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Traditionally, the process of starting a hedge fund has been characterized by extremely high barriers to entry.
Average costs to get a fund off the ground range from $100-150k. These fixed costs put starting a hedge fund out of reach for anyone who doesn't have a sizable amount of capital.
These costs are not a fact of nature, but the result of antiquated fund services that are anachronistic to the realm of digital assets. Web3 native fund operations can remove the trust assumptions and transaction costs that make administering a fund so costly.
- Instead of using a bank account, funds are custodied in a digital wallet.
- Instead of using spreadsheets to calculate NAVs, APIs automate calculations.
- Instead of employing an administrator to manually adjust cap tables and calculate management and performance fees, fund ownership interests are denominated in non-transferable tokens whose value adjusts according to new NAV updates.
- Instead of using bank wires for closing or capital calls, investment requests and redemptions can be processed on chain in seconds.
SmartFunds is an operating system that automates the back office for Web3 native funds. Our mission is to democratize fund formation and unleash a new generation of digital asset managers.