ALTERNATIVE FINANCING FORMS
FOR ENTREPRENEURS AND INVESTORS
Editorials

The commit­ment of a new inves­tor to subscribe a certain invest­ment amount is a major achie­ve­ment for the fund mana­ger. This also applies if the commit­ment is only made by e‑mail, text message or hand­shake — as a rule, the fund mana­ger should be able to rely on the added commit­ment. Legally, howe­ver, the process of accep­ting the inves­tor — known as onboar­ding — is only just begin­ning. The quali­fi­ca­tion of an inves­tor for the fund must be checked, due dili­gence obli­ga­ti­ons under money laun­de­ring law must be fulfil­led and infor­ma­tion must be coll­ec­ted from the inves­tor that may have regu­la­tory or tax impli­ca­ti­ons for the fund.

If the fund mana­ger can offer his inves­tors an easy, contem­po­rary onboar­ding process — compared to one that costs them a dispro­por­tio­nate amount of work — then onboar­ding has just as much of a compe­ti­tive and ther­e­fore fund­rai­sing factor as a convin­cing pitch deck or PPM. While endea­voring to make the admis­sion process as easy as possi­ble for the inves­tor, various legal regu­la­ti­ons must also be obser­ved. Adhe­ring to all legal requi­re­ments — i.e. “compli­ance” — is no longer a job that would just end up in a drawer. Super­vi­sory autho­ri­ties and audi­tors moni­tor compli­ance with the requi­re­ments very closely, for exam­ple with regard to compli­ance with inves­tor quali­fi­ca­ti­ons or money laun­de­ring obli­ga­ti­ons. Onboar­ding that faci­li­ta­tes the coll­ec­tion of complete and correct infor­ma­tion and avoids errors right from the input stage ther­e­fore not only helps the inves­tor, but at least as much the fund manager.

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