Clem TurnerSecurities Attorney
Determining which regional center will receive your hard earned $500,000 (assuming their Project is in a TEA) is a very personal choice. The criteria that you might use to make that determination may be very different than another investor''s. For instance, you may be interested in a particular industry or a particular region of the United States. No matter what type of project you are considering, I have some very general advice: 1) Thoroughly review the Private Placement Memorandum (PPM) and Business Plan of all projects you are considering. If there is no PPM and/or Business Plan, you should look elsewhere. 2) Thoroughly review the other corporate documents provided by the regional center, for instance the Limited Partnership Agreement or Limited Liability Company Operating Agreement, Subscription Agreement and Escrow Agreement. If these documents are inconsistent with the PPM and Business Plan, you should look elsewhere. 3) To the extent possible, research the claims made in the PPM and Business Plan. Confirm the track record of the principals, discuss the claims made with independent people in the same industry as the Project that you know and respect. This is very basic "due diligence" and is essential to making a decision with confidence. 4) Ignore any claims or promises that are not written down in either the PPM, the corporate documents or a side letter. If a claim is only made verbally, you will have a difficult time proving that you relied on it, should you have reason to complain later. 5) Do not ignore your "gut." Sometimes when things are too good to be true, they are. Good luck with the process, I wish you the best!