Investor · Frisco, TX · Member since 2017 · 41 posts · 26 votes
Nick Love - 05/29/2019
I am starting a discussion about attracting passive investors through marketing platforms and if anybody has had success in this field of raising capital from advertising. I have seen multiple ads from Grant Cardone on Instagram and now he has purchased billboards with intent to help raise more money for his equity funds.
Has anybody raised capital from a deal from facebook/instagram ads, billboards, or other creative advertising means? OR is this type if marketing better for creating a long term email list?
Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
7y
@Nick Love you can’t advertise for investors unless your fund is registered with the SEC.
There is a difference between advertising, marketing and branding. What most syndicators do is market and brand to raise awareness, build credibility and develop relationships. That is the key raising money is credibility and create relationships.
Grant advertises because he has a fund that is registered and he can accept non accredited investors as well.
Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
7y
@Nick Love you can’t advertise for investors unless your fund is registered with the SEC.
There is a difference between advertising, marketing and branding. What most syndicators do is market and brand to raise awareness, build credibility and develop relationships. That is the key raising money is credibility and create relationships.
Grant advertises because he has a fund that is registered and he can accept non accredited investors as well.
Working on establishing your credibility and track record while connecting with investors. Building relationships takes time and effort. You can do these in parallel while investing yourself. Once you build the track record (assuming this is WIP for you), then you can leverage the relationships with your investors to start offering them to partner with you on the deals. In terms of when to start advertising on social media and beyond, it's critical to learn the legal aspect of syndications well first prior to any advertising.
Syndication Expert and Investor · Indianapolis, IN · Member since 2016 · 591 posts · 808 votes
7y
I think that personal relationships and referrals is the tried and true way of raising capital.
When it comes to investing ones equity nest egg or retirement savings people often want to be able to look the sponsor in the eyes, have a conversation and get their read. At the very least have conversations on the phone.
That being said with new types of securities exemptions 506 (c), Reg A+ and CF now available there are significantly more opportunities to reach new investors who are in return trying to find quality sponsors. The challenges are unique but I think there is a lot of potential to pair local operators with investors located around the country.
My guess is that we are still on the cusp of a new paradigm of how syndicated real estate deals are marketed and how investors choose to invest. I'm currently looking at casting a wide net with a foundation of personal networking combined with social media and other relevant content.
United States · Member since 2015 · 401 posts · 394 votes
7y
@Greg Dickerson correct me if I'm wrong, but I believe you can advertise your business / services to investors, you just can't advertise an opportunity (unless you're properly registered). There is nothing wrong with a flyer or social media add that says "hey I syndicate commercial real estate" or "hey I help you place funds in attractive real estate offerings." The problem comes when you are advertising a live deal and promising/projecting returns in exchange for investments.
@Greg Dickerson correct me if I'm wrong, but I believe you can advertise your business / services to investors, you just can't advertise an opportunity (unless you're properly registered). There is nothing wrong with a flyer or social media add that says "hey I syndicate commercial real estate" or "hey I help you place funds in attractive real estate offerings." The problem comes when you are advertising a live deal and promising/projecting returns in exchange for investments.
I would run any marketing or advertising ideas by your attorney first just to be on the safe side.
That being said yes in general you can advertise what you do that you syndicate or invest in real estate. You can even go as far as to say you work with qualified investors But I think where it crosses the line is when you say “I help you place funds” that’s soliciting an investment.
I’m not an attorney I just prefer err on the side of caution.
Attorney · Los Angeles, CA · Member since 2016 · 284 posts · 314 votes
7y
What you can advertise and how depends on the type of securities offering you're doing. Some allow you unfettered ability to advertise (so long as its truthful), some allow you limited ability to advertise certain things (like your business generally but not an offering), etc. So, i know its not a fun answer, but the answer is, "it depends." I generally find that in the general solicitation/digital advertising realm that advertising is just the stepping stone, but really reeling people in requires a lot more.