Just because you may be an accredited investor doesn’t mean you’re a sophisticated investor. Many investors may not possess the knowledge to read and truly understand the information presented in offering documents such as private placement memorandums or registration statements. In this podcast, Mike Brette from Small Cap Equity Advisors explains exactly what information these documents contain, what investors should look for specifically, and more importantly, the red flags you need to be aware of so you don’t make any avoidable bad investment decisions. Always remember the golden rule of offering documents: they function as disclosures, and are not meant to be marketing materials… so if they’re “salesy”, beware!
Listen to “How to Read an Offering Document – Be Aware of These Red Flags” on Spreaker.
Regardless of the crowdfunding vehicle issuers use, you would be surprised about the number of accredited investors who don’t actually understand the contents of offering documents. Even more shocking: many don’t even read them before investing! Why? Well, first off, they’re boring. Secondly, the information can be intimidating. Thirdly, pro-forma and projected financials leave many with a “deer in the headlights” reaction. But in reality, it is crucial that these documents are completely understood.
As Mr. Brette mentions on the podcast, the main goal of these documents is basically to explain who you are, what you are doing, what the risks are, etc… in other words: all terms of the deal should all be spelled out in the document so when you as an investor sign off on a deal, you know exactly what you’re getting yourself into. (and how you’re getting out too!)
Remember: there are no guarantees! After listening to this podcast, you will know exactly how offering documents are written, what they contain, how to read them, and when to RUN from those that contain red flags. An entire course in just 40 minutes! Then if you still have questions or comments, you can contact Mike by phone at 951-236-8473, by email here, or you can visit his website at InvestorAcquisitionAdvisors.com.
ABOUT OUR GUEST: Mike Brette
Michael N. Brette, J.D. advises clients on a wide variety of transactional business matters from startup consulting, Equity Crowdfunding, 506(c) private placement, REG A+ offerings, capital formation, going public, arranging capital for publicly traded companies.
Mr. Brette has published two books Asset Protection Planning and Raising Capital For Your Business ( Amazon ). He has appeared on more than 450 TV and radio shows discussing various business and financial topics. He has a Juris Doctor ( law degree ) for 42 years and is listed in Who’s Who in the World and Who’s Who in Industry & Finance.
IMPORTANT!
All information provided is for informational purposes only. Mapable USA is not a registered broker-dealer, funding portal, or investment advisor. This information presented on this website/podcast is not intended as legal or investment advice for anyone to make an investment in any particular company and is not intended for any companies to rely on this information to form an opinion to go public or not to go public or to do any type of offering of securities. Any information presented is not an offer or solicitation to purchase or sell any securities or financial products. None of the information on the Mapable USA podcast or website takes into account any individual person’s personal objectives, financial situation, needs, or particular circumstances. You must check with a securities attorney to find out if an offering is for you, or if you are going to be in the business of selling any type of securities, you need to make sure you are following your state and federal legislative law so you do not get into any troubles. Do not use the opinions as stated on this show as any way to form an opinion as what is wrong or right or what could be done for your business or as an investor. Mapable, LLC recommends you obtain your own financial, legal, and taxation advice before making any financial investment decision.
Ron – your mike Brette podcasts are always great. This one in particular. Great info, and much needed too!