Reg A+ funds are starting to gain traction, and yet, since they encompass crowdfunding, there’s unknown complexities in setting up fund structures, etc. to meet compliance guidelines. Enter fund administrator Gemini Companies and FundAmerica, a portal that offers “SEC-compliant tools for technology-driven finance & crowd-direct offerings” according to their website, and you have a match made in heaven. Now wealth managers and funds looking to start new funds for this genre of investing can do so with seamless technology and an establish fund administrator. Win-win.
The Gemini Companies (“Gemini”) have established a strategic partnership with FundAmerica, LLC (“FundAmerica”) to provide effective fund administration and management services for funds which are exempt from registration under SEC Regulation A.
“This is a great opportunity for Gemini and FundAmerica,” said David Young, President of Gemini Hedge Fund Services, LLC. “We have an opportunity to combine our in-depth expertise in our respective fields to help businesses access the capital markets through unregistered funds in a cost-effective and operationally efficient way.”
As mandated by Title IV of the Jumpstart Our Business Startups (JOBS) Act, smaller companies are allowed to offer and sell up to $50 million of securities during a 12-month period. The rules governing these securities are split between Tier 1 offerings that seek to raise up to $20 million in 12 months, and Tier 2 offerings attempting to raise up to $50 million during the same amount of time. Issuers can raise the Tier 1 and Tier 2 levels of capital through crowdsourcing platforms. The funds established by issuers on these platforms can have unlimited investors, and receive their capital commitments online. They can also offer a variety of non-traditional investment strategies, including real estate and impact investing.
Gemini and FundAmerica have come together to help businesses meet the complex fund administration and technology needs of unregistered funds. As part of their strategic relationship, FundAmerica provides online technology portals that handle transfer agency services, escrow and payment processing for investors, and Gemini takes care of fund accounting, net asset value calculations and reporting.
“In Gemini, we have found the ideal fund administration partner to complement our crowdfunding technology and compliance solutions,” said Scott Purcell, Founder and CEO of FundAmerica. “As funds that are not beholden to Regulation A become an increasingly common way for small companies to raise capital without launching IPOs, we will continue to work closely with Gemini to ensure that issuers can meet their goals while remaining in compliance with all regulations.”