The work, claim by claim
- The comparison nobody had run. What was known: an investor deck selling a lot-sale subdivision, attached whole as C exactly as the sponsor brought it. The question: whether the sponsor's own underwriting model, built for the same raise, described the same business. It did not; the model underwrote a small resort. What it changed: no raise material could go external until the business model was singular, because a lender reading both would ask which one was real and would be right to walk if the answer was both.
- The fund named in the deck. What was known: a technology-oriented fund named as a backing entity. The question: whether it existed as a registered, capitalized fund. I searched SEC EDGAR Form D filings, the Investment Adviser Public Disclosure system and the state's business-entity registry under the name as it appeared in the deck and found nothing. A private fund under Rule 506(b) can lawfully carry a thin public footprint, so absence from the registries alone does not prove fabrication. What makes fabricated the right word for planning purposes is that the deck's specific claim about this fund's role and backing could not be corroborated through any channel a fund making that claim would ordinarily appear in. What it changed: any credibility the deck borrowed from that name went to zero, and the deck needed a rebuild before a real lender saw it.
- The lender's letter of intent. What was known: a senior lender had issued a letter of intent months earlier, the anchor the whole financing plan leaned on. The question: whether it was still live. I asked the lender directly and checked the county record. The window had closed, and no deed or closing instrument had ever been recorded against it. What it changed: the one document the sponsor treated as secured capital was not capital.
- The investor entity. What was known: a proposed special-purpose entity slated to fund a meaningful share of the equity. The question was not how much it was offering but whether its principals could be confirmed to exist and to be capitalized, because a number on a term sheet is not capital until its source is. They could not be confirmed, and the evidence pointed to the entity being tied to the same outside financing contact the sponsor's own team had already flagged. What it changed: the equity structure could not be relied on as written, however clean the percentages looked.
- The compensation. Described above. What it changed: a term the sponsor had presented as alignment became the first line of the kill list.
- The counter. What was known: three documents dead, the land still real. The question: whether a structure existed that captured the asset's value without leaning on any of the pieces that had just failed. The counter replaced the sponsor's package end to end. A modest cash floor, staged across the start of the engagement and a future lender close. A minority direct equity stake in the project entity itself, vesting against milestones rather than granted up front. A separate placement engagement run through a properly licensed advisor, with Prince Capital proposed as that advisor, paid a standard success fee in cash out of closed proceeds with no conversion feature, which is the test any placement route has to clear to be different from the paper we refused. Information rights and consent rights over major decisions, because a minority stake with no visibility and no say is a promise, not a position. A cap on the developer fee the sponsor's side can charge the project. Governing law tied to the state where the asset and the county process sit. One standard term left out on purpose: a liquidation preference, because this is a minority position in a sponsor-controlled project, not a control investment, and stacking a preference on top of everything else would have turned a counter meant to keep a workable relationship alive into the same boilerplate pile that had sunk confidence in the sponsor's own paperwork. I also rewrote the financing request itself, as an investment memo with the senior ask sized against the appraisal, and routed it to qualified capital sources.
- The kill list. What was known: the counter was outbound. The question: which future fact should end the engagement regardless of how the relationship felt that week. I wrote nine conditions down before the next conversation instead of during it. Eight watch the sponsor: a second refusal of the protective terms, the letter of intent confirmed dead with no replacement, the investor entity confirmed tied to the flagged contact, the two underwriting narratives still unreconciled, the fund still unverifiable after a direct request for registration evidence, the holding entity not in good standing, the county replat missing a named milestone by a stated date or drawing a second staff denial, and any insistence on paper as part of our compensation. The ninth watches us: no engagement letter executed by a stated date, with a cap on unpaid scope delivered before then. What it changed: continue or stop became a checklist decided before the pressure existed, not a feeling during it.
How to check a fund, an adviser and a lender in an afternoon
Form D on SEC EDGAR, under the fund's exact name and its plausible variants, for the exempt-offering filing any capitalized private fund makes. The Investment Adviser Public Disclosure system for the adviser or the manager behind it. The state's business-entity registry, for the entity's good standing and the names on file. For a lender, a direct status call on the letter of intent and a look at the county recorder for any deed of trust or closing instrument against the parcel. The honest limit: a 506(b) fund can have a thin public footprint, so a negative search is ranked as unconfirmable, treated as fabricated for planning, and put to the sponsor as a direct request for registration evidence before it becomes a verdict.
A real asset does not vouch for the paperwork wrapped around it. Checking the second thing anyway is what the fee is for.
What the diligence produced
The three claims the sponsor's financing story leaned on, the source each was checked against, and the result.
| Claim in the package | Where I checked it | Result |
|---|---|---|
| A technology fund backs the raise | SEC EDGAR Form D, the Investment Adviser Public Disclosure system, the state's business-entity registry, under the name in the deck | No matching entity in any channel a fund making that claim would appear in. Unconfirmable; treated as fabricated for planning, pending evidence from the sponsor. |
| A senior lender's letter of intent secures the debt | The lender directly; the county record for any recorded instrument | The window had closed months before. Nothing recorded. Lapsed. |
| A special-purpose investor entity funds the equity | Its stated principals; cross-reference against the sponsor's own prior characterization of an outside financing contact | Principals could not be confirmed. Evidence of affiliation with the contact the sponsor's own team had flagged. |
Taken together, the three mean something no single row does: after this pass, no verified source of capital remained anywhere in the deal as packaged. That is the real finding, and it is why the counter replaced the package rather than patching it.
The register ranks every finding by what it would take to cure it. Critical means the finding alone ends the engagement unless it is replaced with a verified alternative. High means a structural change before proceeding: a term rejected, a party excluded, a document rebuilt. The county replat and the water adequacy determination sit at High rather than lower because neither can be cured by substituting a party; the whole lot-count model, the absorption schedule and the appraisal's use assumption depend on them clearing. The appraisal and well-yield check sits on its own tier because a severity rank presumes the check was run, and this one has not been.
That is the one figure in this report a reader could check, and it carries a condition. The loan to value is conservative for raw land only if the appraisal holds. Who appraised it, on what date, on what highest-and-best-use assumption, and who certified the wells at what combined yield, are the questions that would verify it, and they are exactly the questions every weaker claim in this deal was already put through. The asset is the most load-bearing claim in the package, it arrived in the same package as the fund and the letter of intent, from the same sponsor, and it has not yet been through the same check. I say so here because a base-rate read says three failed documents should lower confidence in every unchecked item in the same folder, not exempt the biggest one.
The structure, before and after.
| The sponsor's package | The counter | |
|---|---|---|
| Business model | A subdivision deck and a resort model, both live | One financeable narrative, rebuilt on verified documents only |
| Debt | A lender letter of intent that had lapsed | A senior request sized against the appraisal, taken to qualified capital as a fresh ask |
| Equity | A special-purpose investor entity whose principals could not be confirmed, backed by a fund nobody could find | A separate placement engagement through a licensed advisor, Prince Capital proposed, paid in cash on capital actually closed |
| Developer compensation | Convertible notes and subscription paper issued by the sponsor's own holding entity | A modest staged cash floor plus a minority direct equity stake in the project, vesting on milestones |
| Governance | None for the incoming developer | Information rights, consent rights over major decisions, a cap on the developer fee, pro-rata and anti-dilution |
| Governing law | Not tied to the property | The state where the property sits |
| Exit rule | A relationship | Nine written kill criteria, set before the next conversation |
Lots and keys are different businesses
A homesite community and a resort on the same acreage do not share an underwriting. Lots sell once, on an absorption curve the county's platting and water determinations set, and the senior loan comes back out of closings. Keys rent nightly, the loan comes back out of stabilized operating cash flow, and the lender underwrites the operator, not the dirt. A package that carries both is telling the lender the sponsor has not decided what he is building, and a lender who notices is right to stop reading. Two models in one package is a finding on its own.
What we kept, replaced and installed
Kept. The land thesis. The parcel, the wells and the county process are the reason the deal exists; the diligence did not find them wrong, it found them unchecked, which is a different statement. The homesite community stayed as the target once the resort model was set aside.
Replaced. The package, end to end. The sponsor did not build a bad deck out of bad faith; he built it the way most sponsor decks get built, by collecting every name and letter that had ever been offered and putting them all on the page. The faulty logic was that credibility is additive: a fund name plus a lender letter plus an investor entity felt like three sources of capital, when each was an unchecked claim and the three together were zero. Why it had to change now: the next reader was going to be a real lender, and a lender who finds one dead reference stops trusting the live ones.
Installed. A findings register, one row per claim, ranked by severity with the basis beside each, attached as A. A written kill-criteria list, attached as B, which I now use as the template on any capital engagement where the relationship is warm and the paperwork is not. A placement route that is separate, licensed and paid in cash on closed capital, with Prince Capital proposed for the role. And the habit underneath all of it: read a sponsor's documents against each other before reading them against the market.
What it costs to hold the line, and what I watch
The engagement runs on a verbal, non-exclusive basis. No engagement letter has been executed, which is why every fee and equity term in this report is described by shape rather than by number. The sponsor has asked Common Ground into every part of the project: the marketing, the financials, the analysis, the upfront real estate work, the branding and the raise itself. Read as trust, it is welcome. Read as incentive, unlimited scope with nothing executed and nothing exclusive is what a sponsor short of cash offers instead of an executed letter, because it costs him nothing, and the corrected findings have already been handed over. The posture that answers it is the ninth kill criterion and the protective terms: a date by which the letter exists, a cap on unpaid scope until it does, and a structure in which the work is paid in cash and project equity rather than in the sponsor's paper. The date on that ninth criterion has not been set yet. That is the exposure I carry, it is mine to close, and it is the first thing I would fix.
Holding the line costs speed. Every claim in a package now gets checked at its source before it is treated as real, and it means an uncomfortable conversation with a sponsor who may have inherited a bad deck rather than built one. It also cost me the comfortable version of my own judgment. Twenty years pricing land as a general contractor and developer means an asset that reads as strong to my eye feels verified when it has only been looked at, and this was a deal where three other claims from the same sponsor had just failed a formal check, which is exactly when that eye should be trusted least.
What I watch: the appraisal review and the well-yield report, because the asset is the claim everything else stands on and the one check not yet run; the county replat, against a named milestone and a date; the water adequacy determination, which gates whether the community is buildable at the size the deck sells; the replacement for the lapsed letter of intent, because the senior debt is a fresh ask now; and the engagement letter, because until it exists the value of this work to the firm is a posture, and the value to the sponsor is a package a real lender can finally read.
What it produced
All three load-bearing capital claims failed verification before any outside dollar moved: the named fund could not be confirmed in any registry, the senior lender's letter of intent had lapsed, and the investor entity's principals could not be verified. The financing request was rebuilt as a senior request under half the appraised value, and the sponsor asked Common Ground into every part of the project. Nothing has closed.
A slice of the project list
A few related projects.
- Aycre Capital: fund formation and capital raise process (2022 to 2023)
- BridgePoint Air: exit advisory and sale negotiation (2024 to 2025)
- Canyon Corporate: takeoff, pricing structure and bid revision for an office-to-residential conversion (2026)
- A medical device enters the US: diligence before the buyer (2026)