The LRF Thoroughbred Fund, LLC offering is now closed and is no longer accepting investments.

LRF Thoroughbred Fund, LLC

LRF Thoroughbred Fund (“Company”) provides the opportunity to own a thoroughbred racehorse inside a partnership managed by Little Red Feather Racing.

Small OPO
Woodland Hills, CA
Sports
US Investors Only
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For the first time in thoroughbred racing history, the Little Red Feather Racing Club will create a Racing Partnership through crowdfunding equity under the new Title III laws. 

The LRF Thoroughbred Fund (“Fund”) provides the opportunity for anyone to pursue racehorse ownership! 

The Fund will be managed by one of America’s largest thoroughbred racing clubs – Little Red Feather Racing (“LRF”). LRF burst onto the national scene in 2004 when its horse Singletary captured the $1,500,000 Breeders’ Cup Mile. In 15 years, LRF horses have won 192 races from 1,063 starts (18%) and grossed $10,735,470 in purses (through June 30, 2016).

Recently, LRF has enjoyed the best 18 months in its history with 43 wins from 192 starts and over $3,000,000 in gross purses. LRF currently manages stakes winners Midnight Storm, Chati’s on Top, Bellamentary, Sheer Pleasure, and Midnight Miley.


 To crowdfund the first ever thoroughbred racing partnership where the participant receives real equity in each racehorse.  


LRF will manage the Fund and use the final raise to buy up to six (6) thoroughbred racehorses with the intent of racing at Santa Anita Park and Del Mar. Each investor will own a pro-rata percentage of the Fund.  

Here’s an Example:

If the Fund raises $100,000:

LRF will use the proceeds to purchase up to three racehorses (and more if the final raise is higher).  LRF will also set aside a suitable reserve to pay expenses and operational costs. LRF will purchase the racehorses through traditional industry means. For example, the horses will be purchased:

  • At public auction

  • Via a claiming race; or 

  • Through a private purchase.

With 15 years experience, LRF has the industry networking ability to purchase almost any racehorse that is for sale. 

Once purchased, the horses will be trained by one of LRF’s trainers and prepare for its first race for the Fund. Investors will be kept intimately abreast of the racing careers of the Fund horses. The hallmark of LRF is its ability to communicate the horse’s journey with its investors. This “inside the locker room” communication provides a wealth of knowledge to both people new to ownership and those that have owned before.

LRF will also provide an accounting summary of all activity and, if applicable, make a distribution of available proceeds to the investors.

The Fund initially plans to dissolve by December 31, 2017.  However, if the Fund is financially viable, LRF, at its election, may continue the fund into 2018 and beyond.



Owning a thoroughbred in the “Sport of Kings” is like an admission to an exclusive club. Besides the pro-rata equity in the Fund, we hope (but not guaranteed) to provide investors will the following perks:

Level 3

$10,000+

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The LRF Partner Package

This is similar to the traditional LRF partner who receives an “all-access” pass into the world of thoroughbred horse racing. 

• Equity in the fund equal to your investment divided by total raise. 

• Possible opportunity to apply for a California Owner’s License. 

• Visit Fund Horses at the barn. • Invitation to watch morning workouts. 

• Box Seats to all Fund races. 

• Part of Democratic Process of Naming the Horse. 

• Join other partners in the Paddock and Winners’ Circle (we will mail you the photo!). 

• Full LRF Concierge services (eg. access to purchase 2017 Kentucky Derby tickets).

• Participate in a monthly conference call to discuss the Fund’s horses. 

• Access to box seats for most races. 

• LRF T-Shirt and Hat.

• Detailed emails regarding each horse’s journey, including notification of entries and results. 

• Opportunity to purchase winner circle photos of your horses directly from the racetrack.

• Invite to Meet Your Horse’s Day at Santa Anita/Photo with your horses.

• Access to purchase Fund apparel.

* Behind the scenes welcome tour at Santa Anita Park (eg visiting starting gate at race time; silks room; watch track announcer call a race).

* Santa Anita Park Wagering ambassador assigned to act as new owner liaison.

* Priority access for clubhouse seating / reservations / food beverage specials at Santa Anita Park.

Level 2

$2,500-$9,999

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The Fun Package

For those new to the sport who just want to dip their toes in to see if this really is “the most exciting investment you will ever make”.

  • Equity in the fund equal to your investment divided by totall raise. 
  • Participate in a monthly conference call to discuss the Fund’s horses. 
  • Access to box seats for most races.
  • LRF T-Shirt and Hat.
  • Detailed emails regarding each horse’s journey, including notification of entries and results.
  • Opportunity to purchase winner circle photos of your horses directly from the racetrack.
  • Invite to Meet Your Horse’s Day at Santa Anita/Photo with your horses. 
  • Access to purchase Fund apparel.
  • Behind the scenes welcome tour at Santa Anita Park (eg visiting starting gate at race time; silks room; watch track announcer call a race).
  • Santa Anita Park Wagering ambassador assigned to act as new owner liaison.
  • Priority access for clubhouse seating / reservations / food beverage specials at Santa Anita Park.

Level 1

$500 - $2,499

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The Crowdfunding Package

For the casual fan who wants an inside the locker room look at the world of horse racing:

  • Equity in the fund equal to your investment divided by total raise. 
  • Detailed emails regarding each horse’s journey, including notification of entries and results. 
  • Opportunity to purchase winner circle photos of your horses directly from the racetrack. 
  • Invite to Meet Your Horse’s Day at Santa Anita/Photo with your horses. 
  • Access to purchase Fund apparel.
  • Behind the scenes welcome tour at Santa Anita Park (eg visiting starting gate at race time; silks room; watch track announcer call a race).
  • Santa Anita Park Wagering ambassador assigned to act as new owner liaison.
  • Priority access for clubhouse seating / reservations / food beverage specials at Santa Anita Park.


The gross proceeds of the Offering to the Company will be $100,000 if the Minimum Offering Amount is raised and $1,000,000 is the Maximum Offering Amount is raised. The net proceeds of the Offering, after deduction of expenses of the Offering, including but not limited to the intermediary’s fees, escrow fees, legal fees, accounting fees and management fees will be used by the Company as working capital to purchase, and maintain thoroughbred racehorses for racing at Santa Anita Park, Del Mar and other top racetracks.  The following table lists the estimated use of proceeds of the Offering if the Minimum Offering Amount and the Maximum Offering Amount are raised.

 


The estimated use of proceeds set forth below illustrate the present expectation of the Company. LRF Thoroughbred Fund, LLC will have discretion to alter the use of proceeds as set forth below as Company determines how to best accomplish its objectives.




  • Established in 2002. 

  • California’s largest Racing Club, with over 300 active partners. 

  • Over 50% of LRF syndicates are made up of previous partners. 

  • Captured the GI Breeders’ Cup Mile with Singletary in 2004. 

  • Sold GI winner Egg Drop for $1,900,000 at 2014 Keeneland November sale. 

  • LRF Horses have finished in the money in 36 Stakes races including wins in the: Breeders’ Cup Mile (G1); Matriarch (G1); Shoemaker Mile (G1); Oak Tree Mile (G2); Arcadia Handicap (G2); Yellow Ribbon (G2); Goldikova (G2); La Jolla Handicap (G2); Honeymoon (G2); Senorita (G3); SF Breeders’ Cup Mile (G3); Irish O’Brien; Solana Beach; Thunder Road; Academy Road; Mademoiselle; Dream of Summer, and the Time to Leave Stakes. 

Offering Size: Minimum $100,000; Maximum $1,000,000

Manager: Little Red Feather Racing Management

Min Investment: $500

Subscriptions Closed: December 1, 2016

Fees: 10% initial raise; 10% gross purses or revenue received; 10% subsequent asset sales fee.

Term: Manager will wind-up and liquidate the Fund as soon as practical, but preferably by the end of 2017.

Targeted Return: $0 - $1,000

Reports Annual: K-1

Main Rules: Once an asset is sold or purse monies are earned, funds will be distributed to Fund partners and/or used to acquire additional horses. On or around December 1, 2017, Manager will determine which horses will be sold or kept in racing.




Are there any other management fees or additional compensation paid to the manager?

LRF Thoroughbred Fund, LLC will pay the manager LRF’s standard 10%/ 10%/ 10% fee:

  • 10% of the initial raise

  • 10% of all gross purses earned by the racehorses

  • 10% “off the top” of the sale of any racehorse. 


How much does it cost the investor per month in expenses? 

Nothing. 

LRF Thoroughbred Fund, LLC will build in a suitable reserve for each racehorse to pay training and operational costs for a dedicated period.  In the event the racehorses do not earn enough to maintain future expenses, the manager has the authority to raise funds by issuing new shares (and diluting current members) to pay further expenses and operational costs. A typical horse costs $50,000 per year in expenses.



Can I make money?

Of course.  

Seriously? 

This is a high risk high reward investment. LRF sold a horse at auction for $1,900,000 that originally cost its partners $95,000.  LRF has also purchased a horse that unfortunately never ran.  With over 150 horses managed the only honest thing we can tell you is your investment will probably fall in between those two scenarios… and you may have the time of your life regardless of the ultimate financial result.


How does the Fund Earn Revenue? 

Two ways.  

  1. Earning purse money by finishing in the top five of a race*; or 

  2. Being sold (hopefully as a stallion or broodmare).  

All purses will be deposited into the Fund bank account and used to pay Fund expenses.

* The breakdown of a purse can be different for each race (and placing in the race). Typically, for a horse that wins a race, the owner will net 48% from the purse. For example, if your horse wins a $100,000 race, the net proceeds to the owner is $48,000.


What race tracks will you run at?

LRF Thoroughbred Fund, LLC horses will likely initially only race in California at Santa Anita Park or Del Mar. Notwithstanding, your horses may run in Kentucky, New York, Florida and other circuits.  



How often and what kind of information will I receive about my racehorse? 

As mentioned earlier, if you are kept in the dark about what is going on with your horse, how can you enjoy the journey? 

Communication is key to a successful ownership experience.

LRF Thoroughbred Club, LLC will email (as often as daily or weekly) pertinent information about the Fund horses and partnership.   The hallmark of LRF is its ability to communicate the events of each horse’s career with its partners.


What if my Horse Gets Hurt? 

Each horse will carry standard equine mortality insurance. Most, if not all, injuries in thoroughbred horse racing that occur do not result in death or cost the owner an amount over $5,000 in added veterinarian expenses. Career ending injuries do happen. However, in most instances the injury only prevents the horse from competing as a thoroughbred racehorse. Many horses go on to second careers as a broodmare or hunter/jumper etc. The manager has extensive experience trying to palce retired horses where they can maintain secondary careers. 


Will I Receive Financial Statements?  

Of course.  The Fund will provide regulatory accounting statements as well as informal income/expense reports showing detailed transactions the Fund.  

   

Offering Summary

OUR SECURITIES

Our authorized capital stock (ie “Units”) consists of 2,000 LLC Units.  The following is a summary of the rights of our capital Units as provided in our Limited Liability Company Operating Agreement which has been filed as exhibits to the offering statement of which this offering circular is a part.

Minimum Offering: $100,000

Minimum Purchase: One Unit of Interest

Offering Price: $500 per Unit

Maximum Offering: $1,000,000

Sale Commission: 0%

Proceeds to the Company:  up to $1,000,000

 

UNITS

Voting Rights. The Unit holders aka Members shall not have the right individually to take part in the management or control of the business of the LLC, nor transact any business in the name of the LLC. All management and control of the business will be exercised through the LLC's manager.

Distributions. Available Cash Flow of the LLC shall be distributed to the Members, as and when determined appropriate by the Manager, subject to certain priorities as described in the Limited Liability Company Operating Agreement.

Liquidation Rights. In the event of our liquidation, dissolution or winding up, Unit holders are entitled to share ratably in all of our assets remaining after payment of liabilities.


MANAGEMENT 

The manager will manage and conduct the day-to-day affairs of the LLC and will have the ultimate authority affecting the interests of the LLC. The manager may be removed only by a Supermajority in the interest of the members (i.e. members holding more than 75% of the outstanding units). The Manager will be compensated as described in the Limited Liability Company Operating Agreement.

Absence of Other Rights or Assessments. Unit holders have no preferential, preemptive, conversion or exchange rights. There are no redemption or sinking fund provisions applicable. When issued in accordance with the operating agreement and California state law, Units will be fully paid and liable to further calls or assessment by us. Notwithstanding the previous sentence, if Cash Flow dictates the need for additional funding, the issuance of additional Units may occur, which will dilute each Members proportionate interest.


RESTRICTIONS ON TRANSFER

The securities being offered may not be transferred or resold for one year by any purchaser of such securities; unless such securities are transferred:

  • to the LLC;
  • to an accredited investor;
  • as part of an offering registered with the SEC; or
  • to certain members of the family of the purchaser, to a trust controlled by the purchaser, to a trust created for the benefit of a member of the family of the purchaser or the equivalent, or in connection with the death or divorce of the purchaser. 

Practically, it may be difficult to resell or transfer units even after the one-year restricted period ends if there has been no active trading market developed.

 

The Company will not incur any irregular use of proceeds.


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Most recent fiscal year-end:
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Short Term Debt
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Long Term Debt
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Revenues And Sales
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Costs Of Goods Sold
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Taxes Paid
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Risks

A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment. In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document. The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature. These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.


Updates

Commencement Update

10 months ago

Partners,

We still have not received the official go ahead from Startengine. 

Being new to this ourselves we apologize for not being better at understanding the protocol to when escrow delivers the funds and names and emails to us.

I am told there are no hiccups and it is just a matter of time for the proper papers to be filed.

I am hopeful we will have everything by the end of 2016. Behind the scenes we are actively looking for our first horse. 

If anyone has any questions, please feel free to reach out to us.

Gary Fenton 

gary@littleredfeather.com

Billy Koch

billy@littleredfeather.com

Closed!

11 months ago

Partners:

We are officially closed!  Thanks so much for your patience. When we get the partner list from Startengine we will send out an official welcome email to everyone.  And as soon as we receive funds from the escrow company (we're told within 10 business days) we will get going!  Very excited to get started.  We're already on the look out for our first horse.

Gary Fenton

Extending the Deadline to November 30, 2016

about 1 year ago

LRF Thoroughbred Fund (“LRFT”) Update

We have two important announcements: 

  1. Santa Anita Park has become a marketing partner of LRFT 

  2. We are extending our offering deadline to November 30, 2016 (which requires the reconfirmation of each investment).

With Santa Anita Park as a new marketing partner, we felt it was appropriate to give owners and new fans more time to invest in the exciting new equity crowdfunding venture with Little Red Feather. The partnership with Santa Anita will not only add to the perks for each level of investment, but it will also give LRFT investors more support on race day and throughout 2017.  Being an owner in the Sport of Kings is exciting and with Santa Anita’s excellent crew involved, our hope is that all investors will feel like real owners.

What this means for our current investors:

Because we are adding to our investor perks and extending our deadline we are filing an amendment of our offering terms with the SEC. This is what is known as a material change and by law requires each investor to reconfirm their investment within 5 days. If investors do not reconfirm before the deadline, their investment will be canceled and the withdrawn funds will be refunded.

How to reconfirm your investment:

Within the next 24 hours, each investor will receive an email from FundAmerica Securities with a secure link allowing investors to re-confirm their investment. 

If you have any questions about the process or any trouble reconfirming your investment, please reach out to contact@startengine.com or call 800-317-2200 between the hours of 9:00am - 5:00pm Monday through Friday PST. 

Best regards,

Gary Fenton

We Did it! $100k Goal Reached

about 1 year ago

Dear Crowdfunders,

We reached our $100k goal! We have now officially equity crowdfunded the first racehorses in history.

THANK YOU!

So, what now?

Per the SEC rules, I cannot email you directly - yet -until we officially close October 1, 2016.  

On or around October 1st, we will send a more formal welcome email.  AND OFFICIALLY COMMENCE THE PARTNERSHIP AND START LOOKING FOR HORSES!

Until then, sit tight. And tell your friends. The more we raise, the more horses we can buy.

Thank you again for being part of this historic journey. 

Gary Fenton 

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