Who can invest?
Group Capital accepts investments from Accredited Investors, those earning more than $200,000 annually ($300,000 if investing jointly with a spouse) or having over $1 million in net worth (excluding their primary home.) Non-Accredited investors may participate in certain offerings under certain circumstances. Before investing in an opportunity limited to accredited investors, Group Capital must verify your status through such methods as documentation from an accountant, lawyer, bank, or financial advisor.
What will I own?
Investors in pooled investment vehicles own beneficial interests, or “units,” in the limited liability company set up to make a diverse array of investments. Units represent an ownership stake in the company. Group Capital’s funds can hold investments in multiple types of instruments and in various companies. Please review all offerings documents carefully to be sure that you understand your investment.
Can I invest through my LLC, Trust, C-Corp, or LP?
Yes, although Group Capital will need additional information, such as a copy of your trust agreement, articles of incorporation or organization of the entity that will be investing as well as signed investment documents signed on behalf of the entity.
What fees do investors pay?
Each Group Capital fund has its own specific fee schedule, detailed in each offering memorandum. For example, Group Capital’s Diversified Growth Fund charges an advisory fee equal to 2% of net assets and a performance fee of 20% of the portfolio’s net profit, if any, subject to a loss carryforward provision.
Do you conduct due diligence?
As a broker-dealer registered with the U.S. Securities and Exchange Commission, Group Capital conducts due diligence on every potential investment we consider. Many of these are well-established, middle-market, private companies, while some may have a history of losses.
What research should I conduct?
Investors should conduct their own due diligence because every investment involves risk. Investors should consult their attorney and/or a financial professional to help evaluate any deal.
Are these investments risky?
All investments involve risk, even those that have carefully been vetted by Group Capital. Investors should never invest more than they can afford to lose or invest so much that the loss of your principal would affect your lifestyle or retirement plans. Securities offered by Group Capital are not publicly traded, are illiquid and may significantly decrease in value. Investing in private companies requires high risk tolerance and long-term commitments of five years or more. Investors must be able to afford to lose their entire investment.
How much may I invest?
While securities law imposes strict limits on investments for non-accredited investors, an Accredited Investor has no limits. Each fund has its own minimum investment. For example, Group Capital’s Diversified Growth Fund requires a minimum investment of $25,000.
What is Reg D?
Under Regulation D (or “Reg D”) of the Securities Act of 1933, a company can offer to sell securities without registered those securities with the U.S. Securities and Exchange Commission, under three rules, the most common of which is Rule 506. That rule permits issuers to raise an unlimited amount of money from an unlimited number of accredited investors, and up to 35 non-accredited investors, if certain conditions are met. General solicitation (or public advertising) of Rule 506 offerings was not permitted until Title II of the JOBS Act became effective in September of 2013, creating the new Rule 506(c). That clause permits issuers to generally solicit and advertise an offering if certain conditions are met (including, but not limited to, taking reasonable steps to verify that each investor is accredited). The JOBS Act was signed by
President Barack Obama in 2012, establishing a new legal framework for private share offerings.
What do I need provide for Group Capital to invest in my company?
Before Group Capital invests in any company, our investment committee will review your offering memorandum, overview presentation, historical and projected financials and any term sheets. A representative from Group Capital will review each prospective portfolio company, to discern if your company is a good fit for our funds. If your company presents a good opportunity for our investors, we will contact you to learn more about your firm, review your materials, and conduct our rigorous due diligence process.