Wholesalers and sponsors:

I would attach the spreadsheets if possible. Email me if you like a free copy.
I have  a 12 month spreadsheet of what it would cost to raise about $18,000,000 on a GOOD Reg D Offering.
I  also have what I have termed a pecking order and expense to put a reg d offering together.
I have taken into account every item I could think of to make a wholesaler successful thus making the sponsor successful in the raise.
Start up costs are relatively high but of course come down as sales go up.
I have segmented every account: Salary, T&E etc. for easy reference points.
Some people have looked at this and thought I was out of my mind, either way too low or way too high dollar wise.
I think these are very reasonable in today's economy.
 
A sponsor must remember that they are up against thousands of offerings on the street today outside of just regular stocks bonds and mutual funds. They must spend money to stand out from the crowd.
 
Broker Dealers, RIA, Money Managers, Family offices etc. must do there due diligence on the a product and a sponsor to figure suitability for their firm.
This sometimes can take months and still get no results on a final decision.
After  a selling agreement is signed, the work has just begun.
So many sponsors think that once it is signed, sub docs and checks will begin immediately.
 
A wholesaler must now get into the offices and meet the corner office guys, identify who will do alternative investment and then convince them why their  offering is as good if not better than the one they already have their clients in.
This can take a long time because the broker, RIA, money manager, Family office must ......
 
1. Make a decision if they are interested  ...  why this new product as compared to what I am using presently.
2  Check portfolios to see if applicable.
3. Sell the client on need for new investment or reallocation.
4. Find the money to invest, IE. sell something  in port to create funds for investment unless new funds arrive.
5. Wait for commissions, warrants or trail.
 
 
Most sponsors fail for various reasons, even with a great offering. Here are a few reasons why.
 
1. They are totally underfunded for marketing (T&E) and can not sustain the start up pain.
2. They will not or can not pay for a wholesaler. They expect a wholesaler to eat what they kill.
3. They pay them selves first, broker second, managing broker dealer third,  investor forth.
4. They won't pay warrants, incentives, dinners, lunches, seminars for brokers.
5. They do not pay the managing broker dealer to help build a syndicate IE. retainer start up costs.
6. They will not invest in third party due diligence.
7. They think that a wire house or LPL will jump on board not knowing that they want at least a 3 year track record to even look.
8. They do not have an NAV clause to include money managers,  RIA and family offices.
9. They do not realize that an RIA may have a BD that needs to approve a commission deal back to new selling agreement.