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These platforms can be provided by financial institutions, such as banks and brokerages.

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These platforms can be provided by financial institutions, such as banks and brokerages, or by technology companies and fintech firms.

Book a Strategy Call
Book a Strategy Call

Customizable Funds and Compliance: How Avestor Does It

Avestor is the first and only company in the world to offer a fully customizable fund. So naturally, people tend to have questions about how we’ve made this structure possible. 

We’ve worked hard to make sure our offering is SEC compliant and that everything we do is legal. But we understand that you’ll need to do your due diligence before launching a customizable fund. 

Here are answers to some of the top questions sponsors ask us about Avestor’s customizable funds:

What SEC regulatory framework does Avestor use?

Any offering of securities must be registered with the SEC unless it meets an exemption. Avestor customizable funds are created under Regulation D exemptions — namely, 506(b) and 506(c). 

Has Avestor’s customizable fund structure been vetted by attorneys? 

Avestor partners with multiple legal firms specializing in securities law, who have developed robust legal documents for our customizable fund structure. We’ve also had many other legal firms and experts review our documents to ensure we’re fully compliant with all regulations.

How can a fund support multiple asset classes with a single set of legal documents? I had been told that was not possible.

With the Avestor customizable fund, each fund has a  single PPM, operating agreement, and subscription agreement. We then provide deal-specific disclosure documents that supplement the PPM to ensure that investors have all the necessary information.

This structure — combined with our one-of-a-kind technology platform — has made it possible and legal for investors to select which investments they participate in within a single fund. It also provides fund managers with more flexibility than traditional fund structures. 

How are investors able to select individual deals inside a fund?

This is one of the key differentiators between a customizable fund and a traditional blind pool fund. Our proprietary technology and unique legal setup allows your investors to choose the specific deals they want to invest in, giving them greater flexibility than ever before. 

Do customizable fund managers need to file with the SEC?

Yes, all fund managers need to file with the SEC. Even for exempt offerings, you must file notification with federal and state authorities.

With Avestor, this is easier than ever to do. We work with a team of partner attorneys to help you complete all the necessary filings, faster and at a lower cost. 

Do I need to be a Registered Investment Advisor to run a fund?

This depends on the rules of your state. In some states, you may need to become an Exempt Reporting Adviser. When you sign up for Avestor, our attorneys work with you to determine the best course of action and the steps you need to take to ensure your fund is compliant.

For most small, private funds, it is unlikely you will need to become a RIA. 

Does Avestor help me through the process of creating a fund?

When you work with Avestor, you can have peace of mind knowing that we’ll guide you along every step of the process of launching and managing a fund. We work with you to understand your goals and needs and structure your fund accordingly. Plus, we partner with top attorneys so you can access the legal services you need at a lower cost. 

Still have questions? Let’s keep the conversation going. Head to this page on our website to schedule a call with our team. 

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