How to raise accredited investor money?

11 Replies

Hi everyone,

I am wondering how to market a (~$10m equity) syndicated fund the correct way to gain attention. It's kinda frustrating that the size of the deal is too small for institutional investors but too large for retail investors (non-accredited investors).

Disclaimer: not a fund advertisement, i am seeking friendly advise only.


Originally posted by @Lincoln Wu:

Hi everyone,

I am wondering how to market a (~$10m equity) syndicated fund the correct way to gain attention. It's kinda frustrating that the size of the deal is too small for institutional investors but too large for retail investors (non-accredited investors).

Disclaimer: not a fund advertisement, i am seeking friendly advise only.


 At the top right of the page is a search bar.  There are over 2k articles on the topic

@Lincoln Wu

It all comes down to having a track record to show to your potential investors. If you don't have one, then your best bet is to partner with an experienced operator to leverage their experience. Think of it from an investor perspective: why would you want to give your money to someone without or with a little experience?!

Here's an article that will give you a few more tips on finding investors:

https://www.biggerpockets.com/member-blogs/10850/84894-where-can-i-find-investors

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Originally posted by @Brie Schmidt:
Originally posted by @Lincoln Wu:

Hi everyone,

I am wondering how to market a (~$10m equity) syndicated fund the correct way to gain attention. It's kinda frustrating that the size of the deal is too small for institutional investors but too large for retail investors (non-accredited investors).

Disclaimer: not a fund advertisement, i am seeking friendly advise only.


 At the top right of the page is a search bar.  There are over 2k articles on the topic

This is the best comment I have read this month on BP! Thank you for pointing out the obvious.

Wish there was a button to double like your comment. 

@Alina Trigub is right - your best option is to syndicate the amount you can handle and joint venture with another syndicate and/or private equity fund for the remainder. Your joint venture partner (and Lender) will be looking for your syndicate to have an experienced operator, so make sure you have someone on your team with significant syndication experience in the same asset class.

As @Kim Lisa Taylor said, you may want to consider partnering with others for the capital raise.  We are going through a similar situation right now.  As for the advertising, if you are doing 506C your advertisement options are pretty much limitless.  Meetups, hosting a podcast, social media..those are all great ways to find investors. 

I just want to point out that there has been significant abuse of syndication "partnerships" over the last few years, and many are not doing it the way it should be done. So, while partnering is fine, partnering for the sole purpose of having others raise capital for you for compensation is not.

@Lincoln Wu, to ensure you are doing things the right way, which is the only way - you need to consult with a credible SEC attorney. One most well known in the syndication space is @Mauricio Rauld. Not to mention one of the most genuine guys I know. Do your research. Good luck.

@Lincoln Wu start with identifying the type of syndication you want to offer. A 506(b) offering will have different requirements than a 506(c) offering. Your best bet is to reach out to your immediate network first.

@Lincoln Wu partner with experienced real estate company that has a proven track record(add value or help to solve their problems) and start building quality relationships with accredited investors. You can grab a “Best Ever Apartment Syndication Book” to start learning strategies how to build those relationships.

@Lincoln Wu great advice already here in this thread.   A common path to building a track record is to syndicate individual projects, one at time.  After you have done a handful of successful projects, it can become much easier to raise capital in a fund.  

Consider the perspective of your potential investor as they consider an investment in your fund.  Regardless of whether they are an individual investor or a larger capital group, you should be able to demonstrate your abilities as a good steward of capital.  Without gaining a certain level of confidence, it will be tough for potential investors to get comfortable enough to invest.  

As mentioned above, some syndicators bring on a partner with the experience and track record, but I have always believed in the idea that the person raising the capital should also have the experience necessary to answer questions from prospective investors.  After all, an investment in your fund is ultimately an investment in you as the sponsor. 

In my experience, there is a tremendous amount of confidence built with my investors when they know they can ask me a question about the properties, the performance, or any matter related to the structure of the investment and I can answer it.

All the best,

Jack