The LLCs are created to allow SWAN angels to invest with a funding amount (for example, $5,000) that is smaller than amount normally required of each investor in a start-up company (typically, a $25,000 minimum).  The LLC collects investments from the  SWAN angels and the LLC then makes a single investment on behalf of all the LLC members (the angels), thereby crossing the minimum investment thresh hold.

The LLCs are sometimes referred to as Special Purpose Vehicles (SPVs).

And although we refer to the LLCs as “SWAN” LLCs, each LLC is an independent, for-profit, Limited Liability Company (LLC)  that have no legal connection with the non-profit SWAN Impact Network.

Each LLC identifies and pays an Administrative service-provider to handle the details of operating the LLC. The  administrator for LLCs created in 2019 through  2024 is the SWAN LLC Manager Inc.  The administrator for LLCs created starting in 2025 is the Loon Creek Capital Group.

The Administrator’s responsibilities including filing Federal and state tax returns for the LLC. The following circumstance triggers the Administrator to file a Federal K-1 tax return for an LLC member.

  • Each LLC  makes an annual IRS tax filing ONLY if the LLC has had income or expenses in the tax year. The LLC files form 1065 for the LLC corporation and generates a K-1 form for each LLC member.
  • Note that the administrators do not charge each LLC an annual operating fee so existing LLCs typically incur no expenses in most years, and therefore no K-1s are filed.
  • If the investment made an LLC has a change in value, and that change is not a realized gain or loss for the LLC, then  1065/K-1s are not triggered. By analogy, if you personally own stock in a public company and the the stock price goes up or down, you make no report to the IRS until you sell the stock and you realize a gain or loss.

In these K-1 tax filings, the LLC’s income or expenses are passed down on a pro-rata basis to all the LLC members. The LLC members then include their pro-rata share of the income or expenses on their personal tax filings.

For investments made via a self-directed IRA, the K-1 is issued to the IRA service provider, who becomes a member of the LLC.

Please see LLCs filing k-1 status for each LCC. The link shows, for each LLC, whether the LLC has filed 1065/K-1s during each of the last three years.