Marry Money & Opportunity
A Way To Explain What A Transaction Catalyst Does For A Living!
Have you had the challenge of explaining to friends and family the role(s) you play in your career?
How best do I explain the game of “Marry Money and Opportunity” in the world of alternative (non-traded) real estate securities?
No analogy is perfect—much like most of life—but the world of opaque security transactions does mirror much of what goes on in a marriage—traditional or otherwise!
LAWYER ROLES
PRE-NUPTIAL AGREEMENT – Similar to the letter of intent, it only has value IF the parties move forward with the relationship.
WEDDING VOWS—Think of the Agreement of Purchase and Sale; both address the intentions of the parties.
WEDDING—Similar to the closing of a real estate transaction; rights and privileges have transferred and are recorded with the municipality.
RECEPTION—Rarely do the parties get through a reception without significant debt! Ditto on the purchase of real estate; it comes with debt obligations (which the lawyer negotiates and documents).
HONEYMOON—The security document brings in equity investors; they get to go along on everything going forward!
WHERE IS EVERYONE ELSE
FATHER OF THE GROOM—Like a sponsor of an offering, the father of the groom wants MANY grandchildren (AKA—ongoing sales to investors).
GROOM—The wholesaler wants access to the registered representative (prospective bride).
FATHER OF THE BRIDE—The regulator, FINRA, plays a loud and strong role, yet seems often to function without a clue what is really going on.
MOTHER OF THE BRIDE—The broker dealer only wants the best for their children (registered representatives) and will “appoint” someone in the family—the due diligence officer - to ask around about the proposed groom.
INVESTIGATOR – The father of the bride (FINRA) mandates even further investigation of the family of the prospective groom (particularly the father/sponsor).
Unfortunately, the third-party due diligence analyst research reports come back reading like a STD blood test. It does help to know your intended is not bringing into the marriage unwanted disease (e.g., bankruptcy, securities fraud, or criminal conviction).
But does any of this indicate if this is a good and competent long-term relationship?
MARRIAGE LICENSE – The marriage license is a requirement of the state, but there are no limits on the vehicle you drive, at what speed, or how well it needs will be maintained! An appraisal is required by banks, but at best it is a moment-in-time snapshot of value, and it does not reflect how THIS borrower will approach the investment in the future.
MARRIAGE PLANNER—Things go smoother in life when you have someone—who has been there before—organizing your process or event. The right managing broker-dealer knows everyone in the industry and helps in structuring the sponsor and offering, introducing the opportunity to the market, and assures compliance with the rules of the regulators. It is not required to have a marriage planner or a managing broker dealer. The chance for success does improve with their expertise.
MARITAL COUNSELING (PRE-AND-POST)
Great advice is readily available. Good advice, which the receiver—in marriage or in real estate securities—absorbs and acts on accordingly, is in rare supply.
Actionable good advice, coupled with hands-on support, is the role I play in my world of “Strategy is the Game of Chess."
BOTTOM LINE.
It can be helpful to take a problem and reconsider it in a different context.
You may want to consider developing an analogy like “the marriage of money and opportunity” above to help explain what you do to others not in your field.