Deal partnering and/or syndication

[Rickey Wallace]

After listening to last week’s podcast, speaking mostly about syndication-ing and such, I’ve come to realize that I’ve been kind of pushing towards that kind of work over the past few months...on a much smaller scale lol. With that new insight and direction to focus my goals on, I’ve realized I need a bunch more knowledge about the subject. I have some questions but if someone would also happen to have some source material to point me towards to read about, that’d be splendid as well 1) how far down the rabbit hole of partnering up with other people’s money can one go before you start to tread into needing syndication paperwork together? 2) how many people can you partner up with before being syndicated is recommended/required? 3) is there a definitive amount of people or money that automatically crosses the threshold into syndication (aside from the net worth amount per person)? I’m sure there are plenty of others swarming in my head but I gotta get back to work lol. Thanks!

[Todd Dexheimer]

It's not really about how many investors, but what your role is. If the investors have an active day to day role and help make decisions equally or at least based on percentages of ownership, then you're fine. Once you start to have passive investors that don't have a role in the success of the deal other than money, then you should syndicate. Even with one investor, you may need to run it through a securities, if that investor is passive.