Have questions about the Customizable Fund structure, Avestor's platform, or the Avestor Mastermind? Start here to learn more.
A customizable fund takes the best aspects of a pooled fund and makes them even better. Pooled funds allow raising capital on a continuous basis, but capital raisers have very limited flexibility to make adjustments to their initial plans. With a customizable fund, capital raisers can adjust their asset classes, deal structure, compensation and many more things on a deal by deal basis. This gives capital raisers significant flexibility to adapt their fund as their business needs change or adjust to new market conditions.
Avestor is much more than just software. We provide leading-edge technology for capital raisers to manage their investors and investments, along with end-to-end services including legal, banking, tax and many other partners. Finally, we enable capital raisers to learn, grow, and build their networks through an engaged mastermind community.
Pooled funds allow raising capital on a continuous basis, but capital raisers have very limited flexibility to make adjustments to their initial plans. With a customizable fund, capital raisers can adjust their asset classes, deal structure, compensation and many more things on a deal by deal basis. This gives capital raisers significant flexibility to adapt their fund as their business needs change or adjust to new market conditions.
Fund managers can design their customizable funds to pool capital to invest into other sponsor deals, or to raise capital for their own offerings. That’s why we call it customizable. It can be designed to meet your business needs.
Yes, a customizable fund is a far more cost effective and efficient way to do syndication deals. The fund would own the entire deal, and investors can come through the fund and decide if they want to invest in a specific deal.
The cost savings for a customizable fund come from 3 main categories: (1) You will have to create only one PPM for the fund instead of having to create a separate PPM for each syndication. (2) You only have to file a single blue sky filing for each state at the fund level, instead of doing a blue sky filing for each syndication. (3) You won’t need to create a new LLC for each deal, which leads to major savings on accounting and taxes.
Absolutely. Avestor customizable funds have been used for a wide range of asset classes including real estate (multifamily, single family, hotels, senior living, student housing, mobile home parks), startups, judgment liens, oil and gas, and more.
Similar to many traditional pooled funds, customizable funds are set up as Regulation D 506(c) or 506(b) funds with either 3(c)1 or 3(c)5 exemptions.
The fund manager clearly articulates their compensation for each deal through a deal disclosure. This can be a combination of various fees, including due diligence fees, promotions, and more.
Customizable funds are private fund offerings where the manager is identifying investments they want the fund to invest in based on their underwriting criteria. Fund managers are not compensated by the underlying sponsor to raise capital for their deal but may be compensated as a Co-GP if they are also actively participating in managing the underlying investment.
The fund manager may need to register initially as an Exempt Reporting Adviser (ERA). This depends upon a variety of factors, including the type of investments the fund is investing in and the state that the manager is operating in. Your attorney will assist you in determining if you need to register.
The fund PPM will cover the generic risks of the fund investment asset classes. For each individual deal we have developed a deal disclosure document that outlines the terms of the deal and any risks specific to that deal.
Avestor's model replaces syndications and SPVs (special purpose vehicles). A simple analogy. A developer can go buy each piece of land and then build a house on it. That is what you do with syndications & SPVs. Instead a developer buys a large parcel of lands and then builds hundreds of homes on it. That is a customizable fund. Once you setup a customizable fund, you can raise capital for new deals with ease.
Avestor is the only company that provides an end to end business solution. We cover both the business and technical aspects of launching & operating your fund. With other platforms, when you have a question outside of the features & capablities of their platform, you are on your own.
Yes, an attorney familiar with SEC regulations is required to set up your fund. Avestor will partner with your attorney to set up the customizable fund documents or you can use one of Avestor's partner attorneys. The attorney will assist you in ensuring that the customizable fund legal documents and the Form D filings meet your business requirements.
If you can think it, we can likely support it. Our funds allow you to replace traditional syndications and SPVs. You can use the fund to originate loans. You can use the fund to invest in notes & debt instruments. You can invest in other funds as well. Just ask us.
It's all about flexibility. Avestor's funds are the only ones that enable capital raisers to raise for an unlimited number of investments and set different business terms for each investment.
Absolutely, Avestor includes fund accounting but you are welcome to use your own external or internal accounting team if you prefer.
Absolutely, Avestor will partner with your preferred tax firm or you can use one of Avestor's partner tax firms.
It's all about protecting your downside. What other platforms don't tell you is what happens when you have to deal with litigation. Which attorney will represent you and your templated documents that were generated by some automated computer script? When raising capital from others, Avestor believes it's critical to have proper legal documents and an attorney by your side for downside protection.
Avestor believes technology cannot replace the human touch. Setting up a fund is complex and you will have lots of questions. Our setup process includes a complete hands-on approach with unlimited time with real people until you are comfortable with your fund. No other platform gives you this level of attention.
Avestor charges a small monthly membership fee to be on our network. Most other platforms don't tell you who else is using their platform. We have done the opposite. Learning from others is the best way to scale your fund. Being part of the Avestor network gives you access to other fund managers and their investment opportunities so you can learn and partner with each other.
As they say, you get what you pay for. We are a full-service provider that will help you with all aspects of launching and scaling your fund. If all you need is some software to manage your investors and investments, there are plenty of less expensive options and we likely are not the right provider for you.