10. It’s really expensive to start a fund
In the old days, it was true that funds could cost upwards of $50,000 to start. At Avestor, we have placed intense focus on bringing down the costs of starting a fund. In fact, our funds cost close to what a single syndication deal would cost.
9. Funds must have a definitive start and end date
A traditional closed end fund does need clear dates. However, Avestor’s customizable funds have removed that necessity. Our evergreen funds can last as long as you need them to last.
8. Funds don’t work if you only do a few deals a year
With typical funds it is true that a sponsor needs a good flow of deals to get investor capital deployed. Avestor’s customizable funds are different. Sponsors with even 2-3 deals per year will find customizable funds an attractive option.
7. You need a large investor base to start a fund
With typical funds, sponsors need to raise $25 million or $50 million in a short period of time. That requires a large investor base. With Avestor’s customizable funds, even new sponsors with a small investor base can get started and grow their investor base and fund size over time.
6. You need to deploy capital quickly if you start a fund
Most funds either collect all investor capital up front or they do capital calls. Capital needs to be deployed quickly if all capital is collected up front. Avestor’s customizable funds work differently. There’s no need to collect capital up front and no need to do capital calls.
5. Funds must focus on a single asset class
There’s a common misconception that investors will only invest in areas where a sponsor has previous expertise. This is because investors have no flexibility to select deals. With Avestor’s customizable funds, sponsors have the ability to invest in different asset classes and investors get the to choose whether or not they want to participate on a deal-by-deal basis.
4. You cannot change the business model of a fund
Traditional legal documents are written in a way that the business model for a fund is very difficult to change later. Avestor’s customizable funds’ legal documents provide sponsors enormous flexibility to change their business model down the road if needed.
3. You need a strong track record to start a fund
This again is the old way of thinking. Avestor enables new sponsors to use a customizable fund to build their track record.
2. Funds are really hard to manage and require a large team
While this may be true if you’re starting a fund the old way, Avestor’s customizable fund makes it easier than ever to manage a fund. We designed our platform from the ground up to simplify the process for investors and sponsors and allow you to scale with little overhead.
1. Investors prefer direct syndications over funds
Investors want transparency and choice. With syndications, investors get both. With traditional funds, they get neither. Avestor’s customizable funds provide investors with transparency, choice, and so much more.
Don't settle for the old way of raising capital! To learn more about how a customizable fund can give you the best of both worlds — with the benefits of a traditional fund and of a syndication — schedule a demo today.
