Regulatory
This Disclosures page is provided for informational and regulatory purposes. It does not constitute an offering document, investment advice, or a solicitation to purchase any security. All investments involve risk. Please read all fund documents carefully before making any investment decision.
KapStone Digital Associates LLC ("KapStone," "the Firm," "we," or "us") provides investment management services to private investment funds. The information on this page is intended to meet applicable disclosure obligations and to provide prospective and current investors with material information about the Firm and its operations.
The complete terms and conditions governing any investment in a KapStone-managed fund are set forth in the applicable Confidential Private Placement Memorandum, Limited Partnership Agreement, and Subscription Agreement. In the event of any conflict between information on this website and those governing documents, the governing documents control.
KapStone Digital Associates LLC is [registered with / relies on an exemption from registration with — placeholder] the U.S. Securities and Exchange Commission (SEC) as an investment adviser under the Investment Advisers Act of 1940, as amended. [CRD Number: [XXXXXX] — placeholder.]
Registration as an investment adviser does not imply any particular level of skill or training. The SEC does not endorse any investment adviser or verify the accuracy of any information provided by an investment adviser.
KapStone's fund vehicle(s) are not registered as investment companies under the Investment Company Act of 1940, as amended, in reliance upon the exemption provided by [Section 3(c)(1) / Section 3(c)(7) — placeholder] thereof. Accordingly, the fund does not provide investors with certain protections available under that Act.
Interests in the fund are offered and sold without registration under the Securities Act of 1933, as amended, pursuant to [Rule 506(b) / Rule 506(c) of Regulation D — placeholder]. Such interests are restricted securities and may not be resold or transferred except in accordance with applicable law.
KapStone may be required to make notice filings in certain states in connection with its offering activities. [State notice filing details — placeholder.]
As [a registered investment adviser / an exempt reporting adviser — placeholder], KapStone [files / may be required to file — placeholder] Form ADV with the SEC. Part 2A of Form ADV (the "Brochure") contains information about the Firm's services, fees, conflicts of interest, and disciplinary history.
| Document | Description | Access |
|---|---|---|
| Form ADV Part 1 | Organizational and business information filed with the SEC | SEC EDGAR |
| Form ADV Part 2A (Brochure) | Narrative disclosure of investment strategies, fees, conflicts, and disciplinary information | Available upon request |
| Form ADV Part 2B (Brochure Supplement) | Background information on supervised persons who provide investment advice | Available upon request |
| Form D | Notice of exempt offering filed in connection with fund capital raises | SEC EDGAR |
| Form PF | Confidential filing reporting information about private fund assets and strategies (if applicable) | Filed with SEC — confidential |
To request a copy of any available document listed above, contact us at [compliance email — placeholder].
An investment in a KapStone-managed fund involves significant risk and is suitable only for investors who can afford to sustain a total loss of their investment. The following is a summary of material risk factors — not an exhaustive list. A complete description of risk factors is set forth in the fund's Confidential Private Placement Memorandum.
The value of fund investments may decline due to market conditions, economic downturns, geopolitical events, changes in interest rates, or factors specific to individual portfolio companies. Investments may lose value and may not recover.
The fund may hold a relatively concentrated portfolio. Adverse performance of a small number of positions could have a disproportionate negative impact on overall fund returns.
Interests in the fund are illiquid. There is no public market for fund interests, and investors may be unable to transfer or redeem their interests except as permitted by the fund's governing documents. The fund's lock-up provisions restrict investor liquidity for a defined period. Certain portfolio investments may themselves be illiquid, which could impair the fund's ability to meet investor redemption requests.
The fund's performance depends heavily on the judgment and expertise of KapStone's investment team. The departure of key personnel could adversely affect the fund. There can be no guarantee that the Firm's investment process will achieve its objectives.
The fund [does / does not — placeholder] use leverage. [If applicable: The use of leverage magnifies both gains and losses and increases the risk of a substantial loss of invested capital. Lenders may demand repayment at times that are inopportune for the fund.]
Changes in applicable laws, regulations, or tax rules — including those governing investment advisers, private funds, securities offerings, or digital assets — could materially affect the fund's operations, strategy, or investors' expected after-tax returns.
Certain fund assets, particularly illiquid or private positions, may be valued using methodologies that involve significant judgment. Such valuations may not reflect the price achievable upon actual sale.
To the extent the fund invests in digital assets, including cryptocurrencies and tokenized instruments, investors are subject to risks that are distinct from and in addition to those associated with traditional securities.
Digital asset markets are highly volatile. Prices can move dramatically in short periods of time and have historically experienced extreme drawdowns. Past price appreciation is not indicative of future results.
The regulatory framework governing digital assets remains unsettled in the United States and globally. Future regulatory actions by the SEC, CFTC, Treasury, or other authorities could restrict trading, require registration, or adversely affect the value of digital asset holdings. Certain digital assets may be characterized as securities, which would subject them to additional regulatory requirements.
Digital assets are subject to risks of loss through hacking, theft, private key loss, exchange failures, smart contract vulnerabilities, and operational error. Unlike bank deposits, digital asset holdings are not FDIC insured and are not protected by the Securities Investor Protection Corporation (SIPC).
The value of digital assets may be affected by the underlying protocol's security, adoption, governance decisions, hard forks, or the emergence of competing technologies. Open-source software protocols may contain undiscovered vulnerabilities.
Digital asset markets may be thin, subject to manipulation, or subject to trading halts. The fund may be unable to exit positions at desired prices or at all under certain market conditions.
Past performance is not indicative of future results. Any reference to historical performance — whether of the fund, individual investments, or benchmark indices — should not be construed as a guarantee or projection of future performance.
Performance figures, where presented, are presented [net of / gross of — placeholder] management fees and [net of / gross of — placeholder] performance allocations, unless otherwise stated. Individual investor returns will vary based on the timing of their investment, applicable fee terms, and other factors.
Benchmark comparisons, if included in any materials, are for illustrative purposes only. Benchmarks are unmanaged, do not reflect fees or transaction costs, and may not be directly comparable to the fund's strategy or holdings.
No representation is made that any investor will or is likely to achieve results comparable to those described or referenced in any KapStone materials.
KapStone's advisory business may give rise to actual or potential conflicts of interest. A full description of material conflicts is provided in the fund's Confidential Private Placement Memorandum and, where applicable, in Form ADV Part 2A. Material conflicts may include, without limitation:
KapStone has adopted policies and procedures designed to identify and manage these conflicts. Investors should review the full conflicts disclosure in the fund's offering documents and direct questions to [compliance email — placeholder].
KapStone Digital Associates LLC maintains an Anti-Money Laundering (AML) and Know-Your-Customer (KYC) program consistent with applicable requirements under the Bank Secrecy Act, FinCEN regulations, and other applicable law. As a condition of investment, all prospective investors are required to:
KapStone reserves the right to refuse admission or to redeem an investor if required by applicable law or if the Firm determines in good faith that admission or continued investment would expose the Firm or the fund to legal, regulatory, or reputational risk.
KapStone's AML compliance officer is [Name — Placeholder], reachable at [email — placeholder].
Prospective investors that are subject to the Employee Retirement Income Security Act of 1974 (ERISA) or Section 4975 of the Internal Revenue Code (collectively, "Plan Investors") should carefully review the fund's governing documents with their legal counsel before investing. Depending on the percentage of "plan assets" held in the fund, the fund's assets may be treated as "plan assets" of such investors, which would subject KapStone to ERISA's fiduciary standards and prohibited transaction rules.
The fund [does / does not — placeholder] intend to qualify for an exception from plan asset treatment under the "significant participation" exception or another applicable exemption. [ERISA-specific disclosures — placeholder. Consult legal counsel.]
This section is provided for informational purposes only and does not constitute legal or tax advice. Plan Investors should consult with qualified ERISA counsel before making any investment.
The following is a brief summary of certain U.S. federal income tax considerations. It does not constitute tax advice and is not a substitute for advice from a qualified tax professional. Tax laws are complex and subject to change; individual circumstances vary significantly.
KapStone does not provide tax advice. Prospective investors are strongly encouraged to consult with qualified tax advisors prior to investing and annually thereafter.
Any investor or prospective investor who has a complaint or concern regarding KapStone's business practices, compliance with applicable regulations, or investor treatment may submit a complaint in writing to:
KapStone Digital Associates LLC
Attention: Chief Compliance Officer
[Address — Placeholder]
Email: [compliance email — placeholder]
Complaints will be acknowledged within [X business days — placeholder] and investigated in accordance with KapStone's compliance procedures. Investors who are not satisfied with KapStone's response may escalate their complaint to the U.S. Securities and Exchange Commission at www.sec.gov/tcr or the applicable state securities regulator.