b'How to Legally Raise Private MoneyMaterial Facts and Informed ConsentAs an issuer of securities, you have an obligation to ensure that the in-vestors have all material facts necessary to make informed consent, prior to making their investment decision. Thats what your offering documents should provide. Part of your offering materials should be a disclosure doc-ument, required in most cases, that describes the risks of the investment. A good disclosure document also provides an insurance policy for you, as it allows investors to understand and assume the risks of the investment. Under securities laws, you have a duty to not make misrepresentations or provide misleading facts, nor to omit any material facts an investor wouldfindimportanttotheirinvestingdecision.Thisincludesfacts about you and your management team as well as the investment. Inves-tors might not want to invest with someone who has recently declared bankruptcy, lost property in foreclosure, been convicted of a felony in-volving dishonesty or loss of investor funds, or have had other deals go bad where investors lost their money. If you dont disclose these things and an investor finds out later, he or she may have grounds for rescission (to request a full refund of his or her investment)claiming you omitted material facts; or you could be prosecuted for fraud by a regulator or in a civil court action brought by a disgruntled investor. If you have fully informed your investors and one of the things you warned them about causes the investment to fail, you have much less risk of being held personally responsible for it, unless you did something willfully wrong or illegal to cause it. In that case, no limited liability en-tity will protect you from criminal or civil prosecution, nor will it protect your outside assets, all of which may become subject to attachment or forfeiture. Understand How Securities Laws Relate to Your OfferingA basic understanding of securities laws and how you can use them to your advantage is necessary to becoming a successful syndicator. People who dont follow securities laws when using investor funds are breaking the law and putting the entire investment at risk. Always hire securities counsel to help you structure your offering and company, to select the appropriate set of legal rules you will need to follow while raising mon-ey from private investors, and to draft the appropriate legal documents. 6'