This week I interview Private Money Rockstar Jillian Sidoti who is one of the country's leading experts on Regulation A+. (Regulation A is an exemption from registration for public offerings.)
She is also the author of the highly rated book, The Crowdfunding Myth which debunks the multiple myths surrounding crowdfunding and teaches the reader how to effectively crowdfund their securities offering
Jillian also spends her time speaking at seminars educating real estate investors on how to legally raise capital for their real estate investment projects.
This episode is PACKED with solid gold chunks on how to legally raise money without getting yourself in hot water with State and Federal Regulators. The reason I asked her to join me was due to a Facebook post she made regarding advertising on Facebook to raise private capital.
Lots of investors tend to feel that SEC regulations don’t apply to them, this is for various reasons but often these people are the victims of bad information. As we all know, on social media, everyone has an opinion it seems. Sometimes those opinions lead others unknowingly astray from the law. Below is her post:
“Today the SEC came out with this as part of their complaint against a defendant selling private securities:
“Respondents did not have pre-existing, substantive relationships with a number of the Fund’s investors and engaged in a general solicitation of public interest in the offering through Fund's website and traditional media interviews.”
It continues to be unlawful to solicit for investors outside an applicable exemption such as one under Rule 506(c). This means solicitation on FB, FB pages, your website, Linked In, other social media, or standing up in the front of the room at your local REIA and asking “does anyone want to invest?”
Ask yourself: “do I really have a pre-existing, substantive relationship with all of my FB friends or all of those in that FB group I just posted to?” Such a relationship is “intimate knowledge of one's financial ability to invest.” You can achieve this through an investor qualification form and that is the safest way to achieve such a relationship.
I see this type of offense all the time and people always have an excuse as to why the rules don't apply to them…until they do apply to them.
By the way, the defendant above raised a total of $567,000 – not millions of dollars. So if you don't think the SEC will care about “little ol' you” you couldn't be more wrong. You are what is referred to as “low hanging fruit.”
Jillian doesn’t pull any punches here in this post, in fact, during the episode, she mentions that these government agencies are on a mission to collect fines. In fact, they even go so far as to pay people who bring forth complaints that wind up uncovering illegal activity. I see people begging for money on Facebook every day, don’t be surprised if these people wind up going to jail or being heavily fined. Be sure to bring a notepad when listening to this episode because you a guaranteed to learn a ton.