Your Net Worth
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Exhibit II
Fee Schedules:
The following are the fee schedules charged by Centimillionaire Advisors, LLC for services provided. Fee schedules are based on the Client being fully accredited and/or qualified as by defined by the Securities Act of 1933 Rule 506(b) of Regulation D and information provided by Client on the Investment Policy Statement attached.
Schedule for Qualified/Accredited Investors: This fee schedule is for anyone worth over $2.2M net worth outside of your primary residence, we will not transact or advise anyone with under a $2.2M net worth.
CA LLC is only compensated on the capital gains realized at the time of sale of the asset or exit of the fund or investment vehicle. There is no account minimum for any of CA LLC’s services, but clients must have a minimum $2.2M net worth.
Performance-Based Fees: Qualified clients will pay a 5-20% performance fee (10% is most common) based on distributions & capital appreciation which is calculated at the time of sale of the asset or exit from the fund as discussed elsewhere in this agreement. If the client’s asset/investment rises in value (as determined at the time of the sale of the asset or exit from the fund), the client will pay 5-20% performance fee (10% is typical) on that increase in value at the time of sale. If the client does multiple investments with us and one was to lose money, we cannot charge the client performance fees on any other investments through us until we have net made them a positive return, so we are making money together. This creates alignment and reduces the motivation an investment firm would have to show very risky deals to clients, as one bad deal could wipe out all of the performance fees on other good deals. This is over the lifetime of the account, so a loss in 2019 would carry over and have to be netted out by gains in 2020 and future years before CA LLC could be paid a performance fee.
We do not invest in startups, seed capital rounds, angel investments, international deals, cryptocurrency, blockchain, venture capital, or anything else which we deem to be moderate-high or high risk, or anything which could likely have a binary great or drop to $0 value event to it.
Any investments made due to the referral of a deal, sourcing of a deal, or introduction to an individual who then refers a deal to Client will fall under this investment advisory agreement and be subject to a % performance fee.
Any investments Client engages on or commits to without the negotiation assistance, explicit approval in writing of a niche-scoped area of investment, or direct referral from CA LLC will not be subject to a performance fee. Any gray area on this matter will be stated in writing via email so both parties are clear on what is covered and not via this agreement and written emails between the two parties. As possible CA LLC will attempt to reduce fees paid on investments negotiated by 5-10% to add additional value and pay for the cost of this engagement, in some cases 5-10%+ reduction in fees may be possible and in some cases no concessions will be given. CA LLC will send an invoice for performance-based fees directly to Client on a quarterly basis to be paid by bank transfer within 15 days of receipt. By signing below, Client agrees to the performance-based fee of 10%. While no management fee structures can align parties, and add alignment long-term in some ways, client should be aware that investment advisers can be seen to potentially have an incentive to invest in riskier investments when paid a performance-based fee due to the higher risk/higher reward attributes.
Please Note: If you are not an accredited investor we can still help you identify a wealth advisor, help with proactive tax planning, estate/trust planning, etc.
If you are signing this agreement on behalf of your parents or as a representative of a private equity firm, institutional investor, or wealth management firm please let us know upon execution so we can amend the agreement as needed.
To avoid any confusion for anyone raising capital, this is not an agreement to engage us in raising capital in any way, we do not do investment banking or placement agent work. Also, as mentioned above, fees for CA LLC do not incur until Client has entered into an investment they have sourced through CA LLC. This agreement serves as a pre-agreed to term sheet for if or when you as a client may decide in the future to invest in a direct investment through our RIA.