I am interested in starting an investment club and wanted to see if any of you have some ideas of how they work, horror stories, legal structure, etc. What type of deals do you do? What things worked? What didn't work?
I don't want it to be big, maybe about 4-6 people.
Thanks in advance!
I've actually been thinking about doing the same thing myself as a way of pulling together a small group of people with a variety of talents, skills, and resources, using each other to bounce ideas off of and keep each other accountable and moving forward, as well as to split the risk and initial capital investment.
I can tell you that when it comes to legal structures, there are a number of options. For example you can structure things so that everyone has an equal say, so that each person has a vote that is proportionate to their contributions, or that some people can be active while others are more passively involved.
I would think too that you'd want to be thorough with your operating agreement or bylaws so that if and when problems arise you have a structure in place for various situations that everyone has already agreed to such as can the other members buy out a troublesome member or can a person decide to quit three months in and get their initial investment back....?
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