By Travis Smith on January 20, 2022

The Beginner's Guide to Group Investing: How to Build Wealth with Friends

“Money and friendships don’t mix.” 

How many times have you heard that saying? Many people consider it common knowledge that financial and personal relationships should be kept separate. We’re here to challenge that assumption.

Want us to let you in on a secret? The wealthy have been mixing money and personal relationships for centuries. The rich discovered long ago that group investing could make them richer. By pooling capital, they can access bigger, better deals with much larger ROI. In other words, it’s how they were able to build wealth—and it can work for you, too. 

Let’s jump into the basics of group investing. We’ll define what group investing means and outline seven keys to successfully building wealth with friends—without becoming enemies.

What Is Group Investing?

Group investing is when like-minded friends or family come together to pool capital together to purchase a wealth-building asset jointly.

When we think about “group investing” or “investing clubs,” a lot of us probably picture the old “stock clubs” of the 1980s. Do a lot of people still come together to invest in stock? Sure, but that’s not where group investing ends. The wealthiest investors regularly team up with friends to purchase real estate, art, business franchises, and more. But it doesn’t have to be a secret just for the super-rich—anyone can invest as a group, as long as they have the right system. 

Have you and your friends ever discussed buying a rental property together? Or maybe you and your siblings have always wanted to break into the fine art trading scene? If you’ve ever thought about teaming up with people in your social circles to buy an asset you can’t afford on your own, you’ve come to the right place.

Related: Brian diversifies his portfolio with like-minded passive investors

At Tribevest, we know that getting started with group investing can seem intimidating. With all the paperwork and legal requirements, it can be hard to know where to start. Besides, you value your relationships with your friends and family, and you might be afraid that money could sour those bonds. That’s why we’ve created our platform—and this guide—to get your group investing experience started the right way. 

New call-to-action

1. Choose The Right Investing Group

The first step to group investing is… you guessed it—establishing your group. 

Who should you choose to team up with for group investing? Chances are, a few names are already springing to your mind. When it comes to selecting your group members, we believe there are three main criteria you need to consider:

  • Are these friends like-minded? Do you have friends with whom you often chat about building wealth or investing together? These make excellent candidates for your investing group. Choosing friends who are interested, motivated, and on the same page will save you headaches down the road. 
  • Are these friends serious about building wealth? You’ve talked about pooling your funds to buy a vacation property or flip a house together before… but was it just talk, or are they serious about the opportunity? Ensure that you and your friends or family members are on the same level as far as “seriousness” goes before you dive into an investment opportunity together.

  • Do these friends have the capital available to invest? This doesn’t mean your friends have to be filthy rich for it to be worth partnering up. One of the chief advantages of investing as a group is building more wealth using less capital upfront. However, you’ll want to invite friends and family members who have enough investable capital to participate in the opportunities you have in mind without breaking their bank. 

Related: Should I Invest with Family & Friends?

Many of our tribes have found their group in wealth-building communities. Local investing clubs or online communities like Left Field Investing, Wealth Formula, and Cash Flow Diaries can be the perfect way to meet like-minded friends with whom you can launch an investing group.

2. Align Your Group Early and Often

One concern when considering teaming up with friends or family is how investing together might complicate personal relationships. The best way to preserve (or even enhance) your relationships while building wealth together is to communicate clearly and align your group as early and often as possible.

Related: College friends form professional group, then an investor group

Before you begin investing together, we recommend you establish and agree upon the following items:

  • Group Plan: Your group plan takes the idea of investing together out of the “dreaming” phase and into reality. Establish the following:
    • Group mission
    • Number of members
    • What type of investments you’ll pursue
    • Capital requirements (AKA, how much money is everyone on the hook for?)
    • Investment goals
    • Launch date
  • Group Rules or Bylaws: Establishing rules early on will help the group feel more formalized. The structure of your group is what will hold everyone accountable without making any member the “bad guy.” Rules should include:
    • Initial contributions
    • Ownership structure
    • Voting thresholds (what percentage of the group has to vote for something for it to pass?)
    • Exit strategy

Establishing your plan and rules early on will clue all members into what they’re signing up for from the get-go. Additionally, setting up an exit strategy will ensure that no one in the group feels trapped in the opportunity. Allowing members to exit the group will not only make it easier to get buy-in, but it will also protect relationships by giving members an “out.”

One last note on alignment: This isn’t a “one-and-done” process. You’ll want to schedule regular check-ins with your group and keep lines of communication open throughout your investment. 

3. Get Your Paperwork In Order

Getting your paperwork in order can feel daunting. Most people don’t know where to start. But once they’re all laid out, all you need to do is take the steps. 

Establish an Operating Agreement

In step two of this article, you laid out your group plan and bylaws. An operating agreement is similar but a bit more formal. This contractual document lays out your investing group’s rules and operating procedures.

Your operating agreement should include a description of all your group members’ rights, duties, liabilities, and obligations. Setting up this formal document upfront will provide clarity to all group members regarding expectations, ownership, and more.

Additionally, if you live in California, Missouri, Delaware, or New York, you’ll be required by law to have a formal operating agreement before you can move on to the next step, filing your LLC.

File Your LLC

To get started investing as a group, you’ll need a formal business entity to transact with! There are multiple entity types, such as partnerships, C corporations, and S corporations, but an LLC is the best option for most investing groups.

The cost and requirements of LLC filing vary by state, so ensure that you review the filing requirements for the state in which you hope to file. You can file in any state so long as you have an in-state permanent address. If your group members are spread across state lines, you’ll want to ensure you file your LLC in the state that is most beneficial to your group.

We’d be remiss to leave out that if you decide to invest as a group using Tribevest, we’ll file your LLC for you—fees and all! Here’s what one customer had to say about our process: 

“Thank You!” No inconvenience in your platform sir. I brag to every attorney I know about how easy your platform makes this and how overcomplicated we attorneys have made this. 

-Attorney & Tribevester

Open a Business Bank Account

Lastly, you’ll want to apply for a business bank account. Setting up a business bank account helps ensure that every member feels like an equal participant. It’s also a great way to separate your investing group relationships from your personal relationships. 

When you start a business, it’s best practice to separate your personal and business funds. Your investing group LLC should be no different! The business account will serve as a single, centralized place for all group capital, removing any risk of group members accidentally misusing group funds for personal expenses. 

4. Pool Your Capital

Your group plan and operating agreement are set. Your LLC is filed. Your business bank account is ready and waiting. It’s finally time to pool your capital!

Once you’ve established each group member’s contribution amounts, organize deadlines for contributing capital. If you don’t want to feel like a debt collector, you can use Tribevest to coordinate these efforts on your behalf. 

This is the exciting part of the process—once each group member has contributed their funds to the business bank account, you’ll finally be ready to start investing as a group!

5. Find a Deal

Now that all the paperwork is out of the way, it’s time to get into the fun part of group investing—seeking out and taking part in investment opportunities!

When you aligned your group, you established what type of investment you’ll pursue. Maybe you’ll be buying a vacation home together, or investing in real estate investment trusts, or perhaps you’re diving into the world of cryptocurrency and NFTs. 

Related: 24-year-old Creates Tribe to Launch Short-Term-Rental Business

Whatever path you choose, now is the time to scope out the perfect deal for your group. When you’re considering deals, keep the following in mind:

  • Price: The number one thing on your mind should be the upfront price. Investing as a group means you have more capital than you did alone, but it doesn’t mean your capital is infinite! Ensure that the deals you’re examining fall within your established price range.
    Pro tip: coming in under budget on your first investment can encourage your group to stick around and invest on another venture together in the future!
  • Risk: No investment is without risk. The good news is that group investing spreads the risk, making it safer for the whole group. Still, you’ll want to ensure your group is on the same page about the amount of risk they’re willing to undertake with this investment. 
  • Return: There’s no way to guarantee a return, but you’ll want to keep your investment goals in mind. Does the group want to start with baby steps, or are they looking for a skyrocket? Select your opportunity appropriately.

Once you’ve found the perfect deal and voted as a group, it’s time to execute! In other words: Pull the trigger and purchase your first investment asset as a group!

As a note, finding the perfect deal isn’t always step five—sometimes, it’s step one! We see a lot of groups that form around a specific deal. There’s nothing wrong with that! Just as long as you circle back and complete steps one through four before putting down any cash. 

6. Repeat!

You may think that purchasing your investment asset is the end of your journey, but we disagree. It’s just the beginning!

The surest way to build wealth is to diversify your assets. Group investing makes diversification easy by allowing you to make more high-value investments faster. Talk with your group and consider rolling the profits you earn from your first deal into another deal, then another! 

Alternatively, you can start a second investing group to explore a different type of asset. For example, suppose your first group was interested in buying property together. In that case, you could start a new group with friends interested in purchasing fine art or collectibles together and a third group for your crypto-minded friends. The possibilities are endless! 

7. Manage Your Group


Whether you’re planning to pursue additional deals, or just ride out the current investment, you will still need to take steps to manage your group. There are two sides to managing your investing group: The relational and the legal sides.


On the relational side, let’s return to the point we made in steps one and two about aligning your group. You should schedule regular group meetings to ensure all parties feel involved and included.

When it comes to managing communication in your group, you’ll want to have processes in place for:

  • Logging voting records and decisions
  • Ledger management
  • Updating group members with activity reports
  • Setting up a process to share banking and investment statements


Setting up your LLC is a great starting point for your group, but keeping your investing group compliant requires that you stay on top of a few things. Legal and tax requirements change—in other words, just because your LLC was compliant when you filed it doesn’t mean you still are today.

Additionally, you’ll need to file a report with your state and send tax documents out to your members each year. As the group founder, this will be your responsibility, so set calendar reminders to ensure you don’t forget! 

Level Up Together By Investing Together 

Group investing doesn’t have to be intimidating—when you’re doing it with the right team, it can be rewarding and fun. Teaming up with like-minded friends, setting up the right systems, and getting the whole tribe on the same page will set you up for success. Then, all that’s left to do is start building wealth together. 

Getting all the paperwork, documentation, and alignment settled for your group can feel overwhelming. If your head is spinning just thinking about it, you’re not alone. But don’t let your group stay stuck in the daydreaming phase—make your group investing dreams a reality with the help of Tribevest! Tribevest arms you with the tools and resources you need to team up with friends and family to build wealth together without risking your relationship.
Explore Tribevest for free to see how!

New call-to-action

Published by Travis Smith January 20, 2022