Key Takeaways:
- Successful syndicators consistently build and expand their investor and professional networks, not just when they need capital.
- Deal flow must be continuous, because investors lose interest quickly if there is no next opportunity.
- Over-reliance on a single large investor creates fragility, even if that investor has supported prior deals.
- Liquidity is essential for growth, especially to cover marketing, deposits, and gaps between deals.
- Long-term success comes from marketing yourself as a syndicator, not just marketing individual offerings.
Transcript
How to Avoid Rookie Mistakes in Syndication
If you’re new to syndication or running a private equity fund, wouldn’t it be nice to bypass those rookie mistakes so that you don’t have to make them in putting together your syndication or equity fund? My name is Tilden Moschetti. I’m a syndication attorney with the Moschetti Syndication Law Group, and I’m going to go through those rookie mistakes that I often see, things that are easily fixable, and give you the tools to succeed quickly.
Common Mistakes New Syndicators Repeatedly Make
If you’re new to syndication or private equity funds, there are some mistakes that obviously get made time and time again. They’ve been made by the people before you and they’ll be made by the people after you, those people trying to raise money, buy assets, and invest with other people’s money. These are not necessarily mistakes on one particular deal, but mistakes made on the entire process of going from that first deal all the way down three years from now and growing into that large fund or that massive serial syndicator.
Why Mindset and Process Matter More Than Any One Deal
The way we think about things is really the keys to the kingdom. If we can fix these little errors and think about things a little bit differently, it’ll launch your career and your progression to that three-year mark much more smoothly. I have five key points that I want to convey that will help you make that transition from new to very experienced and very successful.
Rookie Mistake #1: Failing to Build Your Book of Business
The first one is building your book. There are two things that every investor or syndicator must do. First off, you’ve got to always, always, always be adding investors. Always be thinking about adding investors, talking to your current investors, and building your book of investors.
Not only that, but you also need to always be thinking about building your book of other allied professionals that can help you—brokers, loan brokers, finance professionals, marketing people, and attorneys. That Rolodex must constantly grow.
Rookie Mistake #2: Not Continuously Looking for Deals
Number two is always be looking for deals. If you are doing real estate syndication, brokers are part of your business ecosystem, but don’t spend all your time talking to brokers alone. Brokers are rarely investors, but they are essential sources of deal flow.
Even if you already have a project underway, you must always be looking for the next deal. If you bring in a new investor and have nothing to offer for a year, that investor is gone. Constant deal sourcing is critical.
Rookie Mistake #3: Relying Too Heavily on One Investor
Number three is relying too much on just one or two investors. Having a key investor is fine—but counting on them is dangerous. No one owns an investor. Even family members are not guaranteed to invest in your next deal.
If that one investor leaves, momentum can collapse instantly. Diversifying your investor base protects your business.
Rookie Mistake #4: Ignoring Liquidity Needs
Number four is always be thinking about your liquidity. You need cash reserves to get from deal to deal, especially if you are marketing under Regulation D Rule 506(c). Marketing is expensive.
You also need to make money on your deals along the way. If all your compensation is deferred to the end of the deal, how will you fund deposits, marketing, and operations for the next opportunity? Liquidity keeps the machine running.
Rookie Mistake #5: Not Actively Growing Your Investor List
Lastly, always be building your list of investors. This includes growing your list under 506(b) rules and marketing yourself as a syndicator—not a specific deal.
Go out into the wild. Talk to investment groups. Network with other syndicators. Constantly grow your visibility and relationships.
Case Study: The Power of Growing the Investor List
I have one client who took six months to raise $2 million on his first deal. That same syndicator later raised $500 million in under four hours. The difference was not luck—it was list growth. He built so much demand that capital came in immediately when deals were offered.
Final Recap: The Five Keys to Long-Term Syndication Success
Number one, always focus on your book of business—investors, lenders, and professionals.
Number two, always be looking for deals—there is no downtime.
Number three, never rely on one investor—diversify your capital base.
Number four, maintain liquidity—you need a war chest to grow.
Number five, always grow and nurture your investor list.
Closing: Building Toward Long-Term Syndication Success
My name is Tilden Moschetti. I’m a syndication attorney with the Moschetti Syndication Law Group. I hope this video was helpful for you because I really do want to see you succeed—from your very first deal to becoming a high-volume syndicator with strong investor demand. If we can be of service to you, please don’t hesitate to give us a call.