In this short discussion, the presenter explains how an investment club differs from traditional syndications or funds, allowing both accredited and unaccredited investors to participate without the heavy regulatory burden of private placement memorandums (PPMs) or 506(b) filings. The club is formed around a business plan or investment criteria, and members vote on each deal to demonstrate active participation, which keeps the structure out of SEC securities regulations. Marketing is limited to warm, pre‑existing relationships—advertising can be done via a brand’s website or social media once prospects are “warm.” The conversation also clarifies that a club cannot invest in a property that is already being raised through a fund (the fund‑of‑fund model), but a club can run alongside other clubs or funds on separate deals. Catherine Bell asks about pre‑existing relationships and per‑deal participation, and the presenter confirms that members must be known and trusted, and each deal must be exclusive to the club.
Chapters
Are you in the deal room? Well, not completely the opposite, but we cut through all the red tape of going that route and allow you people to work with unaccredited investors. So an investment club is— it's not a syndication or a fund. Where it's similar to a fund is you're raising capital based off of, you know, a business plan or a criteria. Now with us, because we're not a syndication or a fund, there's no need to file paperwork for PPMs. Create 506(b)s, do all the, everything that is normally involved, any outrageous upfront costs. You could start raising capital basically right away, and there doesn't even need to be a deal under contract. So basically the way it would work is, you know, the club would form based on the business plan, and then your network would join in with you based on, you know, what you're looking to accomplish with the general business plan or criteria. Where it is a little bit different, you know, I'm not sure how familiar all of you are with funds, but there is going to be a voting process. So as soon as a property is brought back, the investors or the club members are going to vote as a group that they agree that it fits the criteria and that as a group they want to move forward with the opportunity. The reason the voting happens is that's active participation and that's why we're not a security. So there's no need to file with the SEC. And that also allows anyone to invest in the investment club. They can be accredited. They don't have to be.
So do we have to have— we have to have a preexisting relationship.
So you— it's— it is your network. So it's, you know, people that you know, like, and trust, but you can bring in people. So like people do run, you know, paid ads. You can't run it directly to your club, but you can bring it to your brand or, you know, you— if you have a website or a social media page, once they're in there and they're warm, that's when you can talk about the investment club, what it's doing, you know, when you're, you know, when you're going to be launching it, how to join the investment club, everything.
So like we could, we could put Katya's deal in here and all our membership could invest inside of Katya's deal, right?
Yes, as long as it's not currently going into a fund or anything like that, right? The fund of fund model, which Tommy was talking about earlier, doesn't work with an investment club. So like Can we raise capital through Titan 23, which is for accredited investors, and then also have a fractional club for the same property? Not for the same property, because it's going— if it's going into a fund, then unfortunately that's the fund-to-fund model, which doesn't work with an investment club. Well, but it's not one or the other, because we have plenty of club leaders that are running funds as well as clubs.
