Fee structure relates to the amount of money paid by investors and those listing to a given investment platform. In the context of alternative investments, some platforms offer no fees, some offer a fixed amount for all investors, and some offer a rate that varies alongside investment amounts. The fee structure has potential ramifications on the platform’s own ability to generate money and, more importantly, investors' willingness to invest on a platform. Because private equity investments private are relatively high risk, some potential investors may be averse to paying high fees to a platform as well. However, especially in the case of investment platforms that prove a solid history of returns and high upside potential, other investors may see the fee differences as negligible in the face of returns that have either historically or future potential to outperform other alternative investing options.
It is also important to note that fees tend to have two sides. Many sites and reviews will list the direct fees to an investor, but many asset classes also come with fees charged to someone listing an opportunity or asset on a platform. In real estate, for example, the fee charged to a sponsor often matters just as much as the investor fee. Certain platforms will charge high fees to those listing and low fees to investors, but investors are really paying more if the listing fee is baked into the advertised "purchase price" of an investment on the platform.
All publicly available data on fee structures, for both investors and those listing, can be found using our "Compare" databases for both investors and entrepreneurs.
On many of these websites, fee structure can be verified through the FAQ listed on the platform website. If the fee structure is not listed there or on a “for investors” tab listed on the main webpage, it can likely be found through a simple search of “[platform company] fee structure” on Google or by using the data on investment platforms provided in our "Compare Platforms" feature.
