Tilden Moschetti: is the project
that you're working on right

now? A syndication are a fun
meaning it's a security, or is

it a joint venture, we're going
to look at the differences

between the two and help you
decide which category you're in.

My name is Tilden Moschetti. I'm
a syndication attorney with the

Moschetti syndication Law Group,
your project that you're working

on right now or that you're
thinking about working on right

now, it's important to decide if
it is a security, or if it's a

joint venture, it's a fork in
the road, and whichever one it

is, is going to dictate some of
the rules on which way you go

forward. So let's talk about
what a security is. First, a

security is most well defined in
a very important Supreme Court

case, that it's the case of us,
versus Howey. Or I'm sorry, sec

vs Howey. In that case, what was
decided was a security is

whenever there is a offering, or
that is basically a collection

of money, with the purpose of
making more money, and relying

on the services of a third
person in order to make that

money. So that's what a security
is. So for example, if you were

to put together a real estate
syndication, where you are

getting investors into it, and
asking investors to come in, and

your investors are taking a
passive role. So you're doing

the work of putting the deal
together and doing the asset

management, and your investors
are just giving you money, and

maybe voting on a few minor
things. But you are the main

decision maker, that is a
security because they're relying

on you, in order to make the
money in the project. A good

example of a project that
wouldn't be a security might be

something like a charity. So
people coming together for a

common purpose to build a
building, perhaps. But the

purpose is not to make money,
it's to do it for a church or to

do it for a boys club, or
whatever it is, that may not be

a security, it might be because
it wouldn't be for the purposes

of making money. In this
context, when we're comparing

and contrasting with a with a
joint venture, the difference

here would be if it's a
security, it would be back

coming together for a third
party. Now, if you and Team A

and Team B, we're coming
together in order to pool funds,

and build a building perhaps.
But you all are like integrated

integrally related. So you're
doing all the finance work,

you're making sure that the deal
comes together, you're making

sure that the rents get paid all
those sorts of things. And Team

A, they're doing all of the
marketing work and talking to

investors and doing those sorts
of things. And TMC is doing the

actual construction, and it's
doing this and it's doing that

that's coming together. But
you're not none of you is

relying on the services purely
of a third person, none of us

pass up, you're all very active.
In that situation. It's a joint

venture. Now, the difference
here is important because if

it's a security, then you
follows under security's rules.

If it's a security, it must
either be registered with the

SEC, or fall under one of the
exemptions, most importantly,

Regulation D, which is what my
firm practices law with. If it's

a joint venture, it is not a
security, but you will need to

do a joint venture agreement.
Now most of the time, those

joint venture agreements will
take place outside of the

securities context. For example,
my firm doesn't work on joint

venture agreements. We can talk
with you about a joint venture

if it's in relationship to an
actual security offering as

well. But if it's just you guys
working together and working as

a as a team collectively, to
make this venture go forward and

make money from that. It's not
part of securities, it probably

falls under local laws as well.
So you have to you would be well

advised to speak with a local
attorney to make sure that it's

drafted in such a way that it's
protecting all of your interests

and negotiated appropriately. So
that's the difference. If it's a

security we're talking essay See
registration or exemption, such

as Regulation D, if it's a joint
venture, it's probably falls

under local law is not a
security, but you'll want a good

joint venture agreement so
everybody knows what their roles

and responsibilities are. I hope
that helps. My name is Tilden

Moschetti. I'm a syndication
attorney with the Moschetti

syndication Law Group. If we can
help you put together a Reg D

offering, we'd be happy to talk
with you and see what we can do

together.