Raise Capital Faster with Performance Only Fee Structures | Summary and Q&A

TL;DR

The content discusses the benefits of performance fee structures and provides investment suggestions, particularly for buying a soccer club.

Key Insights

• 🤱 Performance fee structures, such as gross revenue royalty and profit share, are valued by the speaker as they align the interests of investors and the platform.
• 🤝 The Investor Club platform focuses on passive investors who want to allocate their funds into deals.
• 🧡 A lean 10% performance fee structure may not always be appropriate, and industry standards range from 20-30% profit share.
• ⚽ For buying a soccer club, offering debt notes with an annual return, equity warrants, or a gross revenue royalty structure can be beneficial to investors.
• 🤲 Getting investors' initial capital off the table can alleviate pressure and provide more flexibility in the deal.

Transcript

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Questions & Answers

Q: What is the Investor Club platform and who can participate?

The Investor Club is a platform for passive investors only, specifically for those who want to allocate funds into deals. It is not open to fund managers, syndicators, or placement agents.

Q: How are the fees structured for investors on the Investor Club platform?

The Investor Club charges a profit share as its only fee. The profit share is a percentage (typically 10-30%) of the investor's profit from a deal. No upfront costs or investment fees are involved.

Q: What happens if a deal loses money for an investor on the Investor Club platform?

In the event of a loss, the fees charged by the Investor Club on other profitable deals are waived until the investor recoups their initial investment. This ensures maximum alignment between the platform and investors.

Q: What are the recommended fee structures for buying a soccer club?

The speaker suggests considering a combination of debt notes with an 8-10% annual return and equity warrants for investors. Alternatively, a gross revenue royalty structure could be implemented to provide investors with a percentage of the club's revenue until a certain return is achieved.

Summary & Key Takeaways

• Performance fee structures, specifically gross revenue royalty and profit share, are preferred by the speaker for investors on the Investor Club platform.

• The Investor Club platform offers a no-cost sign-up and only charges a profit share when investors make a profit, with fees waived if a deal loses money.

• A lean 10% performance fee structure may not always be suitable, and a more industry-standard 20-30% profit share may be preferred.