8 Insights for Private Investors & Single Family Offices | Summary and Q&A

TL;DR

Key insights for foreign investors in family offices include structuring deals with gross revenue royalties, using LLC structures to reduce risk, securing collateral, and exploring tax-efficient strategies.

Key Insights

• 🤝 Structuring deals with gross revenue royalties and multiple LLC membership classes reduces risk and provides preferred returns.
• ✳️ Inquiring about the management of downside risk and securing collateral is crucial for protecting investments.
• 🚕 Utilizing different tax strategies like bonus depreciation and cost segregation can enhance the tax efficiency of deals.
• ↩️ Preferred returns can be structured in volatile markets to mitigate equity risk.
• 🤝 Staying under 20% equity partnership in deals can eliminate the need for a bank guarantee.
• 🤝 Having a family office dashboard and clear allocation of goals attracts exclusive and better-valued deals.
• 🤗 Valuable individuals in family offices may not necessarily present themselves in a flashy manner, emphasizing the importance of being open-minded.

Transcript

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Questions & Answers

Q: What are some benefits of using gross revenue royalties while structuring operating business deals?

Gross revenue royalties provide foreign investors in family offices with advantages such as consistent cash flow, reduced risk, and a proportional share of revenues.

Q: How can investors protect their interests in deals?

Investors can protect their interests by structuring multiple LLC membership classes, allowing for preferred returns and a reduced risk profile.

Q: Why is it important to ask about collateral in a private and direct investment?

Inquiring about collateral ensures that a worst-case scenario does not result in the complete loss of an investment, providing additional security for foreign investors.

Q: How can foreign investors make deals more tax-efficient?

Foreign investors can utilize strategies like bonus depreciation, cost segregation, and self-directed IRAs to enhance the tax-efficiency of their investments.

Summary & Key Takeaways

• Gross revenue royalties are a beneficial way to structure operating business deals for foreign investors in family offices, providing several advantages.

• Structuring multiple LLC membership classes allows investors to participate in a way that reduces risk and offers preferred returns.

• It is important to inquire about how downside risk is managed and secure collateral in a private and direct investment to protect investments.