LLC Joint Ventures

Most of the crowdfunding platforms are not ideal for the individual LLC owner who is looking to both keep control of his or her business, and the business itself is not well-suited to being bought out by a larger firm (consider a local restaurant business, for example). A business like this may need financing, but is unwilling or unable to take on new debt for a particular reason, but still needs financing for a particular business need. For companies like this, they may benefit from one or more equity partners. In exchange for upfront capital, the partners receive either equity in the business, or a revenue share such as a royalty or commission on future business revenues up to a predefined dollar amount. Kevin O’Leary of Shark Tank often proposes this type of funding to business owners. In the Restaurant example, the investor could receive $2 for every meal purchased or 50 cents for every drink purchased up to a dollar amount that both returns their capital and provides a reasonable rate of return on the investment. The investor would not receive any ownership in the business.

In the equity ownership model, the investor would be added as a member to the business LLC through a change in the Operating Agreement, and would receive a share in future profits (not revenue) each quarter or how ever this is defined. 

We are currently working on a platform that will showcase our clients to potential investors, and provide them with the ability to strike their own deals. We will also provide our clients with primers on their funding options and how these agreements could be structured. To stay informed, sign up to receive our newsletter.