Deals vs Investments? Don't be confused....
If you confused, read this article to help get things clarified. First, lets define both.
- Deal - an opportunity that you are looking to raise capital.
- Investment - a deal that the fund has already invested its capital in.
Avestor provides fund managers with significant flexibility so depending on your situation so lets go through the options.
- Option 1 - Raising investor capital before investing in an opportunity
- Option 2 - Using Manager capital to pre-invest in an opportunity
- Option 3 - Using a combination of investor capital and manager capital to invest in an opportunity
Option 1 - Raising investor capital before investing in an opportunity
If your plan is to raise capital from investors first, the steps are as follows:
- Create a Deal
- Upload deal documents
- Gather soft commits
- Invest as a fund
- Convert Deal to Investment
- Allocate slices to investors
Option 2 - Using Manager capital to pre-invest in an opportunity
If your plan is to plan to pre-invest in the deal and then allocate investors into the deal, the steps are as follows:
- Invest in the deal using fund capital
- Create an Investment
- Upload deal documents
- Gather investment requests
- Allocate slices to investors as their capital comes into the fund
Option 3 - Using a combination of investor capital and manager capital to invest in an opportunity
If your plan is to invest with a combination of Manager capital and investor capital, the steps are as follows:
- Follow Steps 1 to 3 of Option 1
- After gathering soft commits, decide how much additional Manager capital will be invested
- Invest as a fund using both the investor capital and Manager Capital
- Convert Deal to Investment
- Allocate slices to investors that provided the capital. The remaining slices will be in the Manager account.
- The Manager slices can then be allocated at a later date as additional capital comes in
