Pros And Cons In Joining An Investment Club

Why Athletes Should Consider When Joining An Investment Club

An investment club is essentially a group of individuals who meet for a purpose of pooling money and investing. It could be for real estate, startups, small businesses, etc. An investment club is meant to allow an individual to be part of more investments while not expanding as much risks. Although there’s been history with athletes starting funds there’s been a shift in culture amongst athletes. Most of the athletes we hear getting into investing are the marquee guys like Carmelo Anthony or Kevin Durant but there are a number of other athletes that are involved. For example, Russel Okung, Kelvin Beachum, Luol Deng along with countless others are athletes that are involved in different investments and investment groups. 

Not every athlete will have the funds to just wake up and start their own investment club. Take me for example. However just because I can’t start my own big VC fund doesn’t mean I can’t join one. Here are some pros and cons to joining an investment club:

To Learn

Being with like minded, more experienced individuals in a space I’m interested in has only helped me learn more about the industry what to look for with different ventures, what questions to ask how to read statements, these are all things I would have to ask someone about or not know at all before. By being engaged and learning, I’m able to develop my own valid opinions concerning a proposed venture

Minimize Risk

Being able to get in a deal without throwing the kitchen sink is an added bonus for possibly joining an investment club. Being able to speculate with money that you have already allocated for your investments is great because it allows you to not only play more hands at the table but increases your odds to win out at the end. You also have a better protection because you are with a team instead of going in solo.

Access Minimums

Sometimes large and profitable companies are difficult to invest in with little money. If you are a small player an investment clubs allows you to pool money together and open up more opportunities for yourself. There is power in the group

Teamwork Makes The Dreamwork

Think of an investment club like a group project , you could easily do the project yourself but if you do it with your team you can get more done be more organized and be more successful in the process just like in sports with the exception of the individual ones, the best teams succeed by working together. 


Cons

 

Autonomy/Disagreements

When you are in an investment club, you don’t have luxury of controlling the final decision. You may have to stick with decisions you may not be in favor for because majority rule wins in most cases for clubs.


Legality

When multiple people are involved the legal implications and protection must be taken with great consideration. When you are by yourself, it's easier to handle some of the legal requirements that must be handled versus dealing with a large club.