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Tilden Moschetti: It is not
uncommon for me to meet a client

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for the first time and them to
explain that they have four

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different projects that are all
very different from each other.

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And want to know should they put
this under one umbrella or how

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to organize everything. It's my
name is Tilden Moschetti, I am a

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syndication attorney with the
Moschetti syndication Law Group,

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I'm gonna go through how I would
if I were them organize those

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projects

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so a lot of times private equity
funds will look at a series of

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projects and try and make a
decision on whether or not to

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put them all in one under one
umbrella, or to separate them

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out. So I'm going to talk to you
about the pros and cons about

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putting them all under one or
the how to how you do it, or

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separating them out and why
you'd make that decision for

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your own. Now, it doesn't have
to be a private equity fund or a

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syndication or whatever it is,
put those terms beside. So let's

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say you've got five, four
different projects that you're

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all trying to raise money for,
and you're trying to figure out

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the best way to do it. So that's
the most pragmatic way to think

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about it, just put the terms
aside. So let's open up a

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whiteboard. Because that will
make it a little bit easier to

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explain. So let's make up for
projects. Let's say you have a a

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business that you want to raise
money for it's in the services

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sector. And I'm making this up
as we go. Number two, let's say

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you have a, a crypto mining that
you want to do. So you have a

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business that wants to do it,
it's professional services, or

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some sort of services. Number
two, you have a crypto mine that

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you want to raise money for
number three, you have a an

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apartment building.

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And just for fun, we're going to
make one also in real estate

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just so that we can talk about
that a little bit more

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extensively. So then let's say
we've got a triple net, which is

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you can think of like fast food
restaurant or something like

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that. So we're gonna pay is all
of the operating expenses of

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everything. So you've got these
four different business lines

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that you all want to raise money
for. But you need different

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things, let's say each one needs
just first, let's say each one

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needs one a million dollars,
just because each one needs a

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million. So you can either do
what $4 million arrays, which

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might seem like the easiest
thing to do, right? So you would

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have your entity your investment
entity here. And it would have

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all four projects that you are
raising that $4 million for.

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Now, you could do that. But I
want you to think of also or

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actually let's talk about the
the other alternative. Or you

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could have four different
entities that people invest in

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to

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write each for a million. And
just because we can, let's say

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you also have this one where you
have the option of an entity,

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just a real estate, one that
also invest in both of them.

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That's also a reasonable way to
shape it. So those are sort of

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the three different structures
that you can think of. Now the

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very first thing I like to think
of when I'm putting together any

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kind of deal is my founders
investment theory. Again, if you

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need to watch it, I've got
videos on here that describe

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founders investment theory, but
essentially what it is, is you

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can think of it as that story
that makes you why somebody

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should invest in you, right. So
why somebody should give this

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money. And so if you put
yourself in the thought process

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of what an investor would be
hearing is that that would be

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the way I would think about it.
So if I was trying to pitch this

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first deal, right if I was
trying to pitch this $4 million

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he'll, then I would have to go
to my investors and say, look,

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I've got a conglomerate, I've
got four different things that I

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that we're going to invest into,
and you're gonna get

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distributions in these four
different ways for these four

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different business lines, you
can do that, but it's going to

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be kind of confusing to an
investor. Why four different

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things? I mean, you've got
things all over the map here,

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don't you specialize in
anything, you know, what's

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special thing are you bringing
to the table here, it's gonna be

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a really real big challenge to
raise money, raise $4 million

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for four totally different
things, or at least three very

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different things. And two of
those things are fair, two, new

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two things are somewhat similar.
Or you could go to them and say,

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look, I've got, I've got three
investment vestments that I'm

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looking to raise money for. One
of them is a business is a

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services business, and you're
going to get a piece of the

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equity. But we're going to do
that on you'll have an option to

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convert it into the prefer into
the that into it, because we're

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going to pay you a fixed
percentage of 10% a year. And

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then after two years, when we've
shown we're successful, you can

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convert it into real equity into
the business. It's a great

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business, here's what it does.
The second thing that I'm

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raising money for is a crypto
mine, and here's how it makes

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money. And you're going to
immediately own equity in that

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business and just be getting the
profits off of what what we've

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invested. And we'll have, we're
also raising money for an

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investments. Now we
diversification is important. So

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we're going to do something
that's kind of unusual, we're

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going to invest in an apartment
building, and we're going to

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invest in this fast food triple
net. And the reason that we're

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doing that is because should
something happen in the economy

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in these uncertain times, we
want to be able to balance and

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make sure that you know, you're
always making money. And so if

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fast food suddenly stops making
money at a at a reasonable rate,

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if the appreciation and just
isn't happening, you know that

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that apartment buildings still
gonna go up. Or if you know

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that, because of some new laws
about rent control, or whatever

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it is apartment buildings start
to stagnate, we've now got this

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fast food business that's going
to carry that load and make sure

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that you have a good investment.
So at the end of the day, you

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have a nice balance between two
different types of real estate

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that are just ultimately going
to make your portfolio more

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valuable. That would be how I'd
pitch it. In that scenario, in

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the fourth version, over here,
it separate them out into

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individual things, you just talk
about apartment buildings and

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triple nets in a different way.
Now, obviously, the number two

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and number three way is the
easiest way to pitch a pitch.

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And it's probably the way that
you're going to be most

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successful. So I would probably
recommend that almost always

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you're going to separate them
into distinct different units.

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Now, sometimes you will have
distinct units within one

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individual investment. So you
could in your business services,

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say look, we have two different
mechanisms here. So in this

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business, let's move this off
here. In this business, that's a

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certificate, we've got two
different ways of paying you and

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one is a Class A preferred. And
one is a class. A common and

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what that means to you investor
is that the class a preferred,

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they're going to get paid first
no matter what. So they're

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always getting paid. But they're
only getting paid 10%. Right. So

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even if this company starts
making a trillion dollars per

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unit per, per share, you're only
going to get 10% of the money

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that you invested on top of it.
So you're going to be making

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that return. Why if you think
this is a great business, maybe

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you want to come in along this
class a common now we're not

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going to pay out a preferred
return at all, we're not going

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to pay 10% There's no no
guaranteed income, it's probably

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not going to pay anything out
over the next two or three

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years. But you know, we're
planning on doing or planning on

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going public in in three years.
And you've seen boy IPOs go and

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you'll probably all that equity
is going to be equity you're

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going to be carrying in to the
IPO before it even happens. So

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that means you're going to get
this huge amount of appreciation

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in the value of the company and
then you can sell the stock at

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that point. So those are the
kinds of pitches that you would

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do. Now here you've got two
different classes of shares. So

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sometimes the point is, is that
you'll have something that is

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two very distinct kinds of
investment. But that's under

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what that still goes under one
umbrella. So we'd still net

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probably put this under one
offer, as we call it.

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Insecurities language. So I hope
that helps describe, well, why I

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would separate these into
multiple classes like this into

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I mean, into multiple
investments, multiple offers

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different things entirely, is
the reason again, is just that

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you want to make the story as
clear as possible to investors.

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Now, here's an asterix. Just a
disclaimer, yes, I'm a real, I

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am a syndication attorney, I put
these offers together, and I do

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get paid more by splitting them
out into four parts. But at the

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end of the day, your investors
are probably the ones paying my

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fees. They're the ones that you
get reimbursed for it. But also,

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it's gonna be that much easier
for you to raise funds for. I

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always leave the actual decision
making completely up to my

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clients, if they want to do it
like this, with this $4 million

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raise. Absolutely, I'd be happy
to write it. We can make it as

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good as possible and give you
every opportunity to be able to

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raise that $4 million. My advice
if you want an easier time

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raising money would be to split
it up into four units or three

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units. So I hope that helps
describe what you do in those

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situations where you've got four
different things you want to

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raise money for and they're all
very different. My name is

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Tilden Moschetti. I am a
syndication attorney with the

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Moschetti syndication Law Group.