SEC wants you to do THIS when establishing your pre-existing relationships with Investors

The idea is you’re asking the investor a ton of questions to find out whether they’re suitable, whether your investments are suitable for these people. Are they sophisticated? And then they’re asking you questions to figure out what the hell do you do? Like what’s your asset class? Are you conservative? Are you a developer? Are you a cash flow? Are you growth? Are you like all those questions? And it’s that quality of the interactions is what they’re looking for. Nick Neumann You want to do all these things, but most importantly, you want to document them. You’re not going to remember when the regulator asked you, how did you meet Johnny over here five years ago? You’re not going to remember, and you should be able to pull up a file and say, look, I met this person on this conference. Here’s the questionnaire I sent. Here’s the phone call. Some people record the phone calls, but you’ve got to have something in your file. So you can hear all the emails that went back and forth here, the notes of our call. Here’s, you know, these days you can track where they went on your website, like all that stuff. It’s your burden to show that you establish that substantive relationship. But those are those eight steps.

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