By David Fisher Crowdfund Beat guest contributor and Phoenix American Financial Services,
Crowdfunding is a revolution in how new investment funds can raise money quickly from a more diverse population of investors than ever before. But once the money has been raised, all the operational headaches of a traditional fund remain a serious challenge to the sponsor. Tracking the investors, calculating and paying distributions, processing transfers, producing K-1s and 1099s, fielding investor calls and interacting with custodians are essential activities of any sponsor but major distractions from the core business of raising and deploying investor capital.
Also, the array of compliance processes that apply, such as anti-money laundering checks, OFAC searches, Know Your Customer requirements and, for 506(c) funds, the verification of accredited investor status are critical tasks but a serious operational problem requiring an expensive in house staff.
For participants in the crowdfunding space, it is important to recognize the value of focusing on the challenges of sourcing deals and attracting investors while, like the most successful traditional funds, outsourcing operations, compliance and taxes to an experienced and reputable back office provider. The savings relative to employing an in house staff are significant, while the benefit of having experienced professionals handling critical operational functions is invaluable.
Phoenix American Financial Services is an accomplished provider of back office outsourcing for alternative investment funds and is on the cutting edge of services for new crowdfunding platform operators. Phoenix American’s advanced systems, four decades of experience and focus on customer service make them an ideal back office partner for crowdfunding platform operators. David Fisher
Phoenix American Financial Services
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