My name is Tilden, Moschetti. And I'm the founder of Moschetti. Law Group. I'm a syndication attorney. And we oftentimes get a question of what is the best way to structure my private placement offering? As a syndication attorney, one question I hear many times is, what's the best way for me to structure the entities for my syndication? It's a great question, and there is a best way to do it. So it all starts because it is a syndication and an investment, I like to start thinking about it in terms of what people are going to be investing into. So they're investing into a company because it's a syndication. So as that that's an entity itself, so that entity I like to call the investment entity, it can be an LLC, it can be a corporation, talk to your accountant or your attorney about the best way to, which is the best to do that, which is the best form and the best place to place it. But that's the investment entity. Now the investment entity doesn't just run itself. So the best practice isn't to have just you be the CEO of that company. It is actually for the sponsor, you to have an entity yourself. And that sponsor is the manager or the president of the the has the controlling interest of that company. So the investment entity is managed by the sponsor entity, which is a separate LLC or corporation, depending on which works best for you your situation. And the manager then protects you from any liability. So what do I mean by that? So let's say an investor gets very upset about something. So they file a claim against the entity about the investment entity, but they also file a claim against the sponsor. Now, if you would stay just you as a person as the sponsor, they could file a lawsuit against you personally, and all of your assets would be subject to whatever the decision was. However, if you file it as if the manager of the investment entity is an entity itself, they can sue the investment entity, and they can sue the sponsor
entity. But unless there's fraud, they're not getting past the sponsor entity. So what that structure does is it shields you from those kinds of things happening, it's a form of asset protection. And it also makes the management much much simpler. As you go forward in case you need to make any changes with how you work as a sponsor. For example, if you're have a group of people that are the sponsor, it then you can make changes amongst yourselves that don't impact the investors, the investors aren't, don't need to be privy to it, because the entity is still the entity. So that is the typical way to do it. Now one challenge, which comes up sometimes is if you're doing a fund, something that owns multiple entities, then what I like to do is have the investment entity there. And the investment entity becomes a manager itself of the individual properties or companies or businesses or ventures, whatever. So each one of those, I'll use properties as the example become their own property LLC, which is managed by the investment entity, which of course is managed by the sponsor entity. So I know it sounds confusing once we get to the fund level, but it really does make sense and it protects everybody at every step of the way. So that's the best way to do it, too. The best way to structure your investments is structure. If you need some help with your syndication, be it for real estate, you're an entrepreneur, you're raising some capital for your business, or you're putting together that new cryptocurrency hedge fund. Give us a call. My name is Tilden Moschetti. I am a syndication attorney or visit us online on at www.moschettilaw.com or if you need help just with your private placement memorandums, we've got you covered there too. ppm.moschettilaw.com.