Empower Your Small Business with Access to Immediate Working Capital
ClusterFunds create a community to aid business owners in troubleshooting problems, vetting ideas, identifying blind spots, and creating access to working capital with no agenda but to help each other succeed.
Benefits for Members
Access to Working Capital
Fund provides small businesses with working capital to fund day-to-day operations. By pooling working capital, ClusterFund members dramatically reduce operational risk together.
Professional Advice
Clusters often include access to financial advisors, CPAs, and attorneys who provide tailored guidance to help member businesses navigate financial management, strategic planning, and exit planning.
Networking and Collaboration
Members can participate in recurring facilitated meetings to vet ideas, troubleshoot challenges, and find solutions together.
Members Earn Interest
Cluster members and co-investors earn interest and other fees on each transaction. Most of these fees stay "in-house," so the cluster members earn interest on their own and other cluster members' working capital transactions rather than being earned by alternative third-party lenders.
Frequently Asked Questions
Common questions answered.
What is a ClusterFund?
ClusterFunds are private lending funds designed to provide structured investment opportunities. They offer short-term loans and invoice factoring to small businesses that are members of the fund.
How does a ClusterFund work?
The fund pools capital from investors (Class B Members) and lends it to business owners (Class A members). Investors provide funding in exchange for potential returns, while the fund manager oversees lending decisions and fund deployment.
Who can participate in a ClusterFund?
There are two types of participants. Class A Members are small business owners who seek working capital through short-term loans. Class B Members are supporters of those small business owners who invest capital passively in exchange for potential returns.
How can my business obtain a loan in a ClusterFund?
To qualify, a business must become a Class A Member by purchasing Class A Units. Members are also required to introduce one potential investor. Members can then apply for short-term loans or invoice factoring agreements per an Operating Agreement.
What are the loan terms?
Loan amounts vary depending on approval requirements and available funds. Interest rates and repayment schedules are set based on predefined terms in the Operating Agreement by the Members themselves. Loan maturity periods are typically less than 90 days.
What happens if my business is unable to repay the loan?
Loan defaults could impact your business' standing in the fund and ability to access future financing. The fund manager enforces repayment terms as outlined in the loan agreement. By being an investor yourself, a default will impact your own return on investment in the ClusterFund and that of your fellow business owners and investors.
Is my investment liquid?
No, ClusterFund units are not publicly traded and have limited transferability.
How long do I need to commit my funds?
Both Class A and Class B Members are subject to a three-year lock-up period before they can request redemption of their investment.
Is this a regulated investment?
Class A and Class B units of the ClusterFund are private placement securities sold under the Reg D Rule 506(b) exemption.
Why does the Cluster focus on invoice factoring and short-term loans?
Running out of cash is the second most common reason small businesses fail, with the lack of market demand being the first. Utilizing invoice factoring and having readily available short-term loans can greatly reduce the risk of cash flow shortages leading to business failure.
Do I have voting rights as a business owner?
Yes, Class A Members have voting rights on fund governance and operational decisions.
Can I sell my ownership in ClusterFund?
Class A Members cannot transfer their units for the first three years. After three years, members may request redemption, subject to financial conditions and manager approval.
Are there restrictions on how I use loan funds?
Yes, funds are meant to support working capital needs through short-term financing and invoice factoring.
How do I invest?
Investments are made through Folla Capital, LLC, an SEC-registered broker-dealer, where investors can review all documentation, complete an investment questionnaire and sign a Subscription Agreement. The documents include a Private Placement Memorandum, which provides important disclosures and detailed risk information regarding an investment in the ClusterFund offering.
Contact Us
3722 Shipyard Boulevard, Suite E, Wilmington, NC 28403
Folla Consulting Services LLC (“Folla Consulting Services”) is a consulting and technology services firm affiliated with Folla Capital, LLC. Folla Consulting Services is not a registered broker-dealer. This website is operated by Folla Consulting Services. Certain sections of the website may be used by Folla Capital, LLC, an SEC-registered broker-dealer and member of FINRA, to conduct securities offerings. Any capital raised by any ClusterFund is offered exclusively through Folla Capital, LLC. Neither Folla Consulting Services nor Folla Capital, LLC provides investment advice or makes investment recommendations; nothing on this website should be construed as such.
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