The Grassroots Investment Group LLC (GRIG): A Case Study
GRIG is a typical example of a successful African American investment club. Founded in 1997, as a general partnership, it evolved into Limited Liability Corporation by the end of 2002. This enabled it to pay dividends to members every quarter. According to its founder, Philippe Tatem, GRIG was born when a group of black venture capitalists came together to pull their resources. It is interesting to see the array of individuals that make up GRIG come from all types of occupations. GRIG people were engineers, technology professionals, business owners, bankers, and salespeople, while others were law students.
The club has five distinct operating teams, where each team sources for cash-generating opportunities with equity ownership, then gives a report back to the general membership. A member of the management team sits on each group for oversight. This structure saves time and makes the system more efficient. GRIG has survived through turbulent times in a volatile market that saw its portfolio assets plummet from $200,000 to $118,000 in the year 2000, which lead to a recession.
The club recovered, reorganized, re-strategized, and reinvested applying the lessons learned. GRIG investments today cover real estate, equities, and business operations such as car wash franchise. This experience led the investment club to a 22% return in 2004, and as of 2006, GRIG had 39 members spread all across 10 states in the U.S. along with some representation in Korea. New members make an initial contribution of $10,000 to the club. Then an additional amount of $10,000 is paid over a 15-month period, plus monthly dues of $175 each.
GRIG is now a success story, as the organization’s assets value grew from $118,000 in 2000 to $1.3 million in 2005.