b'borrowers. For instance, some mortgage funds that offer 1-3-year bridge loans may offer renewable promissory notes to their investors with durations that coincide with the loans the fund is making to its borrowers. In that case, if one investor/lender decides not to renew, they can be paid back from the next outstanding fund loan that redeems; and new investors/lenders could bebroughtinatanytimethatwouldreplacethepreviouslender.This doesnt work as well for a fund that buys and holds real estate for 3-7 years, as the investor who wants to redeem its interests would have to: a) wait until an asset sells, or b) find a suitable transferee for its investment, or c) sell the interests to the fund manager or other investors, perhaps at a discount from what they originally paid.Some states wont allow evergreen funds; and it becomes a harder sell for investors. Investors like to invest in a business model that has a finite goal, with an anticipated termination, typically 5-7 years. This helps them gauge when they will get their original investment back, and most investors do have future plans for their investment dollars.Redemption Options Ifyoudoanevergreenfund,youwillhavetooffersometypeof redemption for investors, such as a renewable promissory note, that can be canceled for those who decide they want out.It can be dangerous to offer a redemption option as:Offering redeemable securities could cause your fund to have to register as an Investment Company, subject to registration under the Investment Company Act of 1940;115'