The Spreadsheet That Can Save You from an AML Nightmare
A practical guide for VC operators juggling global investors and compliance headaches
If you’re wondering where I’ve been—it’s been a busy few weeks with some major life shifts. But I’m back to writing, and this week, we’re diving into something deeply unsexy but dangerously important: Anti-Money Laundering (AML) compliance and fund operations.
Now, before you yawn, here’s why this matters: As a VC, you likely have investors from multiple countries. Each of them brings their own tax jurisdictions, disclosure expectations, and regulatory scrutiny. And while we often think about term sheets, cap tables, and follow-ons, few of us want to admit how crucial it is to stay on top of cross-border compliance.
Let’s break it down.
Why AML Regulations Are a Headache
Regulators expect fund operators to know where their LPs’ money comes from, how it’s structured, and in some cases, how risky that capital is in relation to international AML laws.
Here’s what that looks like in practice:
You might need to rank investors by risk profile—based on their residency, the nature of their income, and the structure through which they’re investing.
In countries like New Zealand, the FMA (Financial Markets Authority) expects operators to classify investors by AML risk, and maintain the rationale in case of an audit.
Countries like the U.S. might require you to provide SEC-formatted statements even if your fund is domiciled elsewhere.
Bottom line: even if you think you're safe because your fund is local, your investor base makes you international by default.
How to Keep Sanity While Staying Compliant
Let me get to the part that saves your time and stress—something we use internally and I highly recommend:
A “base file” that maps investor risk based on origin, fund structure, and AML indicators.
Here’s how it works:
You maintain a spreadsheet that lists all countries where your LPs reside.
For each country, you pre-define:
The default AML risk score
Tax reporting obligations
Any bilateral treaties your fund’s home country has with theirs
Then, as new investors come in, you just plug their info—country, source of funds, entity type—and the file gives you a risk score + action checklist.
This becomes your defense when regulators ask, “How did you assess this investor’s risk?” You don’t just say you did it—you show them the framework.
You’d be surprised how many regulators appreciate clarity over perfection.
Filings & Documentation: The Annual Ritual
If you’re operating in places like NZ, Singapore, or the EU, AML is just the beginning.
You also need to track and disclose:
Number and volume of transactions during the year
Investor onboarding/offboarding
Currency flows
The trick is not to build this from scratch every year. Instead:
Your first-year file becomes the base.
Add documentation and formula notes so you can replicate it cleanly each year.
Always link your interpretations to FAQs or official commentary.
Regulators won’t just want your numbers—they’ll want to know how you got them.
One Last Red Flag
If you're dealing with revenue that’s recorded gross but cash received is net of marketing/promotional deductions, flag that for yourself.
From a valuation perspective, unless there’s full invoicing, it’s the net cash that will be considered real revenue. This becomes relevant in both investor due diligence and internal audits. Get your numbers straight, and get them aligned across statements, cap tables, and valuations.
In Closing
AML, KYC, FMA, CRS—it’s a soup of acronyms no one really wants to eat. But if you’re running a fund, you owe it to yourself (and your LPs) to make this part of your operating rhythm.
If you want to see the kind of base file I use or chat through how to set up one that fits your structure, just reach out on LinkedIn. I’d be happy to walk you through it.
Until next time,
Saksham