(This is the second of our two-part examination of the benefits of hiring a Managing Broker-Dealer to handle capital raises. Part Two outlines the remaining seven benefits, Part One explained the first six. Both will be able to be found under “TOBIN Tutorials.”)
In Part One of this two-part examination of benefits provided by Managing Broker-Dealers we discussed 1) Regulatory Compliance, 2) Financial Expertise, 3) Oversight and Protection of Your Internal FINRA-Licensed Sales Force, 4) Protection of Your Unlicensed Internal Sales Force, 5) Outside Distribution Networks, and 6) Due Diligence. Part Two investigates promotion of your offering, management of individual transactions, vetting investors, providing confidence to RIAs, documentation and record-keeping, ongoing due diligence and post-offering services. Each of these are very important advantages performed by Managing Broker-Dealers.
Part Two investigates promotion of your offering, management of individual transactions, vetting investors, providing confidence to RIAs, documentation and record-keeping, ongoing due diligence and post-offering services. Each of these are very important advantages performed by Managing Broker-Dealers. It’s our job to ensure your strict adherence to regulations governing all the subjects above, but it is also our job to make this process efficient and time effective. TOBIN receives accolades for how easy we are to work with and how we don’t implement unnecessary processes. Let’s look at the final seven advantages of using a Managing Broker-Dealer.
7) Marketing and Sales Support: Managing Broker-Dealers assist with marketing the offering to potential investors, often instructing sellers of offerings about what they can say, and what they can’t say, about an offering. With this process, Managing Broker-Dealers enhance sales support by reinforcing with brokers how to discuss the offering with potential investors and how to answer any questions potential investors may have.
8) Providing Transaction Management: Managing Broker-Dealers may manage the entire transaction process: preparing and reviewing offering documents; managing escrow accounts and coordinating with other professionals such as attorneys and accountants. The Managing Broker-Dealer serves as an on-going and continuous check point throughout the offering which keeps the offering on track by circumventing minor details that could potentially disrupt the offering.
9) Vetting your Investors: As your Managing Broker-Dealer, TOBIN conducts a rigorous review of each and every investor, making sure to check all of the boxes regarding the customer identification process (CIP), Anti-Money Laundering (AML), investor accreditation, investor suitability and even serving the retail investor’s best interest. We execute the review, maintain the records and communicate the completion of each review for our client. All of this helps to protect both the investor and you, the issuer/sponsor.
10) Providing Confidence to RIAs: Registered Investment Advisors (RIAs) are, more and more, allocating private placements to their clients’ portfolios. But in order to be confident in the offering, RIAs are often demanding that a private placement offering be overseen by a Managing Broker-Dealer. This gives the RIAs confidence that full and extensive due diligence has been conducted on the offering and that FINRA and SEC standards have been applied in the structuring and sales processes of the offering.
11) Documentation and Record Keeping: Any offering generates a massive amount of paperwork. Every interaction has to be documented and retained in the event of a question regarding transactions or if issues arise that may spark an investigation. All data about the launch, approval and each individual sale associated with your capital raise is collected and housed for easy retrieval when needed in the future. If issues do arise, all records could be investigated by the SEC, FINRA or state authorities. It is always in the best interest to be judicious and detailed in the record keeping of any offering. Your Managing Broker-Dealer does just that.
12) Ongoing Due Diligence: Managing Broker-Dealers are encouraged by their regulator, FINRA, to conduct ongoing due diligence on your offering. And TOBIN does. This provides comfort to investors that the progress of the offering continues to meet the expectations established at the beginning of the offering and helps to ensure that the offering materials and related facts remain current in the offering.
13) Post-Offering Services: After the capital raise, Managing Broker- Dealers can assist with investor relations, regulatory reporting and other post-offering requirements. These services are sometimes provided by Managing Broker-Dealers and may also be performed by in-house staff. The advantage of these actions being performed by a Managing Broker-Dealer is that they will be executed with the utmost care and consistency, just as the offering is – with dedication to detail.
We believe that your sponsor’s and issuer’s reputations should never be at risk, we strive to make sure the smallest details are executed as required by the rules and regulations. But we also know that many Managing Broker-Dealers execute poorly, delaying offerings and not keeping promises of deadlines to be met.
When you engage TOBIN, it’s our job to ensure that your offering is compliant and smooth. We anticipate, and pivot to avoid, glitches in offering processes and procedures.
We have spent years building a strong reputation of responsiveness and efficiency, we are very careful about any misstep that could potentially disparage our reputation. . . or yours.
TOBIN can help you make every capital raise successful and compliant. Please call us if you have questions about our Managing Broker-Dealer services. We’ll answer your questions and give you our assessment of how we might help make your private capital raises run much more smoothly.
Warm regards,
Justine