Kim Lisa TaylorSecurities Attorney, Founder, Syndication Attorneys, PLLC · Corporate Securities Attorney, 2x Best-Selling Author, Nationwide Speaker | Private Placement

Why the COGP Capital Raiser Model Isn’t Sustainable 🚫

17 Aug 2024 · 1 min

Watch on YouTube

0:38

In this brief commentary, the speaker argues that the co‑GP (co‑general partner) capital raiser model should only be used as a temporary stepping stone rather than a long‑term business. The model is deemed unsustainable because it exposes practitioners to legal risk—specifically accusations of acting as an unlicensed broker. To continue operating legally, one would need to become a registered investment advisor or shift to a different structure, such as a fund‑of‑funds. The speaker emphasizes that relying on the co‑GP model as a permanent revenue source is likely to lead to regulatory trouble.

Chapters

The whole co-GP capital raiser model, I'm not a fan of that. It's the only reason that you should be doing that is to, as a stepping stone until you can gain enough experience and find your own deals. You don't want to do that as a sustainable business model. You know, eventually you're going to get caught. Somebody's going to accuse you of acting as an unlicensed broker, and you either have to become an investment advisor to be able to legally do that and invest in other people. You're, you know, it's just not a long-term sustainable business model. If you want to know more about that, what I'm alluding to is something called a fund of funds.