The whole point of seeking the cooperation of EB-5 Agencies is to harness the potential of their established market area.High net worth individuals tend to gravitate toward and live in or near major cities, because that is where they will find the most customers and the larger labor pools for their existing enterprises. Using the same logic, it is likely that a potential EB-5 investor will attempt to contact an EB-5 Agency near his residence or business. The larger the population of a city, the greater number of potential investors are likely to live there. The greater the number of potential investors there are, the greater the number of EB-5 Agencies that exist to service them.
Do not approach Agencies the first time with selling your project as your primary objective. Your primary objective is to qualify Agencies to actively and accurately represent your projects to their clients. Do not allow yourself to be smitten as you were when you first met your spouse. This is not a marriage that you are entering into, it is a business arrangement. Frankly speaking, you are, in effect, interviewing potential “employees.” If you were hiring an employee to represent your company in a critical position, you would not hire the first person to come through the door, nor would you hire on a single interview. You would process what you have seen and heard, and you would perform a background check. Qualifying an EB-5 Agency’s capabilities should involve a similar process.
LET’S REVIEW
Larger Agencies will be located in large cities. More Agencies will be located in large cities. More potential investors will be located in large cities. The location and size of an Agency is not necessarily an indicator of its capabilities or its integrity. The location and size of an Agency is an indicator of potential reach and sphere of operation.
Evaluating By Interviewing
Understand that you are going to be fed a lot of visuals, such as brochures and photos. That’s fine. There’s nothing wrong with that. However, think about that vacation you took to Hawaii. Remember the good looking model sitting by the pool in the travel brochure? She wasn’t there during your trip, was she? The point here is to be discerning. One way of doing that is to not take brochures and PowerPoint presentations at face value, but seek verification of what you are presented, preferably from someone other than the Agency staff you are interviewing.
Experience counts. There is some credibility to the idea that the longer an Agency has been in the EB-5 business, the more credibility it should have. On the other hand, longevity is not necessarily a reflection of integrity or expertise. Honest, experienced people start new businesses every day. Just because an Agency is new does not mean that its ownership or staff are inexperienced.
Ask to see examples of some of their marketing efforts, but remember that they are only going to show you their success stories. Ask to see their marketing collateral and examples of how they manage full-blown marketing campaigns. Try to determine the extent of their reach. Take some time to do your homework by investigating to determine if they have a good reputation among HNWIs.
There are four important things to ascertain at this point in the process:
Is this Agency able to expose my EB-5 project to enough qualified candidates? Will they expose my EB-5 project to enough qualified candidates? Are they able to communicate my EB-5 project thoroughly and without misrepresentation so that candidates are not ultimately dissatisfied? Is the welfare of the clients their highest priority?
You might also want to ask and answer the question, “Are they legally allowed to execute a deal?” For example, there is an understanding that the Chinese government does not permit an Agency to have cooperation agreements with more than two U.S. attorneys.iii The folks you meet at the Ministry of Public Security may be able to help save you time and effort by directing you only to Agencies that do not already have two agreements executed.
Finally, with respect to their marketing capabilities, try to ascertain what they know. Isn’t that a point of an interview process? Do they understand how to market EB-5? How do they market it? What does the marketing arm of their Agency look like? How do they make themselves stand apart from the crowd in their approach to potential investors? What makes their marketing unique and credible? Would you buy a car from this Agency based on their marketing? What is their definitive marketing plan? What is their value system, vision, and mission, and how do they demonstrate each successfully to potential clients?