It’s lime a mutual funds but if you are going to do this with your friends, better not to because conflicts might happen especially if someones wants to get his money back instantly.
Collecting of funds and investing it is already happening with the stock market and it is being handle by the professionals so you can have more confidence with your funds. It may look higher since the capital is big, but with the trust issues, I think I will not go for this.
Many people are saying about trust issues but I think I read somewhere in OP where they said that a written agreement should be done and legalised. If such agreement exists, there won't be ground for misunderstanding.
Crowd funding and group investment is a key, I will like to try this with my friends but I don't know how they will feel about it. There is power in joint efforts. I have seen people do that in Real Estate and it worked perfectly well.
When we are making decisions on this kind of instance, we need to focus on both the present and the future consequences of taking such decision in working together with people, not everyone likes a joint or partnership investment because the later end will always looks shady amidst the fellow investors and everyone finally partways, anything that has to do with money must be on a sole proprietor business ownership and not joint task, but there are situation whereby some business could actually requires such, we can take the risk in starting even though the relationship with them in doing business together may not last, joint effort is discouraged in some situations and some settings awesomely welcomes such an idea.