Securities Resources
FAQs, articles, books, and tools to help you raise capital with confidence.
The questions sponsors ask most often.
Real estate syndication is a deal structure where multiple investors pool capital to acquire a property they couldn't afford individually. There are two roles: the sponsor (also called the syndicator), who finds the deal, structures it, and manages it, and the passive investors, who provide most of the capital and share in the returns.
The legal work behind a syndication exists because the sponsor is offering a security: an interest in an investment managed by someone else. That triggers federal and state securities law, which is what governs how the offering must be structured, documented, and disclosed.
Yes. Self-drafted syndication documents are one of the most reliable ways to attract enforcement action or investor lawsuits. Securities law is unforgiving, and the consequences of a Form D filed late, a PPM with inadequate disclosures, or an exemption used incorrectly can range from rescission rights for investors to bar from future offerings. Even jail.
A specialized securities attorney handles exemption selection, entity structuring, document drafting, and compliance filings. The cost of doing it right is small relative to the cost of doing it wrong.
Both are exemptions under Regulation D and let you raise unlimited capital from accredited investors without registering the offering with the SEC. The difference is in how you find investors.
Rule 506(b): No general solicitation. You can only offer the securities to people you have a pre-existing substantive relationship with. You can include up to 35 sophisticated non-accredited investors, but the disclosure requirements get heavier when you do.
Rule 506(c): General solicitation is allowed. You can advertise the offering publicly, post it online, and pitch it to people you don't know. The trade-off is that every investor must be accredited and you must take reasonable steps to verify their accreditation status. Self-certification is not enough.
The choice depends on whether you have an existing investor network (lean 506(b)) or want to market the deal publicly (lean 506(c)).
A PPM is the disclosure document you give prospective investors before they commit. It describes the deal, the company, the people running it, the risks, the use of proceeds, the terms of the investment, and any other material facts an investor needs to make an informed decision.
Gene Trowbridge often calls the PPM "the story of your deal." The legal purpose is disclosure, but a well-drafted PPM also functions as a marketing document, presenting the opportunity in a way that builds investor confidence while protecting the sponsor from disclosure-related liability.
Accredited investor status is defined by the SEC. The most common categories for individuals are:
Entities qualify if they have over $5 million in assets or if all equity owners are themselves accredited. Family offices, registered advisers, broker-dealers, banks, and certain other institutions also qualify.
The full list is in SEC Rule 501. We can walk you through how to verify investor status under either Rule 506(b) or 506(c) during your consultation.
Within 15 calendar days of the first sale, where "first sale" means the first time an investor becomes irrevocably committed to invest. If the 15th day falls on a weekend or holiday, it extends to the next business day.
For most offerings, the practical trigger is when you "break impounds," meaning investor funds are released from escrow and the deal closes. Our offering packages include the Form D filing, so we file as a matter of practice once final documents are delivered. We also file state notices whenever you notify us that you have received investor capital from residents of a state.
For a typical Regulation D offering, three weeks. That includes structuring conversations, entity formation, and the full document package (PPM, operating agreement, subscription agreement, supporting items).
Regulation A+ offerings take longer because the SEC must qualify the offering before sales can begin. Plan on roughly six months from start to launch for Reg A+.
Our securities offering package covers everything you need to launch a compliant offering:
The flat fee is the price you pay. We don't bill hourly and we don't add fees during the engagement. State and SEC government filing fees ($50 to $1,200 per state) are charged separately because they pass through directly to the relevant agencies.
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Real estate syndication is a deal structure where multiple investors pool capital to acquire a property they couldn't afford individually. There are two roles: the sponsor (also called the syndicator), who finds the deal, structures it, and manages it, and the passive investors, who provide most of the capital and share in the returns.
The legal work behind a syndication exists because the sponsor is offering a security: an interest in an investment managed by someone else. That triggers federal and state securities law, which is what governs how the offering must be structured, documented, and disclosed.
The terms are often used interchangeably but they describe different things.
Syndication is the deal structure: a sponsor and a group of investors pooling capital to invest together.
Crowdfunding is one method of finding the investors. Specifically, securities crowdfunding under Regulation Crowdfunding lets you raise from investors found through registered online platforms.
You can run a syndication without crowdfunding (most syndications use other exemptions, like Reg D). You can also use crowdfunding for ventures that aren't real estate syndications. The two concepts overlap but they aren't the same.
Yes. Self-drafted syndication documents are one of the most reliable ways to attract enforcement action or investor lawsuits. Securities law is unforgiving, and the consequences of a Form D filed late, a PPM with inadequate disclosures, or an exemption used incorrectly can range from rescission rights for investors to bar from future offerings. Even jail.
A specialized securities attorney handles exemption selection, entity structuring, document drafting, and compliance filings. The cost of doing it right is small relative to the cost of doing it wrong.
Whether a first-time syndicator or seasoned deal sponsor, you should always engage a securities attorney to ensure regulatory compliance.
Common syndicator fees include:
A note of caution: receiving compensation specifically for selling securities, separate from these standard syndication fees, can make you an unregistered broker-dealer. That is a serious violation. We can walk through how to structure compensation safely during your consultation.
A waterfall is the formula for how investment returns flow from the deal back to investors and sponsor. Most waterfalls have multiple tiers, with a preferred return (a target rate paid to passive investors first) followed by sponsor promote (a disproportionate share of profits above the preferred return).
Two-class structures are common: Class A investors receive their preferred return before Class B investors (often the sponsor and aligned parties) participate.
The right waterfall depends on the asset, the projected returns, and the investor expectations you're working with. We help structure waterfalls that are aligned with the deal economics and clearly disclosed in the PPM.
A real capital raise has several pieces:
Our flat-fee packages cover the legal documentation and filings. We also coach you on the parts that aren't legal work but matter for raising capital.
In our experience, the things that matter most to passive investors:
A well-drafted PPM addresses all of these clearly. A poorly drafted one creates uncertainty that makes investors hesitate.
Yes. Real estate is the most common use, but the legal mechanics work for almost any venture. We've helped clients raise capital for multifamily and commercial real estate, self-storage, mobile home parks, RV parks, distilleries, olive groves, minor league sports teams, single-store franchises, operating businesses, oil and gas, renewable energy, technology companies, healthcare ventures, hospitality, manufacturing operations, and private equity funds across multiple industries.
The legal principles are the same regardless of asset class. What changes is the structuring (debt vs. equity, fund vs. single-asset, accredited vs. retail) and the disclosures appropriate to the specific business.
Compared to bank debt or institutional capital, syndication offers:
The trade-off is the time and complexity of structuring an offering and the ongoing investor relations work after the raise. For sponsors with the discipline to do both well, syndication outperforms institutional capital on most measures.
A securities exemption lets you offer and sell securities without registering the offering with the SEC. Without an exemption, every offering would need to go through the same process as a public IPO, which is impractical for private deals.
The most common exemptions are:
Each has its own requirements for investor qualifications, disclosure, offering size limits, and resale. The right choice depends on your raise size, your investor base, and how you want to market the deal.
Regulation D is the most common framework for private securities offerings. It exempts qualifying offerings from full SEC registration. The two rules used most often are 506(b) and 506(c).
Regulation D preempts state-level securities registration (you only file notice filings, not full registrations), which is why Reg D is the standard choice for nationwide offerings.
Both are exemptions under Regulation D and let you raise unlimited capital from accredited investors without registering the offering with the SEC. The difference is in how you find investors.
Rule 506(b): No general solicitation. You can only offer the securities to people you have a pre-existing substantive relationship with. You can include up to 35 sophisticated non-accredited investors, but the disclosure requirements get heavier when you do.
Rule 506(c): General solicitation is allowed. You can advertise the offering publicly, post it online, and pitch it to people you don't know. The trade-off is that every investor must be accredited and you must take reasonable steps to verify their accreditation status. Self-certification is not enough.
The choice depends on whether you have an existing investor network (lean 506(b)) or want to market the deal publicly (lean 506(c)).
Regulation A (sometimes called "Reg A+" after the JOBS Act expanded it) is a securities exemption for offerings up to $75 million annually. It's sometimes described as a "mini-IPO" because the offering must be qualified by the SEC before sales begin, and the company has periodic reporting obligations afterward.
Two tiers:
Reg A+ allows public advertising and accepts both accredited and non-accredited investors. The trade-off is that the qualification process takes roughly six months and the ongoing reporting obligations add cost.
Regulation Crowdfunding (Reg CF) lets companies raise up to $5 million annually from both accredited and non-accredited investors through registered online crowdfunding platforms (Wefunder, StartEngine, Republic, and others).
Key features:
Reg CF works well for raises in the $100,000 to $5 million range that benefit from public marketing and a wide investor base.
Accredited investor status is defined by the SEC. The most common categories for individuals are:
Entities qualify if they have over $5 million in assets or if all equity owners are themselves accredited. Family offices, registered advisers, broker-dealers, banks, and certain other institutions also qualify.
The full list is in SEC Rule 501. We can walk you through how to verify investor status under either Rule 506(b) or 506(c) during your consultation.
"Testing the waters" lets a company gauge investor interest in a potential offering before formally launching it. Both Reg A+ and Reg CF allow this in different forms.
Under Reg A+, an issuer can solicit interest before filing the offering statement. Under Reg CF, the issuer (but not the platform) can communicate with potential investors before filing Form C.
The communications are subject to specific rules about what can be said and how interest can be measured. They cannot be used to actually accept investments. We can advise on what's safe to say and what crosses into early offering activity.
For most small and mid-sized businesses, no. A traditional IPO costs $1 million or more in legal, accounting, and underwriting fees. The process takes 6 to 12 months. Public companies face quarterly reporting obligations, Sarbanes-Oxley compliance, and constant market scrutiny that can cost millions annually.
Private offerings using exemptions (Reg D, Reg A+, Reg CF) accomplish most of what a small or mid-sized company needs at a small fraction of the cost. Most of our clients use Reg D 506(b) or 506(c) precisely because the public-offering burden doesn't make sense at their scale.
The exception: if you're raising hundreds of millions and your business genuinely needs the public market access (broad shareholder base, secondary trading, acquisition currency), an IPO becomes the right vehicle. That's a different conversation.
Yes, with caution. A fund of funds (a fund whose investments are themselves limited partnership interests in other funds) can use 506(c). The complications usually involve the underlying funds' own subscription documents, which may have their own accreditation requirements that conflict with how 506(c) verifies investors.
If the underlying funds use 506(b), there can be issues with the fund of funds publicly soliciting and then investing in 506(b) funds, because the public solicitation could be attributed up the chain. We work through these structuring questions during the homework call.
Form D is the notice filing required for offerings made under Rule 504, Rule 506, or Section 4(a)(5) of the Securities Act. It's filed with the SEC after the first sale and gives the SEC basic data about the offering: who the issuer is, what exemption is being used, how much is being raised, and where the investors are.
Form D doesn't approve or reject the offering. It's a notice, not a registration. Its purpose is data collection.
Within 15 calendar days of the first sale, where "first sale" means the first time an investor becomes irrevocably committed to invest. If the 15th day falls on a weekend or holiday, it extends to the next business day.
For most offerings, the practical trigger is when you "break impounds," meaning investor funds are released from escrow and the deal closes. Our offering packages include the Form D filing, so we file as a matter of practice once final documents are delivered. We also file state notices whenever you notify us that you have received investor capital from residents of a state.
Form D is filed electronically through the SEC's EDGAR system (Electronic Data Gathering, Analysis, and Retrieval). The issuer needs a Central Index Key (CIK) number and corresponding access codes, both obtained by completing a Form ID application for EDGAR access.
The CIK and access codes can take a few business days to issue, so it's worth establishing them well before your first sale. Our offering packages include the Form D filing, but the issuer needs to obtain the EDGAR credentials before we can file on your behalf.
The SEC charges no filing fee for Form D. State notice filings, however, vary widely. Most states charge between $50 and $1,200 per filing, depending on the state and the type of offering.
Our flat-fee package includes the work of preparing and filing the Form D and state notices. The actual government filing fees pass through to you separately, since they go directly to the SEC and the relevant state agencies.
The SEC can impose fines for late or missed Form D filings. Under Rule 507, an issuer who has been ordered, enjoined, or otherwise found in violation of Rule 503 may lose the ability to use Regulation D for future offerings. That can be catastrophic for a sponsor whose business model depends on Reg D.
Beyond the SEC consequences, late filings show up in due diligence and damage credibility with future investors and lenders. Filing on time is the cheap, easy thing to do.
Most states require a notice filing whenever an offering sells to investors who reside there. The federal Form D doesn't replace state notices; it's separate.
State notice filing rules vary. Most charge a fee, most have a 15-day window from the first sale into the state, and some require copies of the offering documents. A few states have additional requirements specific to certain offering types or investor counts.
Our package includes the notice filings for every state where investors reside at the time of the Form D filing. If new investors come in from additional states later, we coordinate the supplemental filings as part of the six-month support window.
A PPM is the disclosure document you give prospective investors before they commit. It describes the deal, the company, the people running it, the risks, the use of proceeds, the terms of the investment, and any other material facts an investor needs to make an informed decision.
Gene Trowbridge often calls the PPM "the story of your deal." The legal purpose is disclosure, but a well-drafted PPM also functions as a marketing document, presenting the opportunity in a way that builds investor confidence while protecting the sponsor from disclosure-related liability.
A typical syndication uses two LLCs:
The two-entity structure separates investor capital from sponsor liability, lets the sponsor take a manager fee through the Manager LLC, and provides flexibility for the sponsor to manage multiple deals through one Manager LLC.
Forming each LLC requires filing organizational documents with the Secretary of State of the state of formation (often Delaware, Texas, or Wyoming), obtaining an EIN, and drafting an operating agreement. We handle entity formation as part of every offering package.
A complete offering package typically includes:
Our flat-fee package includes all of these.
Material changes to the offering require an amendment. Common triggers:
Minor changes (typos, formatting, non-material clarifications) usually don't require an amendment. The line between material and non-material isn't always obvious, so when in doubt, ask. The cost of an unnecessary amendment is small. The cost of a material change that wasn't disclosed can be rescission rights for investors.
Our securities practice covers the full lifecycle of a private offering:
We also handle business entity formation and estate planning for sponsors and their families.
Our securities offering package covers everything you need to launch a compliant offering:
The flat fee is the price you pay. We don't bill hourly and we don't add fees during the engagement. State and SEC government filing fees ($50 to $1,200 per state) are charged separately because they pass through directly to the relevant agencies.
For a typical Regulation D offering, three weeks. That includes structuring conversations, entity formation, and the full document package (PPM, operating agreement, subscription agreement, supporting items).
Regulation A+ offerings take longer because the SEC must qualify the offering before sales can begin. Plan on roughly six months from start to launch for Reg A+.
Our standard process has five steps:
Most Reg D offerings move from step 1 to step 4 in three weeks.
In California, Texas, and Massachusetts, yes. We handle the real estate transaction work alongside the securities work for clients in those states, from letter of intent through closing.
In other states, no. We focus on the securities work and coordinate with your local real estate counsel on the transaction itself. This is an intentional carve-out: real estate transactions are state-licensed practice and we want to be honest about where we have direct expertise versus where you're better served by local counsel.
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