To the OP, Watch out for state laws. Even though you fall under a federal exemption that doesn't mean the state will let you slide. In my state, even an IB f&f account required that I pass the 65 and setup an RIA. At that time I was also trading mostly index ops, but also some equity ops. In any case, passing the 65 or the 3 is a simple task. Should take about 2 weeks of regular study and something like $75. If passing either of these exams is a chore then a person really isn't intelligent enough to consistently trade for a profit. I only suggest the above route because you suggested that your situation is: -about 10 friends -less than $500K -no fees charged other than costs Also, those investors must be residents of your state. If all those apply, you are federally exempt, but might still need state registration depending on location.
Thank you. I am located in NJ and I think most of the future investors will be from NJ first. Probably will include CA in later phrases.