Can social media alone help my RegCF offering

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.

Michael Golomb

Founder, CEO & CFO

Fanvestor

Michael Golomb

Founder, CEO & CFO

I like to win, and people who work with me, win with me! A hands-on company builder, my background as an entrepreneurial executive with three exits behind me is the culmination of twenty years of senior management experience across a broad spectrum of industries ranging from startups to large public corporations including telecom, blockchain, digital health & medical devices, consumer electronics & hardware, manufacturing, software/SaaS, and real estate. Here are a few notable highlights from my recent career: - I have been a C-level at several publicly traded companies (NASDAQ, LSE, AIM) - two of them I’ve taken public - I am the Founder, CEO, and CFO of FanVestor, a crowdfunding and engagement platform connecting celebrities with their loyal fans. In these roles, I am building FanVestor into a nationally recognized engagement platform, allowing celebrities extensive digital reach to raise capital for various projects - As CFO and Sect-16 Officer at DZSI (NASDAQ), lead the $46M Public Offering of Common Stock, the $40 million senior secured credit facility, the cross-boarder KEYMILE Acquisition in Germany, while getting rid-off of the "Going Concern" and material misstatements from DZSI' financials - At BitFury, I was the first employee (CFO and Board Member) - helped build hyper-growth market leading Blockchain infrastructure company, taking it from zero to over $500M valuation in and from 3 to over 120 employees in 7 countries in less than 2 years - As CFO of Sistema Hals, I led a highly successful London/LSE IPO with market capitalization of $2.7B - While CFO at Breathometer, a hyper-growth digital health / medical device company, I helped take it from pre-revenue to shipping in the FDA regulated space / OEM partnership with Philips / ISO13485:2003 Certification / FTC audit - At Mayak RE, as co-Founder and co-President, I led the formation of this successful JV with Morgan Stanley and MCP Private Equity Fund in Europe - As Head of Compliance at Trimble (NASDAQ), we successfully implemented our global SOX compliance program as well as acquired/integrated several international technology companies - As Corporate Controller at Entegrity Solutions, we filed Form S1/NASDAQ Other qualifications and expertise: - CPA/MBA/Stanford GSB - Extensive knowledge of US GAAP/IFRS, SEC and LSE regulatory reporting processes - Expertise in pre/post-IPO and M&A - Enjoy scaling companies 24x7x365 When I have time… - I am a recovering professional chess player - Enjoy sports such as basketball, snow skiing, and swimming FANVESTOR

Oscar Jofre  00:27

All right, everyone, once again, welcome, good afternoon from everywhere around the world. And of course, the United States. It’s another great KoreConX KoreSummit webinar series 2021. And it’s March 11. And we are four days away. That’s right, four days away from $5 million, that’s right where companies can raise up to $5 million using regulation CF. And today, we’re going to have a great discussion about that. In particular, because a lot of inquiries are coming in everybody’s curious, different companies, different sizes, and not everything fits all for everyone. So today, we got to great panelists, some you’ve seen before, but like always, I want you to get an opportunity to meet them. First, Michael, introduce yourself, please.

Michael Golomb  01:15

Oh Thank you, Oscar. I really appreciate you guys putting together this important. Panel. Jason, good to see you again. So about FanVestors. FanVestor is the first of a kind FINRA regulated equity crowdfunding and engagement platform. We focus exclusively in providing access for investors and fans to invest in celebrity related businesses and projects. In addition, we also supporting supporting product and service introductions, they allow fans to participate in exclusive rewards and [uncertain]. So if we were to compare us let’s think about Starting Engine meets entertainment, basically that that is so accredited, unaccredited investors can interact with a favorite and participate in equity crowdfunding, specialized ecommerce auctions, sweepstakes, exclusive rewards, charity events on our platform. We’re on three platform iOS, Android and web app.

Oscar Jofre  02:10

Oscar. Okay. Well, let’s hear a little bit about Michael.

Michael Golomb  02:16

Oh, Michael. Okay. Oh, my apologies. Yeah, thanks Oscar, so thank you. So I come from finance operations background. In my career manage five public traded companies, two of them taking public one back in 2000. In New York, it was $100 million IPO. It was security access management company. Back in 2006. I took a [uncertain] company public as the chief financial officer in London for $2.1 billion IPO dipped in $1 billion valuation. When I left the company was about $3 billion. I was a joint venture partner with Morgan Stanley, specialist rotation fund in Europe. Most recently, I was the Chief Financial Officer at a publicly traded company telecom at NASDAQ. I also was the founding team member of a company called bit fury. I was the first employee and board member and an extra company was registered in my house in San Francisco. The company just completed its SPAC deal last year last Friday at $2 billion valuation. That’s my background finance and operations.

Oscar Jofre  03:17

Right. Thank you. And Jason, please.

Jason Fishman  03:21

Absolutely, absolutely. Michael very exciting background and big fan of Fanvestor. So excited to be here with you today. And I’m Jason Fishman, I’m a marketer have been working on equity crowdfunding campaigns since 2014. First reg D, later, Reg CF reg A plus in 2016 excited to say the least about the expansion on Monday, looking at the $5 million cap looking at the 50 to $75 million increase for reg A plus, as well to have a wealth of experience and insights to share in terms of what we’ve seen work, what we’ve seen not work, across over 200 raises to date, and how we’ve been able to optimize initiatives to a point of effectiveness. So always an honor to be here with you as well, Oscar and the KoreConX community. I know it’s a it’s a whole cohort of industry experts, founders, so just want to be able to provide different types of recommendations based on the experience we have here with you today.

Oscar Jofre  04:35

Perfect, that’s, you know, it’s it is that it’s just bringing everybody together for the greater good. I know it sounds kind of [uncertain]. I mean, if you  all if everyone reads the Jobs Act, that’s what it was intended. And so I think that the fact that we’re all coming together like this, bring an education and we need to do it. We need to do it can tenuously. I know, some people go Oscar, didn’t you do this one in January? Yep, we did. And why doing again, because always always educate, educate, educate, because social media, I could be wrong, but it’s a moving target. So today’s discussion is really around, you know, for in particular for regulation CF companies that are coming on. I mean, we, we, we’ve been used to a certain type of reg CF company. So that’s one part. But now with the increase of 5 million, will social media alone be enough to help them because now you got to go from one to five? And that’s one of the part of the discussion today. And the other part of the discussion, will it change based on you know, the here we have a platform that is very different than anything else we’ve ever had before, which is almost influence driven. So that we’re going to have that kind of discussion today. So Jason, I wanna start with you. Because look, I look at your work, I’ve seen a your data driven, just like many of the other participants in the ecosystem. And obviously, social media plays a major role. But that’s one component. And but first, let’s discuss that, tell me all the social media elements that you are applying to reg CF in those 200 offerings, and then we can start expanding that.

Jason Fishman  06:27

Sure. And social media is a broad term, everyone has a different perspective on it, based on their own individual experiences with their devices and their platforms. The reasons we use social media, they are the top sites, if you have a background in ad tech, you’re looking at top websites and the amount of traffic, you’re going to see social media platforms at the top there, that then gives us the ability to go through with the fine comb and use targeting filters to be able to go after the exact individuals we want to reach with Facebook as an example, over a billion daily active users, anyone we want to go after it is on there. And if we set up the right parameters, we can be funneling over those individuals in volumes. Furthermore, the targeting that beyond the targeting the actual placements, whether we’re talking about organic, or whether we’re talking about paid, whether we’re talking about posting content or buying advertising, their high impact it, you know, takes up the full screen and the majority of traffic is mobile, it takes up the full screen. So when we’re looking at click through rates, when we’re looking at conversion rates of the traffic, it’s higher than in comparison to these other ad placements. If we’re running a banner ad, on a financial website, maybe we’re playing 4.5% click through rate, the International Advertising Bureau would say point one is average, on Facebook 1% average, we’re seeing 234 5% Click through rates on a regular basis. So the actual attraction to the the activation to the marketing is much higher. And then there’s just something about reaching people on their on a social media site. If you look at the studies for how much time an individual’s spending on one of these apps on these platforms a day, it’s high hours a day, in some cases, so you’re reaching audiences at a point where they’re scrolling, maybe it’s a point of leisure, maybe they’re waiting in line, you maybe they’re waiting for an Uber Eats or something these days, I still like to say waiting in line at the bank. But wherever they may be there, they’re scrolling. And that’s reflected in the conversion behavior. It’s not taking somebody away from a YouTube video that they’re seeing. In many cases, it’s it’s finding someone who just wants to see something interesting, see something new, where Google ads, it’s an audience who’s typing in something very specific. These social platforms, the conversion rates that are associated, indicate they want to find an exciting new opportunity. So you know, we have assumptions for what sites are going to perform best, consistently, the analytics are showing us that social is a place to be, that’s why we use it.

Oscar Jofre  09:19

Okay, that in, I’m going to be challenging, you know it because obviously, more things are happening. And we have to guys, we have to, you know, the moment the needle is moving, right? So we need to be constantly making sure that we’re challenging ourselves and because our clients are going to do it for us. So but I want to bring you in now, Michael, because Fanvestor, I mean, the way you were described you’re right, it would be there. I’m not aware of any platform today that is going to offer this. So it is social media enough for Fanvestor, or, I mean, what else are you coupling that with in order to make a regulation CF offering successful wit in what you’re doing?

Michael Golomb  10:04

Absolutely, absolutely. And by the way, Jason and I were working together, and we exploring ideas and things like that. Jason would agree with me that it’s not enough is just not enough. Because you also need first of all need to have a story, you need to have a need to actually explain who you are. Because just it’s not just about going to yet a small ticket size, but people still want to learn about the company, what they do, who is behind it, what technology is so. And then also, there are other instruments such as mailing lists in others specific groups, if you’re raising a full $5 million capital, or you’re going for 75, reg A plus, for example, you probably need to bring more than just non accredited investors. And you probably want to present this to some other clubs or family offices and things like that, there are other instruments to do that, you need to have a strong PR as well to support it. And then this IR marketeers can take those public PRs and, and amplify it across social media platforms. But if you have no story, no strategy, it’s really hard just to go into, you’re gonna waste a lot of money on and you’re going to try to look for those look alike. We like to call who is who is our investor? And then, Jason, I asked you how I mean, you guys also use not just social media, right? You use other techniques like LinkedIn, the guys are using LinkedIn, reach out. I mean, it’s kind of social media, but it’s not really it’s, it’s targeted campaigns. So maybe back to you.

Jason Fishman  11:39

Yeah, and Michael, completely agree with ya, it’s, it’s not enough. As a marketer, I find that that’s a common statement. For me, it’s not enough, we want to be everywhere, the target audience is at least for a test and be able to scale towards what’s what’s working, right. So whether that’s organic and having a site, you know, publish an article, whether it’s a strategy to stimulate peer to peer marketing, from an existing audience, and through an email sequence that really pushes and encourages recipients to share with their friends, their family, their peers, their co workers, so on and so forth, or their golf buddies, or, you know, at any place that the target audience is go online. And you know, love how you’re bringing up the audience, we really want to map out these personas, see where the audiences are online and do whatever we can to have a presence there, and ultimately optimize towards the the key drivers. So is it social every time? No? Is social a common part of the equation? Yes. And when social is working, we’re still always asking ourselves, what else can we be doing? What else can we can we execute to, to ramp things up quicker?

Oscar Jofre  12:56

If you know the reason why I’m asking these questions now, because data is out. We now have data, right? You have 200 offerings, from the rec CS space, we know that we’ve now done almost 3700 In total, since day one, we now know there’s less than a million investors invested. So what does that tell us? So from a numbers game, I go like this 233 million qualify, and only a million. So is social media enough? And that’s the question I’m asking, because I want everybody to succeed. So we need to start digging in deep. And, you know, the LinkedIn and the Twitter’s because believe me, I had the same challenge yesterday. I want because we want companies to succeed. So we all have to start digging around, getting through that because I think social media complements it. But what is holding back the other two and 32 million Americans from investing in reg CF, what do we need? Where do we reach them? Where is that? You know, you got the great story. You’re in a great platform. It’s it’s everything. Where is that barrier or the hesitation? I mean, I I realized I’m going to put you both on the spot today. And it wasn’t meant to be in any way. It’s just we’re now in an era where we are going to have some great fun. And imagine having 130 issuers on your platform, Michael, I’m sure you’re already imagining that. Which is great news. I spoke to one they say they got 1400 applications. So it’s sort of like, you know, if you come from the public markets go great. We got a lot of sellers. Where’s the buyers? What do you mean to buyers? Well, it’s good that people want sell. So I can tell you that you might go first.

Michael Golomb  14:55

Yeah, sure. Sure. So So think about the following. The issue is that about education of investors. So now with this has been educated, there are two, there are two parties. So you have issuers in the retail customers, investors customers. In traditional capital markets where I came from originally, you had qualified investors who know how financial markets work. And that been for hundreds of years, education has been done there. This is a brand new baby, it’s only five, six years old. What do you expect? It takes time? The same way? Like Like, with, with Bitcoin, for example, people joke, it’s only 10 years old. What do you expect? Right? So it will take time to educate everybody. That’s number one. Because in specifically, if we’re going after non accredited investors, it’s even more time to spend educating them because the most they have seen in capital markets. Therefore one case, that’s it, they don’t understand that well. And plus, when it comes to reg CF is restricted shares, people think, well, where’s my liquidity, that’s another issue for REG CF, you got to worry about liquidity. So there are no secondary markets yet to liquid to do reg CF, once we create the full cycle, from buying, issuing proper investor relations, process protocol, communication with investors and then liquidity only then when the full cycle is completed, then you will see volume, my guess, and that you easily the next three, five years, it will take to to get there but not not earlier than that. That’s my personal feedback from working at different capital markets in New York and London and Asia, from traditional capital markets. Jason.

Jason Fishman  16:35

Yeah. And I definitely think that is a realistic timeline, I’ve stopped making my own predictions, have used an analogy of hurry up and wait, in terms of equity, crowdfunding growth over the past few years. And I got involved late I wasn’t involved in 2012. Oscar, I know you are a big part of the growth I have other individuals in the network that were also involved in the early days of the job that JOBS Act, when it was first introduced to me in 2014. I thought it was going to be into effect in six months. And it wasn’t until May 2016. I’m probably bringing back memories here. But it wasn’t till May 2016. And a lot of false starts in terms of dates that were you know, penciled in till when it actually happened. So the same is true with this expansion, of course. And yeah, I think three to five years is really appropriate to look at for adoption, there’s certainly been surprises that I’ve seen in the past 12 months, even from, you know, stability in the market, buying dips, all different types of occurrences that I wouldn’t call textbook in the past 12 months, saw recent studies on how retail investors are surpassing larger VC percentages in the markets. So you know, who knows what’s to come. But I know I’ve been explaining to people in my day to day conversations, both business and personal. I mean, it’s pretty blurred at this point anyway, but what equity crowdfunding is I’m constantly explaining even, you know, today what, what investment crowdfunding is. So I think that awareness level, getting people to consider these offers, you know, actually getting them to intend and converting could be a while, I could tell you from the digital marketing angle, about 2% is a good conversion rate. Google defines an average conversion rate across the internet at 2.35%. Easier to say two, and particularly for this type of conversion that includes lower cost type purchases as well, too. So if you’re looking at 200 million, if we’re somewhere in the 4 million, 5 million range, that that would make sense to me. I could see it increasing substantially from there as well, too, as the concept of investing is brought more into more into modern day life, which it’s been happening, but I think shooting for that four to 5 million level Oscar per per your question is a good next goal.

Oscar Jofre  19:22

Yeah, I’m, for me, it’s not even so much about the prediction, but it’s good. Thank you for putting out that out there. I think Michael touched it, is that issuers need to understand that even though they’re working with the platform’s they also need to educate their ecosystem. So we can just give because, you know, I, there are some predictions right now for REG CF, which I think are are doable. There’s definitely going to be some unbelievable platforms that have are doing things like Revenue Share, Like Fanvestor and all these things. and models, which is great. And so I heard uh, you know, they’re shooting for half a billion dollars, which would be phenomenal. I mean, that would be double what we did last year. So the where what I’m looking at is, is to Michael’s point now education, right? And so I think this is for regulation CF or any regulation, crowdfunding, it’s about educating the market, the retail investor, about the opportunities and not so much about the opportunity itself. How does it all work? Because it what it really comes down to, I think, is trust, I firmly believe it’s trust, because we, you know, the one thing we saw in 2015 2016, was something we never saw an equity crowdfunding, where billions of dollars came online, from non accredited individuals, in a very short period of time, $90 billion was lost overnight. And we need to take that same investor who lost a lot, you know, might have been a couple $1,000. But in bringing them back in here and giving them the confidence, sometimes I don’t think we do enough to tell people the what it takes to be listed, first of all on a platform, and then what the platform needs to do, I just mean, because I think the work that you guys are doing a DNA, you’re driving all that traffic, you’re putting the messaging out there, which is great. The story on the company, boom, then they go there and go, Okay, what is this? I mean, this is Fanvestor. Okay, great, you’ll get spotlight, but what if they land on one they’ve never heard on a platform that, you know, doesn’t spend the dollars and marketing? Should they should be invested be discouraged because of not knowing that so that I think that’s part of the discussion that I’ve been trying to have with everybody now is, what are the other distributions? We’re not going to put it in terms? So in your mind, Michael, what would be the ideal scenario for you? So you got Jason on one side? He’s going to do the social media, he’s gonna bring you that. 2%? I think you said 2%. Right.

Michael Golomb  22:12

I think he, I think he has to bring me more. But, I’m in the middle. But joking aside. Yeah, please.

Oscar Jofre  22:22

Yeah. So if he brings you that, what what would be your ideal scenario where? Because you want to fill that cup? Right. You want to get that audience in there? You want to get it? Yeah. You know. So where’s the other distribution channels? Yeah, absolutely.

Michael Golomb  22:36

So Fanvestors, we are focusing on the influencers and celebrities, we’re helping them to monetize their fan base. So in our case, what’s exciting is that well think about the following. It used to take Superbowl to get together 130 million people at one time. Now, we have influencers like Cristiano Ronaldo, or the Rock, they speak to hundreds of millions, everyday with the daily engagement. So think so our goal, when we do our projects, they’re all correlated with its celebrity driven projects. And then celebrity is basically promoting the projects to their own audience. In this way, that’s how we create this, this extra momentum in viral marketing, because in respect in all the other platforms, they’re like Walmarts for startups, which is, which is fine, but they’re basically promoting unknown kind of entities to the world. In our case, we’re trying to go the other way around, where celebrities already have following base, they have fans, we’re just trying to bring to allow fans to invest in their businesses, or to collaborate on other projects with them. So in this case, it’s basically we try to double double the team where Jason and folks like IR marketeers have their own strategies when they go and try to promote and also then we have influencers who also do influencer marketing themselves. What we do is we create assets for them, just because social media assets are we we write for them things and we tell them when to post it, we because we understand their social media engagement level, and their participation in that we help them to promote, correctly promote securities products, because we’ve seen in the past that some celebrities tried to promote securities and they get in trouble the SEC, like Floyd Mayweather, for example, DJ Khalid, they all get in trouble suspended because they were promoting securities to non credit investors incorrectly. So what we are we that we are the their ambassadors to ensure that they do it correctly. Nobody gets in trouble and everybody wins. Jason.

Jason Fishman  24:46

Yeah. And one of the things I love about Fanvestor is tapping into those existing audiences. So if you’re looking at any of the talent Michael just mentioned, millions and millions have fans already exist, there used to be an equity crowdfunding calculator that could predict how much an issuer could raise based on their existing audience, I worked on a social gaming company startup 12 years ago is my first experience in fundraising. And our model is taking social audiences and then putting them through a monetization model of how much social games, we’re producing average revenue per user. And it’s, it’s very real, it is something that can be directly integrated into financial models. So when you think of all of the new education that’s coming out for retail investors and participating, you know how to really manage their assets, and what that means to build a portfolio over time, they already have a connection there to have a level of trust to the these brands to these musicians, athletes, influencers, to the point where it is a direct section of their identity of who they are as a person, based on who they’re following. So you then imagine the opportunity to invest, to partner with their hero. And it’s just very clear that the conversion rates, the overall audience growth, of you know, LP growth, that’s going to take place is substantially different. It’s revolutionary. And I’m not just saying that, because Because Michael’s on this panel, I’ve actually been talking about this concept for years in different shapes and forms, as more and more of pop culture is represented in these types of raises more and more of mass, you know, audiences, the general public are going to get involved in these types of opportunities.

Michael Golomb  26:52

Yeah, and this is when education actually happens. Because once we bring this we actually use those influencers, not just to sell, but also to educate their communities. And that’s, that’s the, that’s where this this is going to be. It’s like a ping pong game, where they’re helping each other explaining what they’re trying to do. Our goal is also to win, we’d work with those influencers, to explain to them, that it’s how they need to work. And when it comes to investor relations, not about just raising capital, but what do you do afterwards? How do you communicate? What do you support, because at the end of the day, wouldn’t want like, example, when TLC if you guys remember, TLC raised capital on Kickstarter, for their album, they did not deliver they for a couple of years. And then basically, TLC just disappeared, because people lost their faith. So our goal is not just to tell help influencers or celebrities raise capital, but also to educate them how to work with them after they raise capital, and what you know, things like that. So it’s education, both ways. Issuers, even if they’re big stars, and everything else, but also retail consumers who would like to participate in those offerings.

Oscar Jofre  27:58

Do you know what it will be interesting it because you are right, the influencer, we talk about it in very small terms. We don’t bring it up. There’s been some blow ups. Right, it hasn’t gone. But we should know that those blow ups occurred because those doing it weren’t doing it fully compliant. Had they done it compliantly I mean, think about it, it would have it would have been joyous. Because, Jason, to your point, what influence could that have? I mean, we saw one in reg A got blown up, right with Snoop, now with the heavyweight champion, but i this will be interesting to see the data, even in a very short window to see the impact. It would be interesting to see that alongside with any influencer and seeing the social impact from a social media side that you know, the ratio is now 3% If that thing spikes, you now know you now have something quantifiable as to why it occurred. Right? Because not so much that they it’s in the wrong direction. It’s all the indirectness that it has a ripple effect that’s an area that you know, there’s a few companies have been asking me about influencers where to get them and I you know, I thought about it a lot. And it’s not something you go through a Rolodex I could be wrong. I mean, obviously, you’re using it but Michael, because that’s your business. But Jason, I’m gonna ask you because you’re, you’re the service provider. So if you’re I am Jason, can you find me an influencer? Like, is that even possible? I’ll start with that.

Jason Fishman  29:44

So, the word influencer can mean so many things today, and you have nano influencers under 10,000 followers, and often some of the strongest engagement rates you have micro influencers kind of 10 to 100,000 In different metrics are used there 60,000, what have you, you then have this whole world of social influencers, celebrities, different types of thought leaders, and it can be difficult to choose which direction to go. If you’re you’re raising capital, you’re not selling the product. So it’s not necessarily your target audience. Although you could certainly argue that user owners are the primary group to go after here. But But there still needs to be something to legitimize the investment opportunity in many cases. So you try to find a blend of an audience that could have an influencer, that could could speak to both audiences could give an example of of [uncertain] solar, an issuer that we’ve worked with run our fourth round with them at this point. And on the reg A Plus, they used Bill Nye the Science Guy. So he checked the boxes in terms of industry expert, as well as influencer had over 4 million followers on Facebook himself at that point. Now, he posted on his Facebook and there was a spike for a couple of days, but we continued to use those video assets as an advertisement for the entirety of the filing, even some of the test the waters stages, we sought to be, you know, highly converting on different aspects of the offering page, not just the top presentation video, making animated GIFs and different types of assets, featuring, featuring that had to diversify and have more influencers for different stages of the year, we saw ups and downs with the performance. But that would be an example that that deal was put together with the founder and talent agent and you know, overall synergy in professional circles. That’s definitely a strong way to go about it, build a partner, you know, get it get a you know, authentic endorsement, there are also influencer networks. In fact, we worked with the an influencer network called Rat intelligence they raised on Wefunder did about a million dollars in two months. And they have a platform where you can supply creative and nano micro even higher level influencers can all opt into that. And it’s similar to to advertising costs. Now, as a marketer, I could tell you influencers can actually be hit or miss, meaning you’re always going to get a good media value, if it’s structured properly, but the conversions to follow which, that that’s what founders want to see, they’re not marketing to market in most cases, but to see a return to be able to spend, you know, 10, 20, 50 grand and get 100, 200, 500 grand back. So you know that conversion activity to follow those analytics are very important. Generally, when we’re bringing influencers to the table, we want to see a set of influencers and be able to optimize towards which ones are working best. If we put all of our eggs in one basket, we may be disappointed, where if we have enough of an A B test, enough variance, we can generally choose what’s working best. So you can go influencer direct, there’s a whole set of different influencer networks to work with. And they have changed over the past three years with different packages. And I’m a fan of the platforms where you can kind of pick and choose or supply something and get a high volume of them together. But you want to make sure you’re setting up the right analytics. You want to make sure you’re going into the campaign, knowing what you’re going to be measuring for each influencer. I’ve seen founders buying influencer posts for 10 25k get millions of impressions, but only a handful of investors and be very upset. So if you’re speaking to the influencers, if you’re speaking to the network, if you’re speaking to the platform, you’re building realistic expectations, and you’re willing to test that out that that could be something to activate. But know what you’re going to be pinpointing as success before you hop into it.

Michael Golomb  34:12

Oscar can’t hear you.

Oscar Jofre  34:15

Sorry, guys. Sorry. Sorry. I, I was I was I was listening to you. So it’s not it’s not just a simple cookie cutter. Here’s a Rolodex of influencers. I have some views on that. But you part of it is that if you bring in an influencer and it doesn’t match the theme, your business and all that the consequences are severe because if it’s just a person that just you know, you pay them to do a tweet, then they run it Oh, yeah. What company did you ask me a year? I don’t I don’t know who they are. You know it. It could blow up. Am I wrong to to think that way regarding influencers or is it It’s not that way. Jason, I’ll just ask you, and then I’ll go to my goal.

Jason Fishman  35:05

Yeah. So just, you know, quick answer to add to that. That is not an uncommon scenario with influencers. We used to go influencer direct back in 2015 2016, we would look at an influencer marketing campaign as 10 plus influencers. And there was all of these themed pages there, there’s a whole list of them on Instagram as an example, income tips, investor opportunities, these are names of pages that have millions of followers, and are pretty systematic, and how they they post for brands, you have to go through an approval, not naming any directly in scenarios and about to layout. But basically, we would have to schedule a post, and then follow up on the post and account for that in our planning, meeting. They weren’t posting on time, there was a whole management process and hand holding process, it was a lot of work, and then trying to track down analytics that they were receiving on the back end of their platform, there was a lot of holes in influencer marketing. And that’s why there was so many new networks to follow, then some of those became too expensive and blind in terms of what you’d actually be getting for the rates. The platforms are a big advancement from that. But Oscar, you’re pointing out a lot of things that need to be taken into account. And if you have the right protocol in place, the right standard operating procedures, you can still receive a very systematic type of, of campaign from influencers.

Oscar Jofre  36:44

And obviously with you, Michael, the, the influencer is the key to Fanvestor. I mean, it’s so that that’s the driver so and given the you’re targeting the influencers in the in the music industry, is there anything negative that could transform the other way? Right, we, we started with Snoop Dogg with one reg A deal, it really wasn’t anything he did wrong. But it, it will always be associated with him. It’s funny, people can barely remember the name of the company, but they remember him. It said, so it becomes love to hear your comments on that.

Michael Golomb  37:22

I completely agree with Jason. Well, what we do is because our team has bulk of our team comes from entertainment and media space, they know how celebrities work there, and how sometimes they’re elsewhere. So what we did is even if they sign agreement against to five tweets, or five posts, we realize through our first we did some beta projects last year with iHeartMedia with DJ Khalid Jonas Brothers, LA Dodgers, Ryan Seacrest, and much other folks, what we realized that we need to create things for them to post, even sometimes ask for them to allow us to post directly because they forget, or they exactly how you pointed out, they forget the name of the company or this and that. So what we we we have a team of four or five people who are, once the project kicks off with our issuers, they basically build assets for them. And we say, Okay, this is what you’re going to post this one, you’re going to post it, and even if you remind them they before, you have to remind them on the date as well. And as we tried to use their experience from previously to, to provide this assets and provide them the executive tweets and hashtags and things like that, what is gives us the following one, it kind of reinforces what we want the message we want to make. And the quality of we want to make an to it simplifies life for this folks, because they’re they’re busy people, and they have a lot of people trying to talk to them and try to get their attention. So this just simplifies the process. At the end of the day for many of the influencers, especially the ones that work with, they have, they have managers, they have lawyers, they have other their social media teams, so it really becomes like a teamwork and that’s how we try to at least de risk the process but is I agree completely with Jason it can happen every time sometimes people make mistakes and think so that that’s point number one point number two was the influencers today their influencers tomorrow they can they can say something incorrect and they don’t become influencers anymore and they lose their following basis. And we live today in today’s society where people judge a lot everybody, especially in social media, it’s like a double edged swords sword so and we as a company who work with with celebrities who are in music, art, fashion, TV, film, sports esport each one each one has a personality by themselves so. Oscar.

Oscar Jofre  37:31

Okay, here I am. I know I keep muting myself to hear you out. I’m I’m torn by it because I do know something I think of when the right influencer comes in what the impact could be. And we’ve seen a platform bring in an influencer, who happens to be Canadian, which is ironic. But nevertheless, the I find, I found out one, it didn’t do it for me. And I’ll tell you why. Because if you’re a avid fan of the show, and you watch it, it’s entertainment. But it’s also degrading. So, in this particular individual thrives on doing that, and in there are been number of episodes where, you know, there, what he does to founders is just unbelievable. And I get it as part of entertainment. Jobs Act wasn’t for that, right? It’s to me, I find it that to your point, having the right influencer can also be as important. So I, I’m torn by it, because sometimes I think, wow, you know, if we can get a movie star or football player, or someone, but it’s got to be someone that’s also has a nature to the business, right? You know, the guy who created beats the headphones, they started that write that, so they naturally flew the way in. But I think it’s an on top area. That’s definitely one form of distribution, that I think we need to explore more of it cautiously to Jason and both your points. But outside of the input. So you know, all of this is to assist social media, because we want the companies to be successful, we obviously will recognize education. So is there any other I mean, what is the other ideal dream? From you, Jason, what else do you think a company should be doing to complement what you’re trying to work on? to either increase the percentage, but also give them their success? And it? Because I think that’s the that’s the home we’re in now. Right? Because there are companies who come to me said, Oscar, I hired everybody. You said, I heard the video guy holding the social media guy hired this guy, though doing that. And they get all that but and then I’m going, huh? It’s not enough anymore. Now we got it. What would you think it is? Jason, from your view, from distribution?

Jason Fishman  42:29

Sure. And the word everything comes to mind. But I’ll add more narrative to it in this regard. So first of all, every deals going to perform differently, I try to think of these offline online scenarios. And, you know, if I was at the corner with a megaphone and talking about some type of offering different every hour, that responses would always be different. So just putting the same marketing model for two different organizations does not produce the same results, even for the same organization, but a different round. So that’s the first thing to take into account. The next is you really want to be everywhere, your your target audience is you could set up a priority list, we have groups that come to us and say, Hey, this is this is all the budget we have. And we’ll perhaps just work with them on Facebook advertising, because we know the consistency there. And that we’re bringing audiences that we’ve seen work on on other campaigns, they’re historical, equity, crowdfunding investors at this point. So that’s a more performance oriented Avenue. But but a big part of it is is the funnel itself, we can have these different traffic sources, we can use social media can look at influencer posts, maybe we’re getting talked about by different organizations or publishers that are pointing towards the deal as traffic sources. But they go into a funnel. And what that funnel looks like how engaging it is four touch points, seven touch points in could make all the difference. If I look at the traffic algorithm, and going from impressions, how much something is seen, whether it’s an ad or a piece of content, page clicks, how much traffic it’s producing, to the offering page or the next stage of the page, if it’s there directly, and then the conversions the conversion rate is the toughest part. It’s the single biggest variable that 2% I mentioned earlier, it is the toughest to to change. If it’s point 5% Getting it to two it’s it’s a whole art, a science around it, but in art for conversion optimization, and you know what those audiences encounter from the point of that first social posts to the confirmation page if a completed investment could vary drastically. So you know all of that to say, you want to do whatever you can to make that conversion rate higher. KoreConX just put out great industry metrics. And it shows that the majority of reg CF campaigns don’t hit seven figures, they don’t hit the full $1.07 million goal. So, you know, I’ve met founders raising 500k in smaller increments, but the majority that we speak to are always looking at the total cap, obviously pertains to their valuation and their offering as a full, but it’s very common to hear, hey, we’re trying to raise currently 1.0 7 million. Now we’re hearing more twos and threes and fives with the reg CF expansion. But the point is that if you look at startup success, if you look at startups, or early stage or any stage that are raising capital, the success rates aren’t, you know, in your favor, and you should be bringing any resources you can to the table, you know, in an intelligent way, you know, prioritizing, determining right budget allocations, but should be exhausting any tools in your shed to be able to hit that goal. So anywhere the target audience is you should explore in a determine the top spots to be first but be ready to bring more options to the table. If you’re not hitting the full cap, the full goal as the majority of issuers are not today.

Oscar Jofre  46:22

Yeah, it’s interesting. And you’re right, the stats are there, right, the raise is 308. The target is one, only 229 companies hit the the 1 million mark, which is still good. I mean, don’t get me wrong, it’s still but the greater percentage is still underneath it. And now we’re upping the limit, we’re going to see a different type of company that is going to really rely on these tools. So and that’s why I keep digging into the distribution side of it, you know, because up until now, all it’s always been social media. I just don’t I think social media needs help social media needs. Now we’re talking about the influencer. So people are gonna be, you know, looking around, that’s great, but cautiously walked through it. What what other distribution do you think would be helpful for you, Michael? Provided I guarantee you got ideally the best scenario where you’ve got the fans, but let’s say that, that they don’t, that if you just relying on something like that, it’s not enough. Where else do you think that distribution could happen for you that could complement [uncertain] to activities?

Michael Golomb  47:34

Yeah, sure. I actually would like to say that, I mean, working capital markets all my life on the other side, I think we’re being too harsh here. Think about the following are many startups that go to on a similar in Silicon Valley, and never get funding. Here, it’s the same as you should be the same approach. I mean, maybe some, some chemists should not should should not go and look for funding, maybe they don’t have a good business model. Maybe it’s just a hobby. So it’s it that also it’s I think they loose the results. I think in reality, if you look at the companies that actually should should get funding, if they have the right team, they have the right business model, they have a good mark strategy. They have some kind of it, then, because because we might think at some some, some might think that people just want to become part of a club, they want to invest, they don’t care, but invest results. They do. People do care, when they have, they were making $100,000 a year and they want to invest 5, 10 thousand, it’s a lot of money for them. It’s 10%. So we should not forget about that some companies just should not get funding period. And they are diluting right now. Now, that’s point number one point number two, who is going for a million bucks, that are maximum that basically early early stage startups. And they should, some of them should not get funding they should actually use their founders should invest their own money, and use friends and family to get this companies to a certain level. Now, with $5 million raise, you will have new entrants, new people coming in new companies coming in that that are ready to get to get funding. And they should be getting fun. They’re going to pass maybe the seed stage, they’re going to go to series, a round style. And this is the companies who should be getting that capital. That’s why I think for example, I’m more in the past was more interested in reg A companies, because they were more prepared to go for the public funds. So I think the statistics that do change from one to five, we’ll invite more companies that are ready to get external funding outside of funders initial investments. So the so I think it’s what we discussed with Jason is three to five years that will allow the real to get the right statistics and then make make this basis. Hopefully, this is an interesting spin to think about it because I’ve been I participated in many fundraising the past. I was lucky enough to work on some teams that we raised over $2 billion. Just the IPO in London was $435 million IPO. But But what I noticed that I also participate in I work with Stanford Ignite Program, or 500 startups, where some companies should not get funding. They just, it’s a good hobby business, but not a something to bring valuable business to bring outside. So I think we’re getting dilution. Yes, we get statistics over the last five years. But it’s too early to say it was only for companies that are can go up to a million bucks. And what are they really ready to get funding? Who knows? Jason, what do you think about this?

Jason Fishman  50:37

Yeah, it’s a it’s a great thing to point out. And, you know, even if you’re founder and you find yourself in a situation where you’re not ready that then the questions are, you know, how, what needs to shift what needs to make this more attractive to to an investor, something that can really ramp up in their position, can can grow in value, of course. So I think that’s a great thing to point out there, Michael, and, you know, leveraging your experience in that as well, too. And it’s, it’s a difficult thing on the marketing side to look at in many regards. I think the portals have become stricter, in terms of the criteria that they are analyzing before launching something on their platform as a result. And as a marketer, we generally see a starting budget, if we’re able to show a return on that starting budget within the test periods, it’s still somewhat of a positive, you know, activity for everyone involved. But I could tell you the success rates, and as you were mentioning Oscar, and, you know, the 308, being the average level, and less than 300, companies currently hitting that seven figure level, I’ll often hear groups talking to me about the percentage of capital before they’ve seen a conversion. And they’ll say, you know, with the portals percentage, and now we’re talking about marketing, we just think, you know, 15 20% is going to be too high. And in my head, I’ve seen campaigns where we’re running, we’re seeing the full cap raise, and we’ve spent 2%, on marketing, and with the portal there, they’re still under 10 In some scenarios, but but that’s, you know, few and far between, there’s still a lot of variables that need to be reached, it’s still a marketing, you know, campaign at the end of the day, you know, with the purchase, being aware of shares, and with it being an investment, but inherent, inherent variables, inherent obstacles with fundraising, and marketing on top of that, so you’re really looking to try to find a success, you know, scenario and then scale it up from there.

Oscar Jofre  52:43

Yeah, I think it’s pretty, pretty interesting to hear this discussion, because, you know, we can’t forget, you know, I have a banner in front of me every day, I remind myself of the Jobs Act, I’m 11 years in, right 11 years into this, and I’m still excited the way I was then. And I looked at it from a number of ways, obviously, the Jobs Act is to help everyday companies, whether they’re going to be billion dollar companies or not to be able to be able to capitalize their dreams. And if people believe in it, you know, whether it’s a dry cleaner, or a tea shop, or whatever it may be, to be able to do so. And I think that’s what we’ve done. We’ve achieved that goal. I don’t think there’s anything wrong with the fact that the average is 308. I don’t think that’s the issue. I think the the point is not many companies were shooting for the million, you know, we have a dental company that only needed to earn 50,000. That totally needed it. I mean, give him a million, what am I going to do with it? I don’t I don’t buy the building. I just needed to lease the equipment. And you know, if anybody knows the dental business, well, it’s a growth business. But the point is that it does scare me sometimes I do, or one of my scary theories that I have that I’ve spoken with David Weild about is that I feel the increase as much as we all need it. I think it’s a good thing, because it will bring a new entrant into the more established company as to what Michael said, I don’t want us to lose this smaller company. Because if we do, we we are we are becoming exactly what the status quo is. And so we spent 11 years saying that the status quo is not giving everybody a chance. So platforms are going to have to be very careful. In my opinion, they’re, they’re going to need to be very careful because it could backfire on them if they start not taking on deals. They’re already going to have one issue. They’re competing against broker dealers. So broker dealers are now getting into reg CF, which we didn’t see a few years ago. They’re going to be It’s a challenge on is own. But the point is they’re coming in. So everybody’s going for the top dog, because that’s where you earn it. But it’s the bottom that made it happen. Isn’t that ironic? And so I’m, I want to help, oh, it doesn’t matter to us whether you’re raising 10,000 50,000, or a billion dollars is irrelevant. I’ve, we’ve been on both sides. And believe me, I’ve the company that raised $50,000 owner forget us when it’s a lady that needed to open up a dress shop. And all it was was the equipment to create dresses, and she had a client base. And it was just like, for her. It was the one of the greatest things that ever happened. Does she need more than 50? She didn’t. Right? So yeah, so I think this is a great discussion. And regardless of whether you’re shooting for 100,000, 250, all of this is the same, it doesn’t really change the fact that you need to do these things to your point, the social media, the the influencer, I’ll throw another one out there and distribution that I think companies and providers and platforms need to work alongside our newsletter providers, would people call them publishers, people, you need to distinguish the difference between the two, you know, an online magazine, like Forbes and TechCrunch, and all the publishers, people like Palm Beach are newsletters, they have a investor base, they write stories about companies. And if you can get in, they’re great. And they’re not the only one, there’s hundreds, if not 1000s. That’s another distribution. Another one is RIAs, registered investment advisors, the very people that are advising investors, and I’ve recently learned what they were telling people about crowdfunding, like, it just blew my mind. But then I knew you needed to dig in and education one, they’re not going to recommend the deal on the private side unless they get paid. Isn’t that ironic, it’s about getting paid. So once you uncover that, it opens up the opportunities, and we recently did it with a reg A deal, never been done before a whole new channel of investors, that’s now available to the market, because we’re just all the time, as David weild always tells me and tells us all, the issue of the market is not about money, money’s there. In fact, there’s 36 trillion or $40 trillion, just in the US alone, just sitting there waiting to go to work. And on the other side, yeah, 150,000 plus companies every year looking for money. And the problem is just the middleware and trying to match it. And what we don’t what people think, oh, I’ll just go directly you can, because this is being guarded by particular let’s call custodians or intermediaries that get in the way. And once you start learning about all of it, boom, it starts opening up. So this is a great journey. We’re all in and I’m excited. I’m really looking forward to Fanvestor. And obviously, Jason will be working alongside that this is this is going to be a statistic that I’m looking forward to. I don’t know about you, but this is the one that I’m really looking forward to. I think it will change things.

Michael Golomb  58:18

Yeah, absolutely. I think Oscar, you hit an all every single point. I think what also we need to remember is that some issuers, they’re brand new, and they’re just afraid, posting what they need to do after they raise the capital, what the requirements, how reporting requirements. And that’s why I personally like working with you. Because you provide this this post funding support, you guys have this, you guys build this nice product, which for cap table management and supporting and being basically kind of sometimes a wall between those 1000s of investors and the issuer who’s new to the capital markets, no idea what to do. And you guys do that. So that’s I think you guys do a really good job supporting the issuers.

Oscar Jofre  59:03

I appreciate that. Thank you. Thank you. Um, Jason, did you have any closing comments for this afternoon?

Jason Fishman  59:10

Nothing specific other than I am looking forward to growth the same way. You gentlemen are the new players that will be entering the space you know, as you’re outlining here, Oscar, different types of institutional groups. I’m seeing more interest across the board from traditional financial markets and getting involved early stage bringing retail investors into play. I like how you pointed out you know, the the smaller raises as well Oscar and how meaningful those are. I’ve seen some of those take place even larger levels of 1,003,000 investors of about 300 Each, the majority of which being existing customers, the others being future customers. I’m seeing overlap and marketing These days with funnels that start with any commerce conversion, and then next provide an investment opportunity. We’ve already been doing it where there’s an investment opportunity, and then you put pushing towards very active customer bases embassador basis from those investors that are coming through. So just seeing more effectiveness across the board, particularly over the last 12 months, with more investors entering the market, more different groups that historically have avoided equity crowdfunding, now looking to position themselves at the forefront, and more success across the board, those numbers that you put together those success rates, it’s, it’s amazing to see them that much higher today than it was in many regards and many angles from a year, a couple years back. So like you said, it’s an exciting point for all of us.

Oscar Jofre  1:00:51

Yeah, I think it is, I think every year we keep adding to it, we keep adding more shareholders to it. So it we know we’re in a great momentum. I like quoting David all the time, because I mean, being the father of the jobs act he, you can for him, it’s exciting, right? He’s on version 4.0, which he’s going to announce very soon, of the jobs act or his new initiative, but it’s all part of this whole momentum. And it in we’ve got momentum now we got it with REG CF. Now we got it with reg A, it’s going to be fluid. And obviously, the two of you play a key role. Thank you so much for a wonderful afternoon. I love the fact that we could have discussions like this unscripted just on the fly. It’s the best way to do it for us. For everyone else. Thank you so much for joining us this afternoon. I just want to remind everyone, like I said, we’re four days away from March 15. On that very day, we are hosting a very special webinar called the state of the jobs act 2021. Featuring the Father the Jobs Act, former vice chairman that David Weild as well, Sara Hanks, CEO of CrowdCheck, and of course, Vincent Molinari, who is the CEO and founder of Molinari media FinTech TV, they will go and reminisce about the jobs act, how it got started, where it is and where it’s going. This is going to be exciting, a whole week of webinars as well for you to meet the portals the providers on the regulation CF and reg A. Till next time, Michael, Jason, thank you so much. We’ll be talking very soon everyone. Take care. Thank you.

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