How do I pay people to market my Regulation D syndication?
Syndication Law & The Private Placement Memorandum Attorney
Compensating Others for Marketing a Regulation D Syndication: Legality and Risks
Exploring the legal landscape and potential risks involved in compensating others for marketing a Regulation D syndication, including exceptions and consequences of using finders, and the importance of following legal practices.
Tilden Moschetti, founder of Moschetti Law Group, discusses the issue of compensating others for marketing syndications. He advises against paying finder fees due to the potentially severe consequences and the inherent risks involved. The only permissible payments, according to Moschetti, are to licensed broker-dealers who are legally able to raise funds for your syndication.
He suggests that an alternate and legal approach could involve employing individuals on an hourly basis to help identify potential investors. However, their pay cannot be tied to the funds they raise. People can refer accredited investors to you, but you can't pay them for these referrals.
Moschetti warns against the legal and financial repercussions of being caught compensating non-licensed individuals for finding investors, which could put the entire investment at risk.
He notes that compensation structures can be negotiated amongst the partners of the syndication for raising money, but this cannot extend to non-officers. Moschetti concludes by inviting individuals who need assistance with their syndications - be it real estate, business capital, or cryptocurrency hedge funds - to get in touch with his law group.
In sum, Moschetti's main advice is to only compensate licensed broker-dealers for finding investments, pay individuals hourly without linking their compensation to performance, or adjust compensation among partners or executives of the syndication.
Read more about Reg D - The SEC and Its Regulation D: https://www.moschettilaw.com/sec-reg-d/
Read more about real estate syndication - How to Syndicate Real Estate: https://www.moschettilaw.com/how-to-syndicate-real-estate/
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