Client pays Assure when a transaction or SPV closes and funds are wired to the company, sponsor or project. Assure will send an invoice to clients (not a third party), and clients are required to pay Assure’s fee, but there is not a requirement as to where the funds originate.
Clients typically pay Assure with funds that originate from one the following sources.
- The most common method clients use to pay Assure is directly from investor subscriptions. This method has a portion of each investor’s invested amount set aside to pay Assure. Using this method will decrease the total amount that is sent to the portfolio company.
- Through an expense reserve or subscription fee, which is a fixed amount paid by each investor in addition to an investor’s subscription amount. Similar to the method above, the investors are contributing funds to pay for the Assure service, but an expense reserve is on top of a subscription amount is not reflected on an investor’s capital account.
- The client can simply pay the invoiced amount from their own funds. We commonly refer to this method as clients paying from the balance sheet.
- Charging the target company or project for the fees needed to engage Assure. Clients obtain an agreement from the company or others that will receive the raised funds to use a portion of the funds sent to them to pay for Assure’s fees. Typically, this method, similar to method 1 above, gives investors credit for all of their contributed funds, and carry is not earned until after all of the contributed capital is returned. Because Assure will not invoice third parties, clients work with the paying party to pay in advance or give permission to hold back Assure’s fee before funds are wired.