#117: Group Investing - What are the Keys to Sucess & How to Avoid Pitfalls
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Today, we have Travis Smith, he’s the Founder and CEO of Tribevest, a platform that makes it easy to invest as a group and do deals together in as little as 48 hours. He started his career with Morgan Stanley but realized the most direct path to wealth and financial freedom wasn’t as an individual. The path is as a group, as a tribe. Travis is obsessed with building a platform that standardizes, streamlines, and ultimately de-risks group investing. He won’t stop until every single-player deal on and off the internet is an opportunity for a multi-player experience.
In this episode, we’re discussing…
[2:14] What is tribe vest?
[4:09] How this platform works, is this for general partners or is this for just limited partners
[6:24] How is the business partnership structure, does it work as an LLC?
[7:28] Accredited investors vs. non accredited investors depending of which percentage owns of the investment
[9:54] How does someone find and align with their tribe
[13:10] The importance to get all the LLC paperwork, covered each other and protected, and how tribe vest helps on this
[20:05] What are the tribes saying, how it has been impacted their lives this way, and some ideas of the current deals they have done.
[23:59] What the tribevest.com is like, does it have startup fees or monthly, does it have kind of packages. How can they do once they hit tribevest.com?
[27:19] Other way our listeners and find Travis Smith
Resources from Travis
Tribevest.com | LinkedIn Travis Smith | Twitter | Twitter Travis Smith | Facebook | Instagram
+ Read the transcript
Mike Stohler
What if you could be doing something smarter with your money that creates income. Now, if you're wanting to get ahead financially, and enjoy greater freedom of choice, if you want a comfortable retirement, and you know you'll have more choices, if you can do more with your money. Now, if you've wondered who else is creating ways to make their money work for them, and you want actionable ideas, with honest pros and cons, and no fluff. Welcome to the Richard geek podcast, where you here helping people find creative ways to build wealth and financial freedom. I'm Mike Stohler, and in this podcast, you'll hear from others who are already doing these things, and learn how you can too.
Alright, everybody, welcome back to another episode of the richer geek. Today, we have Travis Smith. He's the founder and CEO of tribe vest. Tribe vest is a platform that makes it easy to invest as a group and do deals together. In as little as 48 hours. He started his career with Morgan Stanley, then he realized the most direct path to wealth and financial freedom wasn't as an individual. The path is as a group, as a tribe. Now, Travis is obsessed with building a platform that standardizes streamlines and ultimately, de risks group investing. He won't stop until every single player single player deal on and off the internet is an opportunity for a multiplayer experience. That is a lot to comprehend how he, Travis?
Travis Smith
I'm doing great. Mike, we've been looking forward to this, this meeting in conversation with you.
Mike Stohler
Yeah, you know, this is? This is interesting, you know, so tell us a little bit, the higher level before we dig down into what is tribe vest.
Travis Smith
Yeah, you know, real simply, we've simplified group investing. You know, we didn't invent group investing. The wealthy have been doing it for centuries. But they have the benefit of a country club network, they have advisors and attorneys at the ready. And, you know, when you set up a group invest in an investment group the right way, it's a, it's a really smart, safe, proven, strategic approach to investing. The problem is, is if you don't have that Country Club network, and have never done this before, don't have attorneys at the ready. It's a it's, it's a hard thing to do it is and I'm speaking from experience. And you know, what tribe best is done is build a platform that just makes it super simple. We give you the ability to, to launch an investor group, open up an FDIC insured business bank account, have all your members contributing, you're all operating from one single pane of glass tribe dashboard. And we keep all the records so you can transact and invest together. And it's a beautiful thing. And yeah, to answer your question, we've simplified and have made group investing accessible to everybody.
Mike Stohler
Now, is this a platform for the investor or for the, you know, you put it this way, for the act of or general partner, and the limited partner or is this for just limited partners? What is it?
Travis Smith
Yeah, Mike is you know, you know, there's, there's a couple there's a, there's a few different categories here. You know, you're very familiar with putting together syndications. Right. This is not that this is not that so this really is the invest for the investor. So for example, your your deals that you put together, our tribes would be investors into your syndications. So what they're doing is our tribes are coming together and this is just one of the reasons but you know the syndications could be 25k 50k 100k to get in and out You know, that's a lot of money to be right. And, you know, a check, I don't care who you are, and especially if it's your first time getting into these types of things. And so what our tribes do is they they come together form a tribe.
And instead of writing 25k, check each of them all five, five members get together, right a $5,000 K check, and invest in, in a deal that they wouldn't or couldn't have gotten in, on their own. And it gives them the ability to transact as a single investor entity. And so you know, that we're helping people do things they want or conduct on their own. And then a lot of cases, Mike, it's, it's more about, I want to do more deals more often. So where maybe I could do one or two deals a year, now I can do a I can do 10, I can do 12, because I have my investor group, and we're out there having fun finding deals, knocking them down.
Mike Stohler
Yeah, you know, it's, it's, that's a great concept. So how, once you do the LLC, are, are the tribes kind of put in as, like a joint venture? You know, with, I have an LLC, Travis says an LLC, and then we form a tribe, and then we go invest? Are we creating kind of like a joint venture? Or is it how you set it up?
Travis Smith
Yeah, I mean, there's similarities there. But we've even made it more simple. Really, what you're forming is a multi member LLC. And you're operating like a partnership. And that's key. That's key. Because you know, the difference between a syndication and an investor tribe, we actually call multi owner vehicles is what we call them, and keyword, their owner, because the money you put in there, that's you putting your capital contributions into the business, making you an active partner, an active member, and then that LLC, you know, makes the decision where to deploy their capital. And so you're putting your money in, you're part of a business partnership, LLC, it's governed by the operating agreement that we step you through, and and then, you know, you're deploying that capital to wherever the owners decide to do to do so.
Mike Stohler
Now, what was my Oh, so when they you have four or five people that come in as a tribe, and they say, Okay, I want to invest in this project. Now, how do you get around? I would think the, the projects would have to be for non accredited investors. Would that be true? Or can you? Because if it was a syndication that had accredited investors, would each of those individual people have to be credited? Or is it way that the whole group can pull it in? So how does that work with when a tribe goes to find an investment?
Travis Smith
You know, great, great question. So as you've kind of pointed out here, does the tribe need to be accredited does the LLC need to be, you know, credited investor? And the answer is, it's depends on what they're investing in. Right? So we have a you know, we have a lot of tribes that are doing the active investments, more like single family, you know, flips, short term rentals, vacation homes, and it's not just real estate, my they're, they're investing in startups, convertible notes, doing lending deals, crypto racehorses, you know, our you kind of name it, you know, the the convertible or the multi owner vehicle, the tribe entity works really well with whatever you want to invest in. But, you know, getting back to your question, do they need to be accredited? It depends on what they're investing in. Now, a lot of syndications, not all of them require a you know the investor be accredited. And the rule of thumb there is anybody that owns 20% of that investor tribe needs to be accredited. And as long as everybody that owns 20% of that investor tribe is accredited, then that tribe is accredited to
Mike Stohler
Yeah, that's perfect. I was wondering if you're gonna ask that because I deal with that 20% rule a lot. So, you know, it's like, okay, I own at point 01, you owe 19.99. And that's how it goes. So we're talking about tribes, we've been talking about tribes a lot. How does someone find and align with their tribe?
Travis Smith
Yeah, great, another great questions. So, you know, it kind of start with your social circle. And then you can kind of, you know, draw circles going outwards. Of course, you know, we have a lot of family tribes, we see those with vacation tribes, you know, a lot of multi generational families. So, our tribes where, you know, maybe one of the, you know, the older generation is investing in different deals, and they want to bring in, you know, the younger generation, and then vice versa, you know, the younger, the younger, are the ones that have been leveling up, and they want to bring their, you know, the previous generations along, or their siblings along vacation homes is a is a big application for families.
So, you know, families, friends, and friends, of course, are popular place, you know, you think of, you know, the people, you know, like and trust, and that are like minded and are leveling up, have a growth mindset, and maybe are doing the same deals anyway, those are great places to find your your tribe members. And then another place that we're seeing these, these members find each other are out in communities, I mean, not unlike the one you have here with your listeners. But there's a lot of communities I've mentioned, left field investors as a community of passive investors looking for deals. And it's, it's a great group, and a lot of those groups, a lot of those members of that community have talked about different deals together.
And then they decide they want to form a tribe, and they've never met each other other than online or on Zoom, or whatever it's been. But those are also great places to find your tribe anywhere where people are like minded and have similar ambitions is a great place to find your tribe. And it is, it is definitely bring your own tribe. At this point. We are not playing matchmaker or anything like that. So but good, good question.
Mike Stohler
Yeah. So it seems like this is a perfect thing. You know, I talked to young adults a lot that asked me how did I get started, you know, and it's a lot easier now. Because I always on a lot of episodes that I'm on, always talk about, I got started in the PG time, which is pre Google. So I didn't have any help I learned, I basically learned how to invest in real estate through my own mistakes. I didn't have which is still
Travis Smith
The only way you can do it. But you're right. There are a lot of useful tools that
Mike Stohler
Oh, my gosh, you know, it's like, there's a lot of useful tool tools, but I can really see, you know, I talked to a lot of young adults, and they're like going, I don't have that checklist. You know, I've got we're in our mid 20s, we all have good jobs, my buddies at work, we'd love to get started doing a fixer flip or like a short term rental. But they asked me is like, so how do I do it? They always ask me, I mean, this seems like the perfect platform. Because not only is like, first thing I tell them was like don't get, you know, you have to get the LLC paper you have to do the most important thing is that that paperwork, you know, so everyone's covered, you know, protected
Travis Smith Each other, the members protecting the relationship.
Mike Stohler
It is and as soon as they say, Oh no, it's my best friend. He'd never mess. Well, you know, my God, believe me, he will
Travis Smith
If really care about that relationship. Make sure you set it up the right way
Mike Stohler
It is. So it seems like the perfect you know, for all of you listeners out there if you always wondered, like how can I break into a short term rentals? You know, that's what the hot thing is right now. But you don't know how to do it. You've got some friends that you want to do. I always called Joint Venture because that's just what I'm used to. But a joint partnership. This tri vest is the perfect platform seems like to start out because Travis not only do you handle the paperwork for him, yep. You even handled the bank accounts for him. Right. I mean, it's like a cookie cutter white glove service seems like
Travis Smith
Yeah, we Uh, you know, we kind of saw what, again, we didn't invent invent group investing, the wealthy have been doing it forever. The problem is, is the mystery. Do I need an attorney? You know, how do we configure this operating agreement, and we just went in, in, you know, really, you know, reverse engineered what's been being done forever, and made it real simple, put it all on the same dashboard. But you're right, you can file your LLC, you can configure your operating agreement, which is your governing document, and then open up an FDIC insured business bank account. And then the other stuff is like, how do you where do you? Where do you keep records of all these things, right, and we give you a single dashboard, where all your members can log in, they have access to all their documents, they can vote, they can record that vote, they can see their all their bank account information, your cap table, so how much have you put in versus the other members? How much did you own? You know, all that's right there.
And it's funny, Mike, you know, who you were just describing was my brothers. And I, you know, not too long ago, but it was, it was kind of a long, long time ago, 12 years ago, my brothers and I was in my late, late 20s. And, you know, we were on a fishing trip that we couldn't afford, we had just read, you know, Rich Dad, Poor Dad. And we had we, our parents owned a cottage that meant so much to us, our family and our extended family. It was during the Great Recession, and they had to sell it and we weren't in a position to buy it. And we're just, we're like, Well, wait a minute, we got a good job, gotta get income, we got 401 K, why can't Why can't we buy this, and it was a wake up call is we're not wealthy, we are not financially free. In fact, if our jobs go away, which was a very real possibility, in that at that time, we were broke, we were broke.
And so you know, that the old promise of, you know, go to school, get good grades, get a job, you know, what all those things, that was not a path to freedom for us. And I don't think it's a path to freedom for anybody. And we realize that, you know, in order to build wealth, you need to own own real things. Of course, everybody we knew that was a millionaire was investing in real estate, they either became millionaires through real estate, or, you know, we're smart enough to invest in real estate with whatever else they were doing. And but we realized that you know, to break in, you need capital, you need capital, Indian, we know how we didn't have either, we didn't have capital, and we didn't have the guts like you. So you didn't need to know how our guts are both really. And we didn't have you know, any of those things. But together, we're like, we can start to pull capital, right, we'll pull capital, we'll do $500 a month, each, that's $2,000 a month, $24,000 a year. And, you know, in terms of not knowing how to invest in real estate, or what to do. And this was, of course, pre Airbnb, and all these other things that make, you know, different business models, pretty simple. With real estate, we didn't know what to do, but we knew that we wanting to learn and grow together.
So that's what the what that's what the tribe represents, the tribe represents this opportunity to pull capital, get over that threshold, and then be with people that you want to learn and grow together with. And it's, it's, it's so you don't always have to go it alone, right? You're an investor, you're always going to the loan. And now you don't always have to go it alone. And that was what changed our lives. It changed the trajectory of our families. And you know, why we are in the position we are in today was because we broke into real estate investing then broke into investing into real private assets.
Mike Stohler
It's, it's fantastic. You're, it's almost like you're, you're paying it forward, you're paying you're, you're saying look, I had all these mistakes, I had all these challenges, let's create a platform. And especially I see what the younger generations, you know, they they have to they can't do anything without a platform. You know, they have to have something online to do things and it sounds like a great thing. Now can you give me some ideas of what some of the current deals that you've done? What are the tribes saying? How have you kind of like add on if you've gotten any feedback you know about how Like, wow, this was, you know, you've impacted our lives this way.
Travis Smith
Yeah, I mean, it's it's what it's what drives us. I mean, we've now helped over 1000 tribes launch on our platform. And, you know, we actually have a web page that's called our tribes on our website. And, you know, there's over, I think, 20 different testimonials of these tribes and tribe founders, as we call them, the people that initiate the tribes sharing their story. And just like, you know, my brothers and I forming and funding an investor tribe, you know, those many years ago, it unlocked a future we could have never dreamed of we were we invested and did things we could have never done on our own. And that's the that's the story that you hear from these other tribes, how they were enabled by tribe best. And again, it's not about tribe best, we're just, we're just a helpful tool. And then they're the ones that are coming up with their their dream, their ambition, and answer your question, a lot of short term rentals. You know, buying vacation homes, they want to be able to share that space together. But they also want to make it a cash flowing asset. And tons of tribes are doing that successfully. A lot of tribes investing passively into real estate syndications. Big popular simple application for us, right, not a lot of moving parts, you just come together, we'll manage the cap table, all the legal tees, making it really easy to put your capital contributions wire the money to the syndicate. And, and so that's a really nice application and very popular one.
People are investing in startups. In fact, you might see we just raised a few million dollars in we were venture, we're venture backed startup. But you know, we also open it up to tribes, and a lot of our investors form tribes to invest into a startup, in our case, tribe best, but we're seeing that in a lot of other different startups as well. Crypto, you know, you wouldn't with all the different ways to invest in crypto, you don't need a lot of money to get in. But when we talk to our crypto tribe members, they'll tell you, you know, I wouldn't ever do it on my own, because I don't understand it. But that's why I'm investing in my tribe, because it's fun, I spread the risk, I don't have to put that much in, and I'm learning about it along the way. And, and so those, those deals really stand out. And then there's a lot of communities like women communities, the flip stress comes to mind. And you know, that, you know, group of women that are coming together to do flips is another very popular application for us.
So anyway, we're just, you know, we feel, you know, privileged, and we didn't feel a big responsibility to get the word out and to continue to pay it forward. Because you're right, you know, what we've built is the platform we wished we had, you know, we made every mistake you could do we were like you like, like, we we almost didn't move forward. We almost didn't press on, we're like, is this worth it? Fortunately, we persevered. But when people started asking us, Hey, can you help us form a tribe to we thought, Oh, my God, what would we do differently? And the answer was everything. Maybe that's the best way to know what you know how to build a platform. Just do everything that you know, we wished we wouldn't have done.
Mike Stohler
Exactly. Now let's get down to everybody is if you haven't figured out probably it's tribe vest.com t r i v e, v e s t as invest. So let's talk about what it takes. As far as what do you have like a one time startup fees do you have a monthly Do you have packages? You know, it goes to try vest and then wants to buy a short term rental with four or five of their buddies or girlfriends. How can they do it? Once they hit tried? vest.com
Travis Smith
Yeah, we're bringing out some new exciting pricing, which we're really excited about that will be published by the time this this show goes live. And it's it's $29 You know, A month to launch your tribe. And in you know, in manage everything that we've just kind of talked about, you know, that dashboard, the banking, full service banking, everything you need to be able to pull your funds formula formalized pull your funds and transact as an entity and keep track of everything. It's $29 a month if billed annually, and $39 a month, if month to month.
Mike Stohler
That's perfect. I mean, and if that doesn't break the bank, you know, you look at some of the portals that we use, it was like, you know, 1000s and 1000s of dollars a year. To do some of the stuff that we do is you know, for like syndications and things like that. So everybody that is a great, fantastic deal to do everything that it does. Man, I wish, I wish our portals were that cheap, and expensive, not cheap, inexpensive, I should say that.
Travis Smith
Yeah. Now, you know, and as you know, you're getting to a different level of sophistication with sinister high service, high touch, and therefore expensive mic as I as I know, as well. And a little bit of the the beauty and the magic of tribe bass is just how simple we've made it. And, and we're really going for scale, like we want everybody to be doing group investing. And if we continue to grow at the trajectory that we're growing, this business model makes a lot of sense for us. So we don't have to make a lot of money on each tribe, we just need each tribe to tell their body about it, or go, you know, as a member of a tribe going to start another tribe with new and additional circle of friends. So that's our business model. And it's definitely different when you don't have we don't charge for any transactions. Everything's Included in there. You know, everything's included, the banking, the formation, everything, we do not cover the state fees to file the LLC. Because every state's a little different. But in terms of processing, and managing that we that's that is included.
Mike Stohler
Yeah, perfect. How, in the other way that our listeners can find you other than tribevest.com
Travis Smith
Yeah, we went. So, Mike, we would like to put together a special offer for your listeners. And I don't have that URL right now. But if you can include it in the show notes, will give them $100 deposit into their bank account, once they've you know, started their tribe. And that's as a result of being you know, part of your your listening base and community.
Mike Stohler
Perfect. Well, thank you very much. Hear that everyone. If you've ever thought about investing with your friends, don't do it on your own. Believe me, I did on my own screwed up. This is the perfect way to kind of alleviate some anxiety, the fears, you know, in my doing this properly. This is the try vest is the perfect way that all of you can finally get going with some type of certainty that you're not screwing it up. Well, Travis, I appreciate you coming on and telling us about tribe vest. I really think that this is something that I know it's something that everyone's needed, especially those people that just don't really know how or where to start. I appreciate you coming on.
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ABOUT TRAVIS SMITH
Tribevest was founded by Travis Smith to solve a significant problem in investing. He and his brothers realized that if they were going to change their family’s financial trajectory, they’d need to work together. They wanted to invest as a group, but Travis quickly discovered it required a complicated path of lawyers, paperwork, banking regulations, and hundreds of hours. He knew there had to be a better way. Enter Tribevest.
Before building Tribevest, Travis was a top financial advisor at Morgan Stanley. Armed with his wealth management training, he became a thought leader in the FinTech industry focused on digital payments. He led the Strategic Alliance team at Jack Henry & Assoc., a multi-billion dollar FinTech company and core software for thousands of banks.
Through these experiences, he discovered it was exponentially more fun to disrupt the reigning wealth management institutions than to be part of them. Through Tribevest, Travis seeks to empower everyday people through accessible group investing.