Raising capital is a costly endeavor and it requires compliance with securities laws. But people who want to pool their funds to help businesses grow have some options to avoid being subject to more restrictive securities requirements. One option is to put together an investment club.
What is an investment club?
Investment clubs are groups of people who pool their money together to make investments. Members of investments clubs study different types of investments and then the group decides to buy or sell based on a majority vote of the members. The meetings of members may be educational and each member must actively participate in investment decisions. Often, investment clubs are set up as partnerships.
What’s the role of the SEC?