The Tax Cuts and Jobs Act of 2017 created a powerful incentive for private investment in economically underperforming areas through tax benefits for investments made through qualified opportunity funds (QOFs) that own property used in qualified opportunity zones (QOZs). To encourage those investments, the U.S. Department of the Treasury issued proposed regulations regarding QOFs and QOZs on October 19, 2018, and April 17, 2019 (together, the Proposed Regulations). The Proposed Regulations provide greater clarity to sponsors that seek to raise capital for QOFs, although many uncertain areas remain and a variety of traps exist for those who are not properly advised. In a guest article, Gibson, Dunn & Crutcher partners Brian W. Kniesly and Daniel A. Zygielbaum, as well as associate Evan M. Gusler, highlight how raising a QOF presents challenges and opportunities that are absent from the context of a typical PE fund. In particular, this article explores issues related to investing and disposing of interests in QOFs, as well as certain important considerations around structuring capital commitments and the sponsor’s carried interest. For related articles on QOFs, see “Select Issues for Structuring Qualified Opportunity Funds” (Jun. 4, 2019); and “How Fund Managers May Deploy Opportunity Zone Funds to Defer and Partially Eliminate Capital Gains” (Apr. 30, 2019).