Biggest Mistake New Syndicators Make #shorts

One of the biggest mistakes we see, Bethany and I see all the time, is people not realizing that they’re actually selling securities, right? Because as we discussed yesterday, it sometimes doesn’t even make sense. I’m just selling property or I’m just doing something. Like, why is the SEC involved? So a lot of newbies, first-time syndicators, or people who are raising small amounts of money, they don’t realize they’re actually violating securities law. They don’t realize that they have to register or find an exemption to registration. And so that’s one of the things we see a lot. But remember the definition from yesterday. The structure itself doesn’t matter, right? So anytime you take money from passive investors, no matter what the structure is, if the returns are being generated by your efforts, it’s a security. And the mistake we always see is people say, oh, I’m doing it as a promissory note. Oh, I’m doing it as a tick agreement. Oh, I’m doing it this way or that way. And none of that really matters because they’re going to look straight at whether you’re generating the returns yourself.

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