Investor Outreach

Speakers

Oscar Jofre

CEO and Co-Founder

KoreConX

Oscar Jofre

CEO and Co-Founder

Oscar is currently one of the Top 10 Global Thought Leaders in Equity Crowdfunding, a Top 5 Fintech Influencer, Top 10 Blockchain and a Top 50 InsureTech. He has published an eBook that has been downloaded in over 20 countries, and been distributed by partners worldwide. Oscar is a featured speaker on Fintech, regulated, equity crowdfunding, compliance, shareholder management, investor relations, and transparency in the USA, Australia, UK, Germany, France, Netherlands, Canada, Singapore, Indonesia and China. He speaks to audiences covering alternative finance, RegTech, insurance, banking, legal, and crowdfunding. Oscar also advises the world’s leading research, accounting, law firms and insurance companies on the impact Fintech, RegTech, LegalTech, InsurTech and OrgTech is having in their business.

Jason Fishman

SVP Digital Strategy

DNA

Jason Fishman

SVP Digital Strategy

Growth Marketing expert with over 10 years of experience leading Marketing Agency, Ad Network, and in-house Brand Marketing Teams. Jason is an expert in digital channels including Search Engines, Social Media Platforms, Programmatic Ad Exchanges, Influencer Networks, Email Automation, Content Marketing, and Partnerships. Jason’s accomplishments in these disciplines include surpassing industry performance benchmarks with both Fortune 500 companies and scaling startups, alike. Over the past 6 years Jason has worked with over 400 brands, many of which in the FinTech vertical and over 175 focused on Investor Acquisition initiatives associated with 9-figures of funding. DNA has developed unique first party investor data that has been instrumental in the success of these campaigns across Regulation A+, CF, and D raises. Jason has been showcased in Panel and Individual presentations at a high volume of Tech and Marketing conferences, along with his “Test. Optimize. Scale.” Podcast. He is also committed to a number of Thought Leadership content projects for 2020, including the Forbes Agency Council. Jason manages a Los Angeles team with experience in all aspects of the user journey.

Andrew Corn

CEO

E5A Integrated Marketing

Andrew Corn

CEO

Andrew Corn is the CEO of E5A Integrated Marketing, a systematic, data-driven investor acquisition-focused agency that assists firms with raising assets or capital, engaging in outreach to prospective shareholders or clients, and launching new products. His experience spans several industries, including advertising, marketing, software development and investing. Previously, Andy was the CIO for E5A Funds LLC, a firm specializing in alternative investments and after-tax alpha strategies. He also served as CIO for equities at Beacon Trust Company, CEO of Clear Asset Management, and SVP for Corporate Marketing for TheStreet.com. Prior to that he was EVP Digital for Citigate which purchased his software firm MasterApproach and was the CEO/Head of Strategy for the agency Admaster Communications.

Dawson Russell

Founder/CEO

Capital Raise Agency

Dawson Russell

Founder/CEO

"Dawson Russell has been helping brands and funds tell their story for the past 15 years. Focused on branding, media, and marketing he has managed more than 50 sponsor / fund campaigns. He believes in the art of story telling and using creative media to help bridge the gap from a “lead"" to an investor. Dawson founded Capital Raise Agency, a digital creative agency specializing in branding, media, and investor funnels to create brand awareness and investor leads for Regulation D, Regulation CF, and Regulation A offerings. He has worked with financial advisors and registered investment advisors for the past 15 years and has a complete understanding of the regulations and compliance needs throughout the RIA, broker dealer and sponsor channels. Articles about his work for sponsors has been published in Forbes, Real Assets Adviser, and more. Dawson’s clients have ranged from real estate, technology, crypto, hospitality, cannabis, B2B and B2C products, oil and gas, and the list goes on! He received a B.A. in Marketing from Dallas Baptist University in 2008."

Peter Wright

Co-Founder

Intro-Act

Peter Wright

Co-Founder

Peter Wright, President, Founder of Intro-act is a career research analyst with prior roles and responsibilities including: Managed Boston Institutional Sales for Cantor Fitzgerald, Director of Research for Tradition, buyside analyst at Fidelity, and sellside analyst at CIBC World Markets. Peter has a reputation for creating differentiated research being ranked #1 by Institutional Investor Best of the Buyside for two years in the technology sector. At Intro-act he is responsible for product vision, development and investor engagement.

Oscar Jofre  00:09

Okay, well we don’t know what happened there but our speaker should be coming here soon. I told you everyone we were going to, it was going to get a little bit bumpy here. So here they come. There’s Peter. I’m not really sure what happened here, but it’s a very strange thing. Invite to the stage. And Jason Fishman. There you go. And, and I know you guys probably thought, hey, what a great way to start Oscar gets us in and he kicks us out of this stage. He wants all the spotlight for himself. Okay, I’m true to my promise. It was bumpy. So Jason, you are now officially on my friend.

 

Jason Fishman  00:55

All right. Thanks, Oscar. Pleasure to be here today at the KoreSummit digital securities edition. Very excited about this panel, investor acquisition. Some of the top names in this space here. Always a pleasure to be on with Andrew Corn. Dawson Russell, we’re just on a panel a few weeks back excited to do this again. Peter Wright. Pleasure meet you in person here. Figure well all start with intros, I run a digital marketing agency called DNA. I’ve worked with over 200 equity crowdfunding clients to date across Reg CF Reg D Reg A plus filings and that brings nine figures of capital right here in Los Angeles, California. Andrew, you want to do an introduction?

 

Andrew Corn  01:43

Sure. Thank you. And good to see everyone. I’m Andrew Corn. I’m the founder and head of strategy at E5A. And we are a systematic data driven investor acquisition firm. We work extensively in Reg A plus, occasionally in Reg CF, and work across a lot of different types of investment products as well. Been doing this for about eight years, the company’s been in business and prior to that I was an equity portfolio manager.

 

Jason Fishman  02:21

Excellent. Excellent. Dawson, want to take the mic from there?

 

Dawson Russel 02:26

Absolutely. So we are Capital Raise Agency. We’re based out of Austin, Texas, got started about 16 years ago working with financial advisors. And then that led into working with Reg D offerings. And now CF and A raises. So we focus primarily on telling the story, the media, marketing video, and then also the investor acquisition side of it as well. So excited to be here and excited to meet some new people.

 

Jason Fishman  02:58

Excellent. Excellent. And Peter, again, excited to meet ya. Want to start with an introduction here.

 

Peter Wright 03:06

Wonderful, Peter Wright, Intro Act. We typically focus more on institutional names, public companies, as opposed to Reg As. What we do by the name Intro Act is we make introductions that lead to action. Reg D, these are really where we have focused in the largest of Reg A. A couple clients gauge and made scope to 50 $50 million Reg A plus deals are ones that we have worked on. Types of investors that we typically introduce and bring to the issuers that we work with our institutional investors check size is bigger than the typical Reg A. It’s usually like the sidecar type offering that we’ve worked on in the past. And I could, as we continue, happy to talk about our process and what we do.

 

Jason Fishman  03:55

Excellent. Excellent. We’ll be looking forward to it. I want to first start with the definition of investor acquisition. All issuers are looking to fill their round with investors. Why do we call it investor acquisition? How is this different from marketing? Andrew I know you’re one of the early pioneers of even the term itself, investor acquisition, what is investor acquisition to you? How do you explain this to prospective clients?

 

Andrew Corn  04:24

Sure. So the name of my firm officially is E5A Integrated Marketing and it’s really named that because it used to be E5A Investment Management and didn’t want to change my email address so came up with a different IM. So the difference between investor acquisition and marketing, Everything everyone just said in their introduction, all of us do a piece of if we don’t do all of, my firm does all of what everyone said, including those introductions. We have extensive institutional experience. I ran a small hedge fund at one time, know a lot about placement agents and really networked in that world. So when I started doing marketing and founded  E5A, I realized there were 1000s of marketing firms out there. And I designed the index behind six different exchange traded funds in the US, and really wanted to find, Hey, how can we take the fact that we know the investment side, know how to look at companies take them apart.

 

I’ve been involved in hundreds of IPR roadshows. What is the commonality there? And what is it that not everyone does that could then form a niche that others could certainly play in the same sandbox with. And so it’s, essentially, we love to do measured work. That’s what I loved about being a portfolio manager. The end of the year you had your performance and how much risk you took, and then you were better than everyone else, or you weren’t better than everyone else. And you could compare your numbers quantitatively to everyone. So when doing a Reg A or Reg CF, people ask about KPIs all the time and I roll my eyes. It’s like, yeah, we have hundreds of them. I doubt anyone does tracking any more sophisticated than we do. Maybe as, I’m definitely not going to say we’re better than anyone else. But certainly no one’s doing anything more sophisticated. But it all just comes down to one thing, how much money I entered yesterday? How many people are on the abandoned list who can be converted? And what are you doing? It’s not how much traffic did you bring, it’s what’s the quality of that traffic. The only KPI that matters is we focus more on 20 million and above raises. If we’re doing a $50 million raise, and we raised 48 million, then we did not succeed. So you know, we have to look at what we did wrong. But anyway, investor acquisition is about acquiring investors. So I’ll shut up after one more minute, is lot of people do brand advertising. And that’s about getting your name out. And we talk a lot about brand in our firm, even though we don’t do any brand advertising. Everything for us is about a final result. And what I say to the brand people is if someone wrote a check and invested in your firm or used their credit card, by whatever means they’ve invested in your company, odds are they have a very positive view of your brand. So we’re taking care of that, but with a goal that is measurable, which is the money in the door.

 

Jason Fishman  07:44

Well said, well said. I think we speak to a lot of the same groups there. Those boxes are on point, Dawson, is that what you’re seeing as well?

 

Dawson Russel 07:52

Yeah, absolutely. And I think just to add one thing to that I don’t remember where I saw it, it was on an email that was sent about this topic and I think the word investor outreach was also used. And so I think, you know, there’s the acquisition part of actually obviously capturing the lead and then nurturing that lead into an investor. But I love, I love the outreach part of that too, because really, it doesn’t stop when the investor makes that first investment. I think I was on a call recently, and Oscar mentioned something about 50 plus percent of people are reinvesting into the Reg As once they’ve invested once. And so this idea of acquisition is kind of where it starts. But then there’s so much more to continue to communicate well, to provide updates and different pieces of media that push those current investors to even either reinvest or go tell a buddy, hey, there’s still time to get in. So I love the term investor outreach, because it kind of makes it feel like it doesn’t just stop with that acquisition, but there’s a little bit more to keep pushing there.

 

Jason Fishman  08:57

Sure, Sure. And Peter I know In your introduction, you mentioned you operate in a little different space. And you know, per Andrew’s comment, we’re all focused on slightly different areas. How does that apply to you? And the type of groups you’re working with the investor acquisition definition? How is it different than marketing? What is it in your world?

 

Dawson Russel 09:18

Yeah, I think there’s, I think there’s three key metrics that we look at, two key words to think about. First word is awareness. And Andrew touched a bunch on this on kind of building a brand. And when you are thinking about doing a raise of any sort, understanding that you’ve got a product brand that you’re marketing to your partners, your customers, your suppliers, like but you also have an investment brand. And that’s different, adjacent, and related and nurturing that brand and helping people understand two things, how you make money, and how they’re going to make money with you are the critical aspects of building a brand. So awareness getting your name out there among, you know, the audiences that matters is number one. 

 

The second metric is engagement. So, once people are aware of your name, how do you actually engage with them? Sometimes you need to do it very efficiently depending on the audience and the check sizes that you’ll be getting from them. And sometimes, it’s one on one in a process that requires more than a single touch for an institutional investor. And this is one thing, you know, that is that is, you know, important to understand for Reg As. Retail investors and institutional investors are very different in the process that they invest. Retail investors, you can typically, you know, sell on a single single report or single webinar that they attend. That’s not the way an institutional investor would ever write a check. So it’s a process, they get to know you, they need a little more one on one attention, it’s just a different process. 

 

The third part is conversion. So those are the three key metrics that we really look at. So you know. Number one is building a brand and making sure that you’re in control of your messaging. Two is engagement and making sure that your awareness is actually you’re closing the loop on it, you’re putting your executive team in front of the decision maker on the wallet. And the third is conversion and being very honest with conversion of what is working and what is not. You know, there is just like in, in marketing, AB testing, investor acquisition requires AB testing too. What messages resonate better with investors is critically important. Being flexible, being open to criticism, you know, this is the investor acquisition. It’s not a one and done, you know Reg A offering. No Reg A company I have ever known has raised enough money, other than the ones that get acquired to be done with it, you know, it’s early in the life of this company that they’re building. And so understanding that investor acquisition means cost in marketing, you know, acquisition cost, to bring those investors to you. The worst thing you could do is get them on board and then not nurture them. So nurturing those guys after you want them is really the secret to success and how to lower your cost of acquisition.

 

Jason Fishman  12:09

Sure. And great breakdown with the awareness, engagement, conversion. We put together a lot of projections in our strategies for impressions, clicks, conversions, visibility, traffic, and what the performance is doing. From there, I would say the majority of our investors that we’re seeing are more on the retail side, even on our Reg A plus campaigns, just looking at percentages. So it’s interesting to hear the comparisons in that world and want to talk about strategy. So if there’s issuers in the audience right now that are putting together their roadmap on how they’re going to hit their goal, Andrew is showing numbers for Reg A  plus 50 million, maybe it’s 20 million. Andrew was saying, you know, on the smaller end there just to pull some numbers from Mr. Corn. But, you know, how do you guys go about the pre launch? How do you communicate to the client? What needs to be done? What are the commonalities towards success of an effective campaign? And I figured, change up the order a little bit. Dawson, if you want to kick that off?

 

Dawson Russel 13:17

Yeah, for sure. Absolutely. So I think, you know, looking at that strategy, and kind of when we’re looking at the launch phase, typically what we do is break down a couple different things we’re gonna look at. You know, what is the overall theme and the concept that we’re going to go for, for messaging? So we do a lot of the messaging and branding and storytelling side of it. But then we’re going to break it down and look a little bit deeper at what channels are we going after? Do some research on obviously, which podcast are we going to go after? Which blogs are we going to go after which email newsletters are we going to try to get in with and then put that, you know, basically, into a budget. And I think one of the things we’ve changed up recently is instead of just saying, Okay, here’s the ad spend budget, here’s the retainer budget, here’s, you know, what you’re going to spend on XYZ, really breaking that down by each individual channel. So we can look at that together with the client, and make sure that they understand this isn’t just a, you know, one shot, we hope it works, we’re going after a lot of different marketing channels. And we’re going to be AB testing those as we go along. And so that way, we can be fluid and flexible to say, okay, you know, XYZ channel, that’s not working right now. We need to change that. 

 

And another thing we’ve done on the strategy side is let them know and be a part of that conversation to say, you know, this isn’t a one size fits all type scenario for every, you know, Reg A  we’ve seen just from our own clients that, you know, sometimes some publications work better, sometimes some channels work better. We’ve started implementing TikTok ads, which you know, sometimes that’s going to work great for some Reg As and some it’s just not going to be a good fit. So, but we don’t ever want to, we want the data to really drive those decisions and to drive that direction versus just making the assumption that it’s not going to work or that it will work. So, you know, as far as the strategy piece of that goes, I think it’s bringing the client in, in the issue or in on that conversation on the front end, instead of having to get down the road and then re-explain that. And there’s confusion, and there’s frustration, whenever we’re changing paths, instead of saying. Okay, this is exactly what we thought was going to happen. We had to change, we had to be flexible. And here’s why. So that’s, that’s just kind of what we’ve seen, it’s really making sure that everyone’s a part of that conversation at the beginning.

 

Jason Fishman  15:34

Sure, having that alignment with the client, being able to map out which channels. I love how you guys are using such a broad range of different channels, and like you said, AB testing if you’re seeing the best performance. As you give the example of TikTok, that would be you know, blind or a lot of campaigns wouldn’t test that out. But if that’s where you’re getting the traction, by all means reallocate funds, reallocate traffic towards those key movers there. Andrew, Peter, who wants to go next? How do you guys put together your strategies, the early stages of engagements for these types of initiatives?

 

Andrew Corn  16:14

Peter, I’ve gone first every time if you want to go,

 

Peter Wright 16:17

Perfect. So, you know, I, one of the things that we’ve seen is kind of push and pull. So a lot of channel partners or destination type platforms that people have to engage with you. And that’s an interesting strategy to figure out which ones are more successful and offer a better ROI. What we have found, really quite routinely on the campaigns that we run is, the push is often more fruitful, there, excuse me. I guess the pull is more fruitful than the push. So putting stuff in destination type platforms is one thing. But engaging through direct email, this is much more true for institutional investors, is really the way they’re used to engaging with you. And it’s a little more time intensive. But you know, that that would be one thing that I would say, the pre plan doesn’t doesn’t raise a lot of good points, I won’t reiterate, you know, the one thing I would say that I think is really critical, and kind of the pre planning is, you know, three things. 

 

Which is number one, making sure your content strategy is right, and content has many forms of media not only written, you know. But what is your content strategy going to be? Second is who are your partners going to be and that both of these can evolve and adjust over time. They’re flexible, but the second is kind of where your channel partners and which ones are most important to you, and why. And the third, is setting your KPIs that Andrew touched on earlier. And I’m sure he’s way more sophisticated and detailed than us with a number of KPIs. But I, we usually recommend, really defining the two or three KPIs that you’re going to match to, and sometimes they are a little bit custom. We kind of have the three out of the box that I mentioned, you know, just out of the gates that we typically work with. But being rigorous about those KPIs and tracking them through the campaign, that’s really how you optimize the return. I mean, it’s an investment to make to make money you know, you are investing in this process. That’s an important thing to understand. 

 

One very last point I’ll save just because we work a lot with the institutional side of it. Reg A plus has one danger zone with it to be really aware, we’re aware of and crowdfunding. Which is institutional investors are typically more valuation aware, not sensitive, but aware, then, you know, retail investors. And so having a strategy initially in Reg A, it’s typically thought of more, the better, the more money I can raise the better for me, and institutional investors don’t necessarily always think that way. So how you go about communicating that and understanding that is, is critical because often you could go so far into you know, a Reg A offering where, and we’ve actually experienced this with some Reg As that we’ve worked on, valuation gets ahead of itself. And even though you could have the best story out there, the best company out there, the best growth and metrics out there, if the valuation is kind of broken, it’s got to be rejiggered to be able to attract institutional investors.

 

Andrew Corn  19:25

So I’m gonna jump in and just jump on that valuation thing. Generally in a Reg A  plus you’re going to be able to get away with a slightly larger valuation than an institution will buy. And I have been quoted so many times back as a portfolio manager, CNBC, Bloomberg TV, you know so much about this company, you seem to love this company, why is it not in your portfolio? And usually the answer would be valuation. Stock price is just too high. So some of the work that we do is more passion oriented and people aren’t looking at valuation as closely. But when we come to institutions, we usually look at institutions as, are we targeting them? Are we not targeting? If we’re targeting them, you may want to run a 506 C Reg D, side by side, we recommend having identical terms except for valuation or adding warrants or something that will sweeten it. Because someone who’s going to write a check for $5 million, doesn’t want the same term. So someone is putting in 200, or $500. And I think that that’s fair. That I just think is the way the world works. And it’s something a company should consider, and it should be very deliberate. 

 

But there’s serendipity as well, you know, because we’re advertising in places like major national publications like The Wall Street Journal, and Barron’s. We’re going to end up hitting institutions anyway. We’ve had Reg As where they’ve gotten a call from a chief investment officer and two of them in the past year have converted into 5 million or larger checks each time. Immediately, they called me and I was like, do a side deal. You want your own term sheet, sign the deal, it shouldn’t be part of the Reg A . So that’s kind of getting the institutional thing out of the way. And then there’s just so much to talk about on all these topics, we tend to generally run 16, 18 campaigns at the same time. And guess what? So does everyone else on this call. Jason’s doing it, Russell’s certainly, you know, doing it. You know, a lot of us are running from similar playbooks. Maybe one differentiator for us is we have a lot of first party data. We have data science, people who are really super focused on just finding who are we working with and why? Who are we going after and why? Most of our work, either the end result from the company to the investor is yield product, think real estate bonds, anything with a monthly or quarterly payout. Innovation, frequently software, but frequently not we’re doing a lot in alternative energy excetera. And last is impact investing. So with a focus like that, we can spend a lot of time on finding that data, and having that data as our own, which gets us around the Apple issues that people talk about. And what Google and Facebook plan on doing when they eliminate third party cookies, which frankly, I don’t think a client should even bother knowing about. That’s our job. So I could go on, we don’t AB test ever we do multifactor testing or multivariable testing. We never run one set of creative running 4 – 10 sets of creative. All of these things are being gone with models behind.

 

Jason Fishman  23:29

Did we lose Andrew?

 

Oscar Jofre 23:30

I can hear you Jason.

 

Dawson Russel 23:33

I can hear you Jason. Okay. I think we might have lost Andrew.

 

Jason Fishman  23:39

Okay. You never know on these digital panels who it is.

 

Andrew Corn  23:43

I cut myself off. I was going on too long.

 

Jason Fishman  23:50

He brought so many points to the table there. And that tells us a lot about the strategy and how you guys are setting up campaigns. I know it’s an important part of our process. We have a system that we use, an eight point plan. I go in depth with clients, we do it over a one month timeline. We’re mapping out competitor marketing audits to see how they’re bringing on accredited investors, retail investors today. There’s over 650 Live reg CF’s, don’t have a live count for how many Reg A plus campaigns. We’re always looking for the most recent data. Peter, some of the campaigns you’ve mentioned have been focused on in our strategies, that there’s always, success leaves clues. There’s always different findings we like to take from there. We then map out the audiences. We generally start with 4 to 10 audiences. We put together the channels I want to talk a bit more about channels in a moment. And then creative the messaging that we want to put into each different avenue. We’ve found this to be directly correlated with response rates, conversion rates, so on and so forth. 

 

Put together a strategic partner list and then everything’s projections. As you guys have emphasized your KPIs, key performance indicators. That’s what clients want to know. Not as much pixel data, but really around, Hey, what is my return? What is my timeline to get a strong return? How many touch points do we have from these audiences? Where do we anticipate the levels to be at? What’s the full transactional value here and at each stage, in the roadmap, to be able to articulate that to be able to align with clients on that has been a big part of the agency client relationship. We’ve seen a lot of groups fall short there who really emphasize it. And I know everyone’s called, puts together great relationships, hear about you guys regularly. Clients are very happy with you. So I know it’s consistent for everyone on this call. As we’re talking about strategy, I want to get into tactics. But before that, a question we get asked all the time, you know, whether it’s with a prospective client or prospective partner is generally around costs. I am not gonna, you know, broadcast anyone’s rates or anything, but what budgets do you have issuers prepare to do a $20 million campaign to do a $50 million campaign? I know, that’s the first thing that goes through my mind. Is there a test budget involved? Is there a percentage that you point towards and say, Hey, this is the answer, don’t sell your brand short, don’t sell this investment opportunities short, don’t hold back on the shareholders, you need to make sure this visibility is there. How do you prepare founders? How do you prepare teams for budgeting of investor acquisition? And Peter, maybe we could kick things off with you.

 

Peter Wright 26:44

Perfect. So, you know, public companies typically spend, you know, if you think of the IPO type process. Are typically spending about 15% of the capital they raise, to raise those primary shares. Private placements for private companies, when you work through broker dealers, is about the same, you know. Typically on some type of basis of a mix of cash and warrants. So between 10 and 15%, is probably the right answer. I don’t think the Reg A is necessarily any more efficient, I think it’s just a different vehicle to raise capital. Investors have lower barriers of entry, of course. And, and of course, it’s a marketing heavy type push, as opposed to, you know, lawyers and lawyers and accountants and document creators. It’s more marketing spend that you have in this type of situation. The only, the only value add that I would kind of say on that question is, I would think of it less in terms of the money you raise. And I would think of a budget similar to an IR budget that a public company has. What is the money you can afford to continually support your investor community? And, you know, that grows as your company grows. But what is that number and it should be a line item that’s really running kind of a separate business plan, next to your core product or service business plan.

 

Jason Fishman  28:11

Absolutely, absolutely. Dawson, how do you guys approach this question? How do you work with groups to make sure they’re well prepared? They have the proper resources in play? 

 

Dawson Russel 28:20

Yeah, absolutely. So I think one of the things we do on the discovery side is, we try to figure out what they already have in place. So you know, some groups we talked to, they might have a massive social following, a massive email list, you know, with previous customers or previous leads. That’s literally sitting there, ready to press send on a, you know, on a press release, or a Reg A announcement. So that that kind of changes changes the budget a little bit in our perspective, and how we plan for it, if they have 150,000 people sitting on an email list, if they’ve got, you know, a social following of, you know, 100,000 Plus, you know, that they’ve already generated over the years. 

 

So that’s, that’s kind of how we determine especially in the launch phase of what it’s going to take to grow that following. Because on the other side, you might have a group that they’re starting from scratch, maybe they have 100 followers on Facebook, and they’ve got, you know, 50 people on the email list that they collected at one time. And so obviously, if you’re looking at those two different groups, the success of the launch by just announcing it to people that are already following you is going to be very, very different. So we look at those factors first, and then we budget out, but absolutely. I mean, we typically look anywhere, you know, from the seven to, like you said 15% range, depending on how much of that’s how much of that we’re going to have to grow for them and how much of the brand awareness we’re going to have to do versus how much they already have in place ready to go. And they’ve done some of the legwork already.

 

Jason Fishman  29:50

Sure. Is that consistent with your numbers, your metrics Andrew? How do you address that question?

 

Andrew Corn  29:57

So as usual, I’m A bucket of ice water. We just look at this totally differently. It’s really expensive to do a Reg A  plus and if you consider that 15% of $10 million is still a million half, it’s a lot of money. So for us, the question is how much cash does an issuer need, until this whole thing could be self funding? So that’s really the number that we’re focusing on. And I’m seeing some headshake. And, you know, that’s what it comes down to, because no one’s gonna have 15% of $20 million. So they wouldn’t be, or 30 or 50, or 75, or they may not be doing the race to begin with, or they may be delaying it, which, by the way, is a big mistake. But I totally agree that it’s got so much to do with what they have and what they don’t have. But it also has to do with credibility. You know, what’s their background? What’s their pedigree is this their first time doing this, you know. We’re doing a real estate deal. It’s their fourth offering, it’s different from real estate deals first offering to a Reg A  plus, and they think they’re going to be able to go to the public. We probably turned down more of those than we even meet with, let alone will write a proposal to why because we’re looking at what’s the probability of success at a reasonable cost of capital. 

 

So we want to be part of that conversation and model it with them. And so much of that can be done in the first discovery call. So that’s really what it comes down to, how much cash are they going to need? The number one reason for a Reg A  plus raised fail is that it’s underfunded and the issuer is not patient enough. You know, think of these things like a snowball, when it spins around the first time, it only gathered a couple of flakes, but after a while, because to go to some of the things that Peter and Jason and Dawson have said,.You’ve done this awareness, you’ve built this pool of people, you have all these KPIs, and then all of a sudden, you’re harvesting. You’re planting all these seeds, and now you’re harvesting and you’re bringing in now it’s 100 a day, it’s 200 a day, it’s 500 a day, or whatever the metric is that you hoped for. And you really are going to get there, but you need the cash. 

 

And you need the patience. And without both those things, and you need trust, you know, whichever firm you hire, there’s got to be a partnership. Both sides have to be all in. And, you know, you need to know that you were in this to win this, which I know these guys are. I don’t really know Peter, but I do know Dawson and Jason and I know they’re in it to win it. And they’re all in and that’s what you need. But it always is going to cost more than you think. And now I’m going to throw another bucket of cold water. It’s way harder this week than it was in June. And it was way harder in June than it was a year ago, June. When the whole world was locked down and everyone was at their computer, it was like shooting fish in a barrel. Like, give us another one we can raise anything. And now it’s not so easy. And you know, which makes us pickier about which issuers we want to work with. And also how big we want to go, you know? Everyone’s got their own, kind of there’s the eight point there’s the everyone’s got their own way of saying it we say test, measure, refine, optimize, and people will see me slowing down in the beginning. It’s the opposite of Kickstarter, we want to start slow, we don’t want to start big. We want to optimize a little messaging, optimize a little media, and then go out large. And you know, my colleagues here may have a different approach. And that’s okay. I don’t know if any one of them is truly better than the others. It’s just from our experience with our issuers. We’re doing it the way we are. But also with enough intellectual honesty to know it’s going to be different in three months or six months. We change ads so frequently because the wind is blowing, the mood of the country is different. The economy feels different. What is it that’s getting people to do things in putting yourself into the mindset of the investor? You know, that is one of the hardest parts, but it’s something we’re all good at. So,

 

Jason Fishman  34:41

Andrew, I agree with you on so many of those points. Sometimes I think Oscar puts us on these panels with other service providers to kind of go back and forth. But you brought up so many great things there of how it changes with the seasons, how there is some level of oversaturation and with the same amount of investment in the marketplace in many scenarios, and that affects success rates for Reg A  plus. I look at reg CF and how much money is being raised and increases month over month. There’s also far more issuers month over month. So, you know, the fact that you’re looking at selection is so important there, yes, finding a starting point. And I imagine Peter and Dawson have starting points as well, too. And being able to speak to issuers about that, looking at the big picture. Hey, if this all works, on average, you may be somewhere between these ranges, I’ve seen it done with 2%. I’ve seen it done with 20%, we’re going to have to look at those numbers to get there. Because we now have this trust, we have this partnership, we’re going towards these goals together. And we are going to hit it, we’re going to come to the table with new ideas, here’s what to test out next. Be prepared with capital, be prepared with patience, there’s going to be some months that are slower. We’re going to have to work through it not just say, hey, this isn’t working, and you know, point a bunch of fingers. 

 

So again, so many productive notes here. And not a lot of panels. But anyone listening in, really emphasizes putting these different mindsets into your plan of action. Want to talk channels a little bit here, as I mentioned, I would also love to throw in some numbers. So anything we’re able to talk about, you know, what our average check sizes on Reg A  plus deals, Reg D deals, how do those differ? What channels do you use to acquire those? And what are some of the investor acquisition costs? What are some of the KPIs that you guys are seeing and hence some of the returns, I want to put a large Asterix here for everybody. These are industry averages, they’re not guaranteed. It’s not a matter of spending this much. And you will see this in return. There’s a lot of optimizing. And as Andrew said, everyone’s got different approaches to this. But I think the word optimizing is consistent across all of them to get there, but what channels to produce? What type of results? And what are some KPIs that people should be shooting for here? Peter, I, I think we served Dawson last time, if you want to kick things off, may have been you but you know, no specific order everyone could just hop in. But how? What channels have been doing it for you? Are there acquisition costs you go for? And how does it stack up? Is it you know, 1,000 investors at $1,000 average? million dollars? How does that differentiate?

 

Peter Wright 37:39

I will be short, because I’m probably the worst person on this panel to answer that question. Because we’re in the tail, we only operate really among the institutional investors. So you know, we work with a lot of public companies. 80% 90% of 90% of the companies we work with are public companies already small. You know, micro cap public companies are our core, we’re shifting down into more of the Reg A . So we come in after the Reg A  is already really successful. I mentioned a couple of names of the types of companies that we’ve worked with, we’ve been successful. But once there’s already a whole lot of traction, on the deal, validation kind of in the marketplace, that’s when you can start spending some time going after, you know. Institutional check sizes, average check size that we’ve seen, you know, on the Reg As that we’ve worked with is a seven digit number, which is just so clearly different from you know, industry norm. It’s low seven digit, it’s barely seven digit type type numbers is what we’re seeing from the institution. $1, $2 million type checks is what we’ve gotten for both of those two names that, you know, I mentioned. And it’s it’s, you know, it’s one or two of those are what’s getting sprinkled in for the issuers that we work with.

 

Jason Fishman  38:53

Excellent. Excellent. I know, so many groups are shooting for that. It’s great to hear that you’re effective. And on these landmark campaigns, again, you have worked on some of the biggest, so that that’s great to hear. Andrew, I know you deal with a lot of institutional groups and credit investors, is that what you’re seeing there as well? Do you have different numbers that you use for your model?

 

Andrew Corn  39:17

Yeah, so even words like institutional investor have such broad meanings and such broad definition. So a family office may put in as little as a million dollars. On the institutional side, we’re seeing more like two and $5 million checks. But they’re rare. You know, if we’re doing the 506 C Reg D and bid institution simultaneously, then they’re going to be less rare because we’re really pushing for it. We have seen two checks over $2 million in the last year, as I said that were quote, serendipity because the right person was being targeted through the right ad in the right message, right place, right context. So that worked out in the Reg A world, it’s all over the place. So what’s your minimum, your minimum is 100, then you’re gonna have some people at 100, your minimums at 1000, you’re gonna have some people at 1000. So what’s the average? Again, we don’t care, because we’re looking at the tails to what’s the median, it’s going to be different for every raise. We like to model a bunch of them at 2200 when we’re dealing with yield, we’re dealing with innovation, it’s going to be lower, because you’re buying a lottery ticket on software, or robotics, or drones, whatever it is. So the check size and the offering are really tied together. But, you know, that then ties into how many shareholders which means how many clicks on the Invest button, and how many abandons and how many completes. So all that needs to be modeled into what you’re doing. So that check size is actually really important to how much you’re spending on marketing or investor acquisition overall. But it’s really, really hard to talk in generalities. You know, much more than that. 

 

Oscar Jofre  41:14

SWell I can bring some little light into that. Would you like me to give you

 

Andrew Corn  41:18

Yeah, because Oscar’s got I’ve been begging you for this data. Right?

 

Oscar Jofre  41:22

Yeah. Well, it’s, and I think I think everybody said something correct. And I and you know, Andrew, it’s great that you guys all connected with Peter. And it’s, you know, why I put all of you together? Is because I humbly believe that it takes all of you to actually be a successful capital raise 75 million. You need the top. Peter Wright, Peter is, you know it, I had a great conversation with him this weekend that just blew me away, I finally understand what institutional investor means. And meaning from his perspective, which is in itself, and because we keep you floating that word around. But you know, when you talk to Peter, you’ve got to know exactly what he means. He’s talking about those particular institutional investors that follow Now, so I’m just going to give you kind of a snippet of some deals, you know, Andrew is correct. The average investment right now regardless if the average and the minimum investments are $100, $500 or $1,000. We’re seeing it right now between the 2200 mark to $2,700 mark, that’s the average right now. That’s, and we’re monitoring lawn deals right now, across the board, not just ours, but throughout the ecosystem. We have daily checkers. And so we see that now people will say, Well, no, I see another one’s average 1000. We’re not done yet. And this is the other problem. You may have a good sprint, as Andrew said, you get a family office put in a million dollars, and boom, your numbers get skewed right away. Because it looks like it went for the average investors 8000 10,000. So you got to really pay attention to it. But here’s the one thing I will tell you. It’s not the 18 to 35 year old that’s putting the money in that really matters. And this is the part that I think it’s been the awakening for us in the last 24 months. 

 

The investor that’s putting in the real money is 40 to 98. And the reason I’m saying 98 is because that’s the oldest shareholder we’ve now seen on Regulation A plus. And that’s kudos on Jason Dawson and Andrew and all everybody out, you got a 98 year old to go and his mobile device can make an investment. That’s kudos. I mean, that’s, that’s, you know, and so, but it’s, uh, you know, as far as the market, it depends, you know. There was a reg CF deal where within a very short period of time four weeks, five weeks sorry, investors came from 24 countries. 54% of the investors reinvested more than twice so this is you know, that’s the other thing the investor doesn’t just invest one so there’s more than one and 98% were credit card you know, there it is. It’s all over the map. We need more data and it’s to help people like Jason, Dawson, everybody else to have more successful capital races and in this information it’s just to help everyone in general so great panel guys as always. I mean it and I hope you guys enjoyed the conversation with Peter Wright I know I did over the weekend. I swear to God, I felt like I had to put my head on a URL like that. And because of him, I’m, we are writing a blog, what are the investor types and to define the component of institution investor, which I know Andrew, you know it well, but the word is you so loosely in the market. So thank you again for this afternoon. We’re going to close this session. As always, we’re going to put everyone in the lounge for just a few seconds while we get the next panel up and coming here really quickly. Because we’re not going Have a long break. But remember, all the speakers’ information is at core summit.io. You can click on speakers, you’ll get their bios LinkedIn email address, you will also have an opportunity to go to their tables during the lunch break at the next break we have and then be able to converse with them. And of course, we are recording this session so you can have it available to you to listen to it again and again and again and keep learning from this. Thank you Peter. Jason Dawson, Andrew, really appreciate it. We close off.

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