EB5 Private Placement Services
Prevail Capital can act as a Placement Agent for your EB-5 offering. A placement agent provides many services for both the EB-5 issuer and the prospective EB-5 investor.
A placement agent may add investor confidence to your EB-5 offering by providing peace of mind that due diligence has been performed in accordance with regulatory requirements.
Engaging Prevail as your EB-5 Broker Dealer may be a valuable asset and value added service for EB-5 sponsors. The benefits of an EB-5 broker/dealer are far reaching and the cost minimal when factored into the effective cost of EB5 financing.
Prevail’s EB-5 broker/dealer services can be segregated as below, these services provide a staged approach for clients:
Step 1: Pre-Engagement Viability Analysis
The first stage of our services are to understand the business, financial and immigration viability of the offering from the sponsor’s perspective and from the EB-5 investor’s perspective who seek US residency in combination with a suitably structured investment.
Involving Prevail at the outset of your offering to work in tandem with economists, business planners, securities and immigration counsel can help your project to be structured for success and save costs otherwise depleted on potentially non-compliant documentation or structure.
Compliance can be broadly split into 2 categories, documents compliance and the act of placement (offer and sale). Although a sponsor may be able to create a compliant documents package, they may have far less control over the EB-5 investor placement process and the reliance on exemptions from registration, representations being made or materials precluded.
Step 2: Due Diligence
Following the initial viability study, the second stage is a broad in-depth due diligence analysis on the offering. Performing due diligence in conjunction with EB-5 financing is a very broad assignment, the offering must be scrutinized closely to ensure adequate disclosures are provided.
As is typical for a registered broker-dealer in a transaction, the Firm would implement due diligence on the parties, the Issuer, the project, the borrower (where applicable), and on the transaction in general. Due diligence must then be completed from an EB-5 perspective to ensure the project will satisfy the USCIS requirements.
Information needed for review by Prevail could be expected to include some or all of the below elements:
- Intended Use of Proceeds of the Offering – Reasonable investigations of the use of proceeds detailing those items that comprise the capital stack of the offering.
- Issuer and Management – Reasonable investigations of the issuer and its management concerning the issuer’s history and management’s background and qualifications to conduct the business.
- Issuer and Prospects – Reasonable investigations of the issuer’s business prospects, and the relationship of those prospects to the proposed price of the securities being offered.
- Accuracy of Program Claims – Reasonable investigations into the structure and material statements of the program, including whether the program can meet its stated objectives.
- Issuer’s Assets – Reasonable investigations of the quality of the assets and facilities of the issuer.
Step 3: Placement Agent Service
Prevail Capital is in a unique position to conduct its EB-5 business pursuant to regulatory requirements, and in doing so help promote further compliance and clarity to the offering and sale of EB-5 private placements on behalf of Issuers and Sponsors.
We evaluate the financial suitability of the investment for the potential investor and help evaluate eligibility for participation in the EB-5 program. Prevail Capital is responsible to promote the integrity of the investment process, including providing answers to investor questions, reviewing the transfer of funds into escrow, and maintaining investor records. This is all done in a manner that is fully compliant with all applicable regulations.
Some examples of the services provided are:
- The solicitation, offer and sale of EB-5 securities
- Dissemination of Offering Materials
- Suitability determination for each investor
- Know Your Customer (risk tolerance, time horizon etc)
- Know your Customer Suitability
- Accredited investor check
- Verification of source of funds
- Anti-money Laundering Procedures / OFAC (as applicable)
Comprehensive analysis is performed and each client/case is individual and unique, please contact us to help with your specific needs.