club_cafe: New member payment

iras1 on

The simple answer is... you can't.

Here's the longer version. The unit valuation method accounts for the changes in value of each of your investments and member contributions. In order for someone to get "caught up", he would have had to contribute the same money at the same time as the other partners. So, you are left with one of three possibilities.

(1) If the other partners all have the same number of shares and $ invested, the new partner can contribute enough $ to match the $ invested by the original partners. However, these new dollars will buy units at whatever the unit value is at the date the $ are contributed. The new partner will have more or fewer units than the original partners.

(2) The new partner can contribute enough $ at the then current unit value to purchase the same number of units as the original partners. The $ contributed will be more or less than the $ contributed by the original partners.

(3) The new partner and old partners can realize that there is no advantage to trying to even things out. The new partner will contribute as much money as he feels comfortable contributing and will receive whatever number of units that money will purchase. The accounting software will take care of the rest.

Ira Smilovitz

In a message dated 12/16/02 12:52:03 PM Eastern Standard Time, icecold@bivio.com writes:

We have a new partner that would like to, once his 3 month
probationary period is over, make a payment to get caught up
fully to the amounts of the original partners. How do I
value the club (and at what point) in order to get an amount
that he would have to pay in order to become full status,
yet not exceed our per partner maximum %? Thanks.

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