Forming An Investment Group
I am in the process of forming a new investment corporation. I have the first version of my business plan written. As of right now the buy in will be $2,000 per share and will be limited to 30 members. I am trying to make this group unique in that every member will get equal voting rights and equal share distribution. My question is does this investment group sound good? Is the buy-in set too small? I would like some feedback. I currently have about 10 interested people. E-mail me for a business plan if you want to read it. Thanks
So tell me more about what you think you are going to do with the $60,000? Its not enough to do a lot of deals with without some debt leverage. If you're going to add debt somebody's got to sign on the mortgage. Is everybody going to do so? If not how wiil those taking the greater risk be compensated?
Your democratic system seems totally unworkable to me-- you're actually going to try to build a consensus regarding, for example, what color tile to put in the kitchen?
How do you intend to find the other investors? Although 30 investors keeps you under the 35 person limit for a private placement I'd worry that if you loose the money someone is going to claim you were publicly soliciting, one of those no-no's under the Securities Exchange Act. Have you prepared an offering memorandum?
$60,000 is not alot so our investment chocies would be limited. Debt leverage would be an option or we would just take small deals in the begining. Why can't we leverage a proporty against a loan and use the $60,000 as a downpayment.
I think the democratic system will work with a good group of investors. We would be able to mannage a consensus with all major financial matters. The minor matters would be handled by the officers of the corporation.
As far as finding investors... I was unaware of the SEC regulations reguarding soliciting. Since you have mentioned it I have begun to research it on other threads. Thank you for pointing it out to me.
No, I have not prepared an offering memorandum. Could you please explain to me what that is and what it is for. My business plan is in the very early stages of development. I still have alot to learn, yet I am eager and determined to find out. I would be thankful of any additional advice.