Understand the security and offering path
Identify equity, debt, convertible, fund interest, or another instrument and determine the registration or exemption relied upon.
AI KNOWLEDGE · INVESTMENT PROJECTS
Investment opportunities
Review project structure, disclosures, eligibility, valuation, liquidity, conflicts, and the possibility of complete loss before proceeding.
Core knowledge
Review ownership and financial evidence
Examine capitalization, financial statements, cash needs, use of proceeds, related-party transactions, and material liabilities.
Plan for illiquidity and loss
Private investments may be difficult to resell, provide limited disclosure, and result in partial or total loss.
What to verify
- Independently verify the issuer, management, corporate records, bank destination, and beneficial owners.
- Review offering documents, investor eligibility, transfer restrictions, voting rights, dilution, fees, conflicts, and exit assumptions.
- Treat projections as assumptions; compare them with historical results, customer evidence, and third-party records.
Common traps to avoid
Guaranteed return or urgency
Promises of high or guaranteed returns, pressure to act immediately, or claims of risk-free private investment are serious warning signs.
Unregistered salesperson
Verify the background and licensing of anyone recommending or selling the investment through IAPD or BrokerCheck where applicable.
Missing downside disclosure
A pitch that emphasizes upside while omitting dilution, liquidation preference, debt priority, litigation, or cash burn is incomplete.