So you’re going to do a Regulation D offering. This video probably applies more to people who chose to do a 506c offering to advertise, rather than 506b using an established friends and family network of people that you already know. You’ve chosen to do that, and you want to put it out there and be successful, but you’re worried that the broker-dealers aren’t going to look at you or want to talk with you, or you just can’t afford them. Because, gosh, they are extremely expensive. Let’s talk about how you can put your Regulation D offering out there and how you can market it without relying on broker-dealers.

To put a Regulation D offering out there without relying on broker-dealers, there are five things that you absolutely must do. Again, this is assuming it’s a 506c offering, and your intent ultimately is probably going to be to advertise, bringing in accredited investors only. But you’re not afraid of communicating with people who are not people that you already know.

The first and most critical thing is to establish your founder investment theory. Founder investment theory is the most important thing. What is founder investment theory? It’s really a component of four different things that put together your thesis on why this investment is compelling for your investors:

  1. The strategy you’re taking. Is this a value-add play, a development play, an appreciation play? Are you just waiting for it to start cash flowing? Whatever it is, what is that strategy you’re taking to get the money for it?
  2. The philosophy you’re taking. What asset classes and where is it located? If it’s real estate, how does it work there? Why is that particular asset class compelling? What makes it special? Is it particularly lucrative? Is it particularly speculative? Is it pride of ownership? Is it something more like, well, this is stable and it always goes up?
  3. The risk tolerance implied by the investment itself. Is it very low risk or very high risk? Your investors are looking at it comparing the risk to their own risk tolerance. If it’s extremely stable in a class A city, if it’s real estate, for example, an apartment building in downtown in a very major metropolitan area with rents that have a vacancy rate less than 1%, it’s probably pretty darn safe. If it’s out in the middle of nowhere and it’s a big construction project, it could be quite a bit more speculative. If it’s a cryptocurrency or a new business with an untold model, that’s very speculative.
  4. The story behind it all. Why do investors want to invest in this thing? If it’s just something they’ve seen a million times before, then you’re only competing on numbers, like ROI, and it’s a snooze fest. If you look at a lot of the ads out there, they are boring because all they’re talking about is preferred returns and what sort of ROI they’re getting. And none of it can be believed really. But what saves that all is the story. If you’re doing something unique and creative and putting something out there into the world that’s there for a specific reason and has a story behind it, that is going to resonate with investors.

Number two, you’ve got to put together the marketing materials. You can’t just be out there alone; you’ve got to show up like a pro, and pros show up with marketing materials. My firm puts together private placement memorandums, operating agreements, questionnaires, all those legal documents that help you show up like a pro, but they’re only one piece of it. They’re one part of the component that builds trust with that investor. The other piece is how you show up with the marketing materials.

Number three, start with your own network. Even if you’re planning on advertising, you’ve got to tell everyone you know, and you’ve got to market to everyone you know. They can also reach out and help you succeed by finding other investors, other people they know. Instantly your network is growing and growing and helping bring you eyeballs to the deal.

Number four, carefully advertise. You can blow the bank very easily on this one. It’s so easy to spend a lot of money on advertising and consultants. Be cautious and skeptical. Try little steps first. Make sure you test your marketing. Don’t spend every dime you’ve got on marketing, because you probably aren’t going to be overly successful with the first campaign you put together. But you probably will be with the fifth one.

Number five, be a good salesman. What I mean by that is follow up, follow up, follow up. I can’t begin to tell you how many investments that I track personally where I don’t get a single follow-up message at all, or I get the same follow-up message that’s obviously canned. If I get a personal follow-up that’s unique and compelling, that’s being a good salesman, and that can make the difference.

My name is Tilden Moschetti. I am a syndication attorney. My job is to help you be successful. I do that primarily through putting together the operating agreement, the subscription agreement, the private placement memorandum, filing the Form D. Ultimately, those are the legal components of it. But I’m also an experienced syndicator. I’ve done a lot of deals for myself, and I’ve seen a lot of deals with other people. I can help you with that as well. We offer flat fees, which means take advantage of my time if you’re a client. You can talk to me and strategize about this. You don’t always have to take my advice, and you shouldn’t always take my advice, but it’s definitely important to start strategizing and work with people that understand this game from the boots-on-the-ground level. Again, Tilden Moschetti. If I can be of help to you, give me a call.