One of the most challenging and frustrating times in the role of a syndicator, or fund manager comes, when you've already put the deal together, you've already got the documents assembled, you're out there shopping in front of investors. And then now you're trying to get the investors to what I call a latch on to the investment to give you their money, sign the subscription agreement, so that you can close the fund that you're raising money for.
I am an active syndicator. Myself, not only am I a syndication attorney, but I'm also actively syndicating deals myself. So I know exactly what it's like to feel that pressure of needing your investors to latch on to get their money to make it so this deal can go forward. So I know that frustration, I know the challenge. So I have a six part system and I hope you'll find it helpful. Let's go through it.
The first step is provide the necessary documents after your investors already have given you the Okay, that sounds interesting, I'd probably be interested in something like that. That is the time when you provide those necessary documents. And here we're talking about the private placement memorandum, subscription agreement operating agreement, I like to provide a questionnaire I find it helpful,
and then provide those documents to them. You want to also include anything else that would be useful financial projections, marketing material, whatever it is, put it all in a nice cohesive, good looking package. Well put together presentations and well put together required documents packages get you funded where masses do not an investor is going to see a mass they're going to run away scared. So make sure everything looks nice and cohesive and clean as possible. So step
number one, provide those necessary documents. Step number two, address any questions and concerns they have. Make sure that that's that you're getting those questions and provide good answers. I mean, that's one of the necessary things that takes place in a Regulation D syndication is you have a duty to provide those kinds of answers for any question they have. That's one of the things that is absolutely required under the regulation. So get those answers to them, help them
out, help them come to the decision. And hopefully that decision is they want to invest with you. Now it's okay. When they give you a call. And they ask you a question. If you don't know the answer to it, you can say I don't know. Let me get back to you and make sure that you get back to them quickly and promptly to give them a full nice, well rounded answer. One of the things I as a syndication attorney like to help my clients
with is when those questions come into my syndicators. They give me a call, and they say I'm getting these sets of questions. Can you help me craft them? And I am always happy to do that to help them come up with good answers for answering those questions in a way that not only is thorough and complete and accurate, but also pushes the deal forward makes it more likely for people to invest. Sometimes the answer is no,
we're not willing to do that or whatever like that. But the question always needs to be answered respectfully and completely. So I like to as an attorney help my my clients craft those responses. Step number three is obtain soft
commitments. Now in a perfect world, you're getting written soft commitments, because when a person writes it down, whether it's by an email, or whether it's a piece of paper, or a letter, or whatever it is, and they've soft committed to you, they're much more likely to follow through and invest in your deal. So obtained soft commitments, ideally written.
Now also, you need this kind of information anyway, if you're raising $10 million, for whatever purpose and you you need to know where you're at on on the deal, right, you need to have a list of all the potential investors that you've been speaking with, and you need to line it up with how much money people are likely to invest so that you can hit your targeted
raise amount. So get those soft commitments. Those people who have soft committed to you are more likely to admit, more likely to subscribe, then the people who haven't committed at all to you. Step number four is continue to provide social proof that can be something that tips the scale Now that social proof can either be just generally being on social media or wherever providing, you know, way, here's a testimonial that we have, here's a case study, here's a review, whatever it is,
if it's a five of succeed, that's not an issue at all. If it's a 506 B, it can be an issue. So sometimes what I will do in my own raises, if I know Person A is interested in investing, and they know Person B and person B has already invested, I'll probably invite both of them out for a for to go to have a drink, or something like that, or go go hit some balls at the driving range, or something like that, in order to
build that relationship a little bit further. Really what I'm doing not only is building a good relationship with them, but I'm also building in that social proof, because now Person B is going to be saying, Oh, this is a great investment, you really should come into this, they're going to be providing that that pressure, if you will, that social proof, in order for a person a to invest. Step number five, offer a sense of urgency. Urgency is a great motivator, people have a great great, great
fear of missing out. Now, if they're feeling a fear of missing out, that is a good thing, they're more likely to commit to you. So you want to be telling them, Look, I've got this, I've got this investment going on, I've raised all but $500,000, or whatever makes sense of it. I've got a lot of commits that have already that are very interested and committed, I know you want in on this deal, I want to make sure that you can get in because I want you to invest because I
like you. And I also know you're gonna really like this investment. And I'm in this for the long haul with you. So I'd really like you to be able to come into it. But I'm also I gotta take the first money that comes in, and it's probably going to be oversubscribed, within three days or five days or whatever seems reasonable at the time. Now, that's good sense of like using urgency. That's a nice, powerful sense of urgency where you're a powerful syndicator. Right, so you have
command of this thing. And you're offering to them the ability to get to come in, what you do not ever want to do is become a forceful syndicator, where you're pressuring people like a used car salesman to come into the investment, where you are like some used car salesman, even used car salesman, turn syndicators, calling people and saying, look, you've only got 24 hours left, you got to get in now, you got to come in now, you
got to come in. Now, that's not going to work. Not only does it deteriorates a trust, but it also isn't it isn't even legal, we need to allow people to make their own decisions without a forceful way of forcing them into prying our security. So create the sense of urgency, but do it the right way. Step number six, and probably the most important other than providing
the documents is follow up regularly. You can't let this one die, you can't let let it go where you have, you know, 10 people who you need to follow up with, and you're not calling any of them. Because you're working on the next person who may call in. If somebody's expressed some interest, you got to stay in touch with them and help them make their decision. You don't
need to force them go back to sense of urgency. But you do need to make sure that they're aware that gives the the idea that you are persistent and professional and can make the case for them to come into your investment. You don't want to become a pest you don't want to bother them too much, but you should be following up in a regular consistent manner. So
let's look at our key takeaways here are the six steps. Number one provide the necessary documents create the comprehensive investor package that contains all the necessary documents for those investors to make their decision. It includes the private placement memorandum, the subscription agreement, operating agreement, business plans, financial projections, pictures, whatever it is just make it good, make it
look good. Give them wiring instructions as well if I didn't mention that before, so that way, it's all there for an investor when they're ready to make it happen as quickly as possible. Step number two, address those concerns and questions. An open line of communications where investors can voice their questions, their concerns about your investment is not only a good idea, it is necessary to comply with the
rules. You need to be ready to address any of those questions with To complete transparency, and patience, if you don't know the answer, say you don't know the answer and find the answer and then get back to them. This step, this step builds that trust and it reassures investors that their investment is in good hands.
Step number three, obtain soft commitments. Soft commitments are their expression of that they would like to invest and it's not legally binding, do not assume that it is legally binding, do not pretend it's legally binding, do not do anything where you're putting that kind of pressure, where they've entered into a legally binding thing, all you'll do is
hurt yourself. But it is in their mind, it may not be legally binding, but people are kind of honor bound, they're gonna be more likely to follow through if they've given you a written soft commitment. So try to convert those soft commitments into the firm commitment. By giving that keep giving that reassurance and give that investment opportunity and get the paperwork done so that they can commit as quickly as
possible. Number four, provide that social proof success stories of your past syndications or testimonials from satisfied investors find ways to continue to get brand marketing or social marketing into your investors heads so that way they're more likely to invest. Number five, offer a sense of urgency. Now it's essential that you provide that clear timeline for investment, make sure that those potential
investors know that the round is going to close. How many slots are left, make them have that fear of missing out, just don't push them into making a decision without without them committing to it themselves. They're the ones that have to come up with that answer. And step number six, follow up regularly. Don't let potential investors forget about this opportunity. Follow up with them regularly. keep them engaged, informed about the progress that you're making. However, just be mindful, don't
be overly aggressive or pushy. you're striving for a balance between persistence and respecting their own decision making process. This is Tilden Moschetti. Syndication attorney for the Moschetti syndication Law Group. Those were the six steps that I use in order to latch investors to investments when I'm doing my own syndications or raising money for my funds. If we can help you give me a call