I am trying something kind of cool. I am attempting to fund an escort service by using fundable.com. Fundable is like prosper, instead of people to people lending this is people to people investing.Basically a person can own part of an escort agency for as little as $100. My question is concerning can anyone see any problems that could crop up as far as the security laws? I plan to file for a corp. after investors have pledged the funds. You can get a better understanding for what I'm attempting by checking my link.

Thanks.

Stick with mutual funds.

(still not a lawyer, or a stock broker)

Let's not forget a possible RICO violation.

-- Modified on 4/29/2008 9:19:53 PM

Owning part of an escort agency is a disaster waiting to happen.  How many people are you going to get to put in $100 bucks.  If you capitalize it with $100,000, you have 1,000 investors.  Sending them their regular statements will cost a few thousand dollars a year in just postage.  The 1,000 investors will have the right to inspect books. You have to make accountings.

YOu also have filing fees, renewal fees every year, reporting requirments, seperate tax filings, withholding, worker's comp.  

And let's get real - If you are talking about "escort services" like the famed Emperors' Club, you are talking about legal nightmares that you don't want your investors demanding explanations from the Board of Directors, who all have to be public.

What do your investors get: A cut of the profits - like you want the details the companies income made public. Or offer your investors a chance to get laid.  That would look good in the mandatory business offering you have to file.

Good luck.

Are you talking Rico like in the case of the DC madam or are you thinking Rico in terms of other people conspiring to commit a crime because they invested and that makes them accomplices? If you are thinking the latter, wouldn't that make people who invested in Enron criminals?