The Preferred Return is Priority, Not a Guarantee
from Syndication Attorney Field Notes with Tilden Moschetti Hosted by Tilden Moschetti
In a Regulation D syndication, the way you explain your deal economics matters. Sponsors frequently blur fees and the promote, or mistakenly label the preferred return as a 'guaranteed yield' to attract investors. This field note explores the tension between pitching an attractive deal and accurately describing equity risk. We break down the four buckets of syndication economics—fees, preferred return, return of capital, and the promote—and explain why the preferred return is a description of priority, not a promise. Tune in to learn how to align your pitch deck with your Private Placement Memorandum (PPM) and Operating Agreement for a clean, professional presentation that builds investor trust. Also see: Real Estate Syndication Fees — https://www.moschettilaw.com/real-estate-syndication-fees/ Note: This episode's audio is generated using AI voice cloning technology based on Tilden Moschetti's written work. Watch the video on YouTube: https://youtu.be/adWBi29iGbE
Embed this episode
What this episode covers
Calling a preferred return a 'guaranteed yield' is a common pitch deck mistake that turns an equity position into a debt promise. In this field note, we break down how to structure and explain your deal economics clearly using the four buckets of syndication.
Chapters
No transcript yet.