When we create a syndicate for our clients, we always set a minimum and maximum amount of the offering. The target raise should be somewhere in the middle of the minimum and maximum. The minimum is just what’s needed to close the deal; the maximum is the target raise amount plus a cushion in case things are discovered after closing that cost additional money or in case improvements cost more than expected.
Assuming a 90-day escrow period, syndicators often only have 4-6 weeks to raise the money and close after they complete their due diligence and have their offering documents in hand. We give our clients up to one year to raise up to the maximum amount. Simply raising after closing isn’t a red flag, but you should ask what has been accomplished since closing to see if the deal is still on track.
