (with one exception, below). You never touch accreditation paperwork.
For investments of $200K or more, investors may self-certify accredited status per the March 2025 SEC no-action letter. This streamlines onboarding for your most significant LPs while remaining fully compliant.
Identity verification, sanctions screening, and anti-money-laundering checks are built into the onboarding flow. Every investor is verified before they can view fund materials or make a commitment.
Fund documents are only accessible after an investor completes qualification and executes an NDA. No browsing confidential materials without clearing compliance. You control what goes in the dataroom.
Accredited individuals, qualified purchasers, family offices, RIAs, and institutional investors are automatically routed to the correct feeder fund based on their qualification status.
We are onboarding 10–15 GPs as Founding Partners. These are the firms that will shape the platform — their feedback drives product decisions, their funds anchor the marketplace, and their success is our proof of concept. The program is intentionally small. We want deep partnerships, not a long tail.
0.25–0.50% advisory shares with 24-month milestone vesting. Your success is aligned with the platform's growth.
20% of all secondary market transaction fees on your fund. Every trade, every tier, for the lifetime of the fund on Locke.
Onboarding fees waived entirely. 50% discount on platform fees for Years 1 and 2.
Direct line to the product team. Feature requests from Founding Partners are prioritized. You're building this with us.
What we ask in return: Upload quarterly data via our standardized template. Be willing to provide candid product feedback. Be referenceable for future GP prospects once you’re satisfied with the platform. That’s the full list.
ECS/Fargate containers, RDS PostgreSQL, S3 object storage. The same AWS primitives used by Goldman Sachs, Capital One, and the SEC itself.
All data encrypted at rest (AES-256) and in transit (TLS 1.3). Database connections are encrypted. API traffic is HTTPS-only.
SOC 2 Type II audit is underway. We designed the platform with SOC 2 controls from day one — this is a documentation exercise, not a remediation effort.
GPs only see their own funds. LPs only see their own holdings. Admin actions are logged and auditable. No cross-tenant data leakage is architecturally possible.
No crypto wallet required. Investors authenticate with standard email and password. Two-factor authentication is available. The blockchain layer is entirely abstracted — your LPs interact with a modern web application, not a DeFi interface.