You are approached by a dear friend who says, “I have a terrific business concept—diamond mining in Siberia. Just a pickaxe, divining rod, and some elbow grease. It’s going to be terrific. The problem is, I need a little bit of cash to get it off the ground. Any interest? I can offer you a share of the company.” Although you know little about Siberia or investing, you decide to invest. He sends you a sixty-five-page LLC operating agreement for Sub-Zero Mining, LLC (“it’s mostly boilerplate”), which you review briefly and sign. You send it back to him, along with a check for your investment.
Six months later, having heard nothing from your friend, you run into him, and he is driving a brand-new sports car. You ask him, “How did the mining in Siberia go?”
“It was terrific,” your friend explains. “I have more money than I know what to do with!”
Naturally, you ask for your share.