Are you a serial investor, but with more money than time? You like the idea of being a business angel but you’re too busy to research companies yourself? Investment clubs or partnerships may be just what you’re looking for.
The basic aim of an investment club is — for a fee — to allow members the opportunity to invest in deals that they might not otherwise see. They typically finance companies looking for new capital of between £250,000 and £5 million — too small for most venture-capital and private-equity funds. Unlike ‘business angel’ syndicates, where members do their own due diligence and deal-structuring, investment club management does the hard work and club members simply put up the cash.
Investment clubs are a relatively recent phenomenon. According to David Giampaolo, chief executive of Pi Capital, they were born during the late-1990s internet boom. Many invested in technology businesses that crashed. But while those initial investments may have failed, the club business model is thriving.
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