When investing into a search fund deal, are there any real advantages to forming a SMLLC to invest through?

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May 05, 2025

by an investor from Florida State University in Atlanta, GA, USA

I am a newbie search fund investor. Is it worth setting up an LLC (or other legal entity) to invest through? Does it provide enough advantages to be worth the filing fees / compliance costs?
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Reply by an investor
in Asheville, NC, USA
The only advantages of investing through a single-member LLC are: 1) Organization. All funds in and out can be tracked for simplification. 2) Privacy, so your name is not on the cap table. Single member LLC’s are pass-through, so if you invest via the LLC, then you’ll still have to put your SSN on the w9 alongside your LLC name. I choose to do it, as it’s not that much hassle.
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Reply by an admin
from Massachusetts Institute of Technology in Portland, OR, USA
^redacted might be able to comment here.
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