Category / Section
Deals vs Investments? Don't be confused....
If you're confused, read this article to help get things clarified.
First, let's define both:
1. Deal - a project that you are looking to raise capital for.
2. Investment - a project that the fund has invested its capital into.
Avestor provides fund managers with significant flexibility depending on your situation so let's go through the options.
- Option 1 - Raising investor capital before investing in a project​
- Option 2 - Using Manager capital to pre-invest in a project.
- Option 3 - Using a combination of investor capital and manager capital to invest in an opportunity.
Option 1
If your plan is to raise capital from investors first, the steps are as follows:
- Create a Deal allowing investors to provide soft commits
- Upload deal documents, images & other information
- Gather soft commits from your investors.
- Collected signed investor disclosures from your investors.
- Collect their capital.
- Invest the capital as the fund entity
- Convert Deal to Investment for the amount the fund invested
- Allocate slices of the investments to investors based on their allocation amount
Option 2
If your plan to use manager capital to invest in a project and then backfill with investor capital later, the steps are as follows:
- Ensure sufficient cash balance exists in the manager account to the full investment amount
- Invest in the project using the fund capital.​
- Create an investment for the amount that was invested in the project.
- Upload deal documents, images & other information
- Collected signed investor disclosures from your investors.
- Allocate slices to investors as their capital comes into the fund
Option 3
If your plan is to invest with a combination of Manager capital and investor capital, the steps are as follows:
- Follow Steps 1 to 5 of Option 1
- Ensure sufficient cash balance exists in the manager account for its additional share
- Invest as a fund using both the investor capital and Manager Capital
- Convert Deal to Investment
- Allocate slices of the investments to investors based on their allocation amount. The remaining units will belong to the manager.
- The Manager slices can then be allocated at a later date as additional capital comes in