The Art of Getting Investors' Commitment: A Six-Step Guide

As a syndicator, one of the most challenging tasks is getting investors to commit to an investment and sign the subscription agreement. I've experienced this myself as I'm not only a syndication attorney but also an active syndicator. I've formulated a six-part system to deal with this situation.

Firstly, provide all necessary documents such as private placement memorandum, subscription agreement, and operating agreement once the investors have shown interest. Present all documents and other useful information like financial projections and marketing material in a neat and attractive package.

Secondly, address any queries they may have. It's important to provide clear and complete answers as it's mandatory under the Regulation D syndication. If you don't know the answer, it's okay to say so, but ensure you get back to them promptly with a comprehensive answer.

Thirdly, obtain soft commitments. Ideally, these should be written as it makes investors more likely to follow through. It also helps you keep track of your progress towards your target investment amount.

Fourthly, provide social proof. This could be testimonials, case studies, or reviews, or even just being active on social media.

Fifthly, create a sense of urgency. People fear missing out, so let them know that the investment opportunity won't last forever. But remember not to pressure them into making a decision.

Lastly, follow up regularly. Keep in touch with potential investors and aid them in their decision-making process. However, don't be overly aggressive or intrusive; maintain a balance between persistence and respecting their decision-making process.

These are the six steps I use in my syndications and fund-raising. If you need assistance, feel free to reach out.

Read more about Reg D Rule 506b - Rule 506b of Reg D: Non-Accredited Investors & No Solicitation: https://www.moschettilaw.com/rule-506b-of-reg-d/

Read more about Reg D Rule 506c - Rule 506c of Reg D – Solicitation & No Non-Accredited Investors: https://www.moschettilaw.com/rule-506c-of-reg-d/

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Moschetti Syndication Law Group is a boutique syndication law firm, serving small and growth-bound syndicators, and well as private equity firms. We keep our firm ‘boutique’ size so we can tailor the services to each client’s unique needs without turning the firm into a faceless factory or passing unnecessary overhead expenses onto our clients. (As our client, you’ll only pay a fixed fee, so no surprises.) As for the client experience, we give real-time answers without making you book an official appointment. And we’ll work with your ambitions and overall vision to help you close the current deal and fill-in that ‘missing’ piece - whatever you need - to keep adding more syndications to your portfolio. We keep syndicators syndicating (TM).

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