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Is there a limit to how many investors I can bring in to that, in general, even if they’re all accredited? Yeah, it’s 2000, that’s gonna be an issue. The other thing we should talk about when you’re doing a 506 C, not only do you have to limit yourself to accredited investors only, you have to take what we call reasonable steps to verify that they’re accredited. That typically means you’re, you can’t just take their word for it, right?
They’re not, they’re not, we’re not going to give them a questionnaire where they just check a box, and we’re good, somebody is going to have to be reviewing tax returns or assets, depending on how they’re how they’re claiming to be accredited. What almost all of our clients do, and really we insist on is that we hire a third party verification company. And they’re really, they’re relatively inexpensive, they’re literally 5060 $70 An investor. And they will handle that whole compliance nonsense for us.
And they will go and upload W TOS or upload tax returns or look at banks that whatever it is that they need to do to verify that they’re accredited, they will do and so there’s a couple of outfits out there, but we need some kind of verification company that we can simply say, Hey, Oh, you wanna invest, you send us 100, grand, or whatever, please now, talk to so and so.
So that you can then provide whatever documentation the easiest way is, is a CPA verification letter, if you can get their CPA provided a lot of CPAs are pushing back because they don’t want the liability. But theoretically, a CPA or a letter from their CPA just says, Hey, I do this, this person’s taxes. I know he’s accredited, they make more than 200 grand a year, and they can just sign that letter that’s good.
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If not have them go through these outfits, they end up having an attorney review. And we have an attorney letter that comes back to us, we don’t get to see their financials. So that’s one of the selling points that you can tell your investors, especially if you don’t know them, we’re not going to have access to any of your financial it’s going to be a third party in a train is going to review it.
And we’re just going to get a letter from the attorney saying, Hey, we’ve we’ve done the process we’ve verified and I’m telling you, Johnny is an accredited investor. Let’s Marissa, you and I are both part of like really, really high level masterminds and people that have a lot of influence. And so I get people that come to me frequently and go, Look, man, I’m not a deal finder, I’m never going to go out and find deals, I’m never going to manage deals, I’m never going to manage employees, but I have a lot of influence.
And I can sway people to invest in deals with you, is there a way I can carve out some sort of equity with you? If I bring people to the table? How do I structure a relationship like that? You can’t, there’s no way around it. The only way you can do that as if that person that’s referring you, the investor is a is either a broker dealer, or is a registered investment advisor that hangs their license under a broker dealer.
So you’re ultimately paying that that referral fee or that commission to the broker dealer company, the way that most people don’t want to get around because it sounds like it’s something nefarious, but the way we avoid let’s put it that way, the way you avoid becoming or being considered a broker dealer is to either join the sponsorship team so I come alongside both pasting Cody and I’m now I’m Marissa is now the third co sponsoring this deal.