The partnership or LLC paperwork spells out exactly how distributions are handled and whom will handle them in the event that the manager (me/my company) fails in their capacity to perform or is incapacitated (dead/injured) and cannot perform duties. I know this one sounds complicated - especially for beginners - but it’s really just a matter of common sense and putting yourself in the investors shoes.


I use equity investors - the pooling issue is easier to overcome if you bring private investors in as equity partners in the deal. That way, each investor owns a % of the company in proportion to the funds invested. The investor funds aren’t commingled together under one particular security. The security being offered is a unit interest in an LLC or LP. The disclosure documents and other offering paperwork provided to the private investors show them what their investment is.