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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:

  1. Create a Deal allowing investors to provide soft commits
  2. Upload deal documents, images & other information
  3. Gather soft commits from your investors.
  4. Collected signed investor disclosures from your investors.
  5. Collect their capital.
  6. Invest the capital as the fund entity
  7. Convert Deal to Investment for the amount the fund invested
  8. 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:

  1. Ensure sufficient cash balance exists in the manager account to the full investment amount
  2. Invest in the project using the fund capital.​
  3. Create an investment for the amount that was invested in the project.
  4. Upload deal documents, images & other information
  5. Collected signed investor disclosures from your investors.
  6. 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:

  1. Follow Steps 1 to 5 of Option 1
  2. Ensure sufficient cash balance exists in the manager account for its additional share
  3. Invest as a fund using both the investor capital and Manager Capital
  4. Convert Deal to Investment
  5. Allocate slices of the investments to investors based on their allocation amount. The remaining units will belong to the manager.
  6. The Manager slices can then be allocated at a later date as additional capital comes in

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