Investment Pools: A New Way to Raise More Capital

This article will explain how sponsors can raise more capital from their current investor base with Investment Pools

What are Investment Pools? 

An Investment Pool is a feature designed to unlock the full potential of your investor base by allowing investors to collectively raise capital alongside their friends, family, and colleagues.

Built directly into the investor portal, you can now provide incentives to your investor base that will rapidly build your investor base through referrals, the golden source of new investors.

The old way of doing it

Investors have been pooling money together for a long time; however, they've most commonly done this by creating an LLC, and then having each investor contribute as a member. Then, that LLC places investments in private deals. 

This LLC-driven approach creates an administrative burden, annual filing, and tax compliance, and lacks transparency of what exactly each member owns in the underlying investments. 

Our Investment Pools feature removes all of that headache. No need to create an LLC. Simply create an investment pool, invite other investors to join, and start investing. Each investor can invest however they want on a deal-by-deal basis, whether it's as an individual, an entity, or using their IRA account. Everything is easily tracked, and investors have complete transparency into exactly what they own. 

Benefits of Investment Pools:

✅ Raise More Capital From Current Investor Base

Investment Pools enable sponsors to access more capital by offering investors a unique feature that solves the investor's pain points and unlocks additional capital through referrals. This is done primarily through two unique offers:

1. Meeting Investment Minimums to Diversify

Investors can use Pooled Investments to pool money to meet an investment minimum and invest in more deals, which results in better diversification.

Example: Instead of a single investor investing $100,000 in one offering, an investor could create an investment pool, invite four other investors, who then can all contribute $20,000 each across four offerings. As a sponsor, you have now turned a single $100,000 investment into $400,000 across four unique deals, while adding four new investors to your database. 

2. Get Better Investment Terms

Investors can access better terms in exchange for investing larger amounts as a group. This is typically available when there is an investment class for investors who meet a large minimum investment requirement in order to unlock better economic treatment.

Example: Class A might have a minimum investment of $50,000 and provide a 7% preferred return and 70/30 splits, whereas Class B has a minimum investment of $500,000 and provides an 8% preferred return and 80/20 splits. By using an investment pool, investors can pool their capital together to unlock better terms that are available to $500,000 investments.

✅ Expanded Reach
Each Investment Pool comprises a dedicated group of investors, enhancing the sponsor’s network and increasing their visibility effortlessly.

✅ Differentiation in the Market: By creating an investment pool on your portal, investors are committing to a long-term investing relationship with you, and by providing them with this feature, they will prefer to place investments with your company, and it will make you stand out in the market.

How an Investor Can Create an Investment Pool and Invite Their Network to Invest Together

Investors can create an investment pool from their investor portal using the following simple steps. You can also reference and share the investor-facing knowledge base article with your investors, which is found here.

Steps to Create an Investment Pool and Invite Investors:

Step 1: Navigate to Profiles > Investment Pools.
Step 2: Click "Create New Pool" and assign a descriptive name for easy identification.
Step 3: Input the email addresses of friends and family, then click "Save & Invite".
Step 4: An invitation email will be sent to all Invited contacts to sign up/Login and begin the investment process.

If the invited contact is new to the platform, their name will be displayed as a Pool Member once they complete the portal sign-up process.

For existing contacts already on the platform, they will be automatically added into the pool

Steps for investors to invest through an Investment Pool

The investment process remains unchanged — click here to learn more.

The only addition with the Investment Pools feature is a new dropdown menu in Step 2 of the investment process, allowing Investors to select the Investment Pool they're investing through.

Once the investment is made via an Investment Pool, a small Pool icon will appear next to the investor's name, indicating they’ve invested through a Pool.

How Sponsors Can Identify Investment Pools and Track Commitments

Sponsors can identify which Investment Pools are participating in a deal, along with their commitment and approved investment amounts.

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Step 1: Navigate to Portfolio > The Offering > Investors.

Step 2: Just below the Dashboard, you’ll see a list of participating Investment Pools along with key statistics such as total commitments and approved amounts.

Step 3: To view individual pool members who have invested, scroll down the investor list. Each investor associated with a Pool will have a purple tag displaying the Investment Pool name above their name.

How Sponsors Can Send Mass Communication to a Specific Investment Pool or All Pool Owners/Members

Every time an Investment Pool is created, a system generate tag with the name of the Pool is added under Contacts. For example, if an investor is added to an investment pool named “Horizon Alumni Club” a tag called “Pool Member -  Horizon Alumni Club” will be added to every pool member on the CRM

Additionally, there are common tags like "Pool Members" and "Pool Owners" to help streamline communication.

To send personalized communication:

1. Navigate to Email > Send Email.

2. In the recipient field, search for:

   • "Pool Members" to message all members across pools.

   • "Pool Owners" to communicate with all pool creators.

   • Or the specific name of the Investment Pool to target members of a particular pool.

This tagging system makes it easy for Sponsors to deliver tailored updates, reminders, or investment information to the right audience.