Co-Invest and Syndication

Hello - Has anyone with co-invest opportunities at their firm ever under the radar made the opportunity known to friends/family? Can you form an LLC and raise capital into it and then contribute, or does your firm require it to be a personal contribution? I'm sure the firm has certain disclosure requirements that would prevent you from sharing details with others outside the firm/investment structure. Just thinking through the implications and don't want certain people in my life who were there financially for me to miss out on the opportunities I've been blessed with.

Comments (8)

Nov 11, 2021 - 1:12am
creops, what's your opinion? Comment below:

Yes, just immediate family though. In today's market you'd be hard pressed to lack capital for any type of deal our type of firms would be doing, asking for new investors to essentially jump the line for opportunities is only likely to be accommodated for very few, if at all. Most likely not out of necessity for capital.

Nov 11, 2021 - 9:34am
CREnadian, what's your opinion? Comment below:

For sure - direct family at least, not sure if your firm would be fine with you raising from your whole social network.

Pretty common to either form an LLC, or structure it as a loan to yourself which you can reinvest. I've also seen some people take AM fees on friends/family capital they're co-investing lol.

Most Helpful
Nov 11, 2021 - 9:42am
redever, what's your opinion? Comment below:

Yeah, this is hardly a new idea. Just be careful on who you take money from, how you structure, etc. This would make you very much a "promoter" and syndicator yourself, and potentially subject all the same regulation and liability. I would also be hyper transparent with your employer (and their securities counsel), since you are an employee, it could be viewed that this LLC is a direct offering and that could cause issues. 

To note, people would do this and literally set up promote/fee structures for themselves (like within the FF LLC), I render no judgement, just pointing out the opportunity here if you really want to have some fun! 

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Nov 12, 2021 - 9:24am
redever, what's your opinion? Comment below:

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