KoreTalkX with Paul Karrlsson-Willis
SENIOR BUSINESS DEVELOPMENT LEADER Strong background in all aspects of the financial services business from sales and product development to trading connectivity and securities clearing and custody needs. Expertise in building and growing businesses by listening and working closely with clients especially in the global equity markets. Proven ability to build alliances, develop business partnerships, and sell into all organizational levels. Able to formulate and execute business strategies, plus anticipate and react quickly to client needs and changes in market structure. KEY BUSINESS STRENGTHS AND ACCOMPLISHMENTS • Building multiple profitable Institutional and International trading businesses from scratch • Breathing life into tired financial services businesses and turning them into the premier businesses in their arena • Developing strategic plans that significantly increase market share and revenue • Repeatedly implementing ideas and leveraging products across business lines to increase revenue • Ability to attract and build diverse client base: Wealth Managers, Institutional clients, High Net Worth Investors & Broker Dealers • Skilled at forming, developing, and retaining highly competent and productive teams • Proven sales planning and global product marketing capability • Current Series 7, 55,63 and 24 Licenses"
Entrepreneurial business development executive who brings ideas and people together for the delivery of new products and services to market. The start-ups that I helped found have produced a variety of innovative applications and new businesses with measurable results. They range from downloadable marketing and educational tools to custom digital signage to on-demand apparel manufacturing. Founding partner of Whimsy Rose, a print on demand apparel brand; which has produced and sold over $20 million worth of apparel through its in-house developed production system. - https://www.whimsyrose.com/ Founded AppWare’s, creators of Deskplayer, - a marketing application design company that produced apps generating over a million downloads for brands ranging from Sony Music to Budweiser, to Marvel. Developed, and delivered customized video delivery and educational communications tools for corporations such as Deloitte Worldwide, to the Pharmaceutical industry for the on-demand delivery of accredited professional development educational courses to Physicians. New Initiatives: A co-branded community-based photo-apparel label and an On-Demand consumer profiling/persona services company. (ProfileNINJA) by http://statanalytics.ca & http://www.didanalytics.com Specialties: • Strategy for Business Development • Maximizing Sales • Analysis & Forecasting • Enterprise Sales to Senior Executives • Program Planning & Implementation • Product & Market Identification • Communication & Negotiation
Peter Daneyko 00:00
Hey, Paul, how are ya?
Paul Karrlsson-Willis 00:05
I’m good, Peter. How’re you, my friend?
Peter Daneyko 00:07
Very, very good. Hey, I’m really excited to be here for our second bi-monthly Koretalks, which really is all about empowering private capital markets, from the issuers, to the investors to the intermediaries that make it happen, all while utilizing the Jobs Act and Regulation CF and Reg A plus, today’s topic has taken about 15 years to become pretty mainstream. And it revolves around the rise of ESG is my co host today is Paul Karrlsson-Willis from Invest Justly. And Paul is a veteran in the capital markets industry with 20 years experience. So I’m really excited to get your insights, Paul, and Invest Justly, your name kind of says it all, I think a little bit on the topic that we’re going to be jumping into. So I’m going to kind of turn it over to you today, it’s just going to be a real go back and forth. And let’s, let’s talk about ESG issues. And maybe we can discuss a little bit more about the definition, what it means and the evolution of it. How’s that say sound for sounds?
Paul Karrlsson-Willis 01:09
Sounds great, Peter. And again, thank you very much for hosting us and putting this together. As you said, ESG has been around now for probably 15, maybe even 20 years in various forms. And in various ways people have looked at it. But the investment is over the last 10 years, as you know, have really started pushing towards really looking at what values are and how you evaluate a company. In the old days, it used to be risk and return. Now its risk, return, impact. And that impact is in the EU on the environmental side as on the social side and chief of governance. And I think we’re seeing more and more of a push in that there’s more and more companies out there nonprofits like [uncertain] and B Corp labs, or B LAB should I say that are evaluating and finding criteria to actually evaluate these companies. And now I mean, that’s the exciting thing, that we’re slowly getting into that position to be able to put criteria and evaluation around around these companies.
Peter Daneyko 02:27
Hey, so you know, you talk about the environmental aspect of it. I mean, I’ve got family, we’ve got kids, and we hear about certainly my my my kids and my daughter in university. I mean, they talked about it all time. They talked about, you know, social impact, they talked about the environment at large, what do you think’s really changed? Because institutional investors were, you know, back in 2007, they were talking about it? Where do you think it was driven from the thing it was driven from top down? Or do you think it was driven from the crowd and the Internet and communication at large? What’s What’s your take on that?
Paul Karrlsson-Willis 03:04
I think it’s actually come from the investors, it’s come from a new wave of investors, call millennials, they have a different take on, on how companies should be run. And value, as I say, the risk return. And now impact. In the old days, when you know, you and I were coming up through the business, it was always money, money, money, what is the return? How much money is this company gonna make? How much profit? How much more profit can we get out of this? And I think the over the last 10 years, you’ve seen a change that, yes, you can still make a profit. But is there ways that you can make a social impact? Is there a way that we can protect the planet help society in various ways? So I think there’s been a huge push coming from that generation.
Peter Daneyko 03:58
No, I agree with you. I mean, I don’t even know if it’s just that generation, I think, the general awareness of, you know, even our generation, I mean, we’re a little little I’m a little bit older than not, certainly not in university in anymore. But but just that, I see investments as you do every single day, or potential investments because of the business that we’re in. And new companies coming to presenting. I mean, you know, and they, they tout themselves as ESGs. But I think the new startups are actually ESG is in a sense of, they’re building their businesses around, you know, the environment around this social social side of things in governance, you know, right from inception. And do you think they’ve got a leg up as far as that their ability to not have any legacy or infrastructure systems, let’s say a large corporation has and maybe we equate it to? Let’s look at an old automobile, you know, traditional automobile manufacturer versus a Tesla for per se. Tesla started with a mission a vision from the ground up and, and an environmental message and seem, you know, everybody knows that they’re leading the space. What’s your thoughts in that direction? Do you think it’s easier to start easier for a startup? Or is it hard?
Paul Karrlsson-Willis 05:15
It’s, it’s easier for a startup. Because again, you know, if you look at a corporation that’s been around 100 years, 50 years, they, they have a culture, they have a practice. And so you’re now asking that organization as a whole, to rethink a lot of the things that they’ve been doing for decades. Whereas you see, these new young private equity companies coming up these new businesses, they’re already using the ESG elements, you know, the governance and the social about making sure they look after employees, the salary, it’s already embedded in their culture as they grow. Which is a lot easier, you know, I kind of look at it from my old days as a soccer coach, getting a teammate at 14 years old, they already had bad habits, right? You had to change their mindset, sure what to do. And when when push come to shove, they would always go back to bad habits, it was just a natural instinct. When I got a team when they were six years old, then that was so much better, because I could get him to do how I perceived the game should be played. And therefore, it was so much easier because their first natural instinct was the first things that they’ve been taught by me as a coach. Yeah, and I wasn’t having to go back and re educate. And we change that and give them the confidence to make that change. And I think that’s the other key thing. A lot of companies want to make that change. But will it affect my profits? Is it really, is it really something that I should be doing? Or is this just a buzzword right now? Is this something that’s just fashionable? And will it go away in 5,10, 15 years, so you have all of those questions going on in these organizations that have been around a long time. But that being said, that being said, you mentioned Tesla. The other day, I saw all of these car ads, every car ad was EV. It didn’t matter at all motors, Toyota, whoever it was, everyone’s setting EV. Now. And so that’s interesting. I think, again, these companies have seen that’s where that’s where the consumer has gone. This is what the people want. And therefore they have met that demand, and all that moving in that direction.
Peter Daneyko 07:48
I mean, you hit on so many different things. In that, I mean, you talk about the kids, you talk about how much easier it is to, and it’s so much more fun. I mean, you know, I was sharing with it with the young kids. And you know, but I think I think there’s a relevant point there when it comes to new companies that are starting up because they, the CEOs, and these founders, and these principal visionaries that are looking at, you know, the environmental impact, looking at the social impact, and the government side of it, all of those things that ESG are all about. But do you think one of the things that I’ve seen recently, and we’ll we’ll touch on where crowdfunding and private equity comes into play a little bit later on, but one of the things I’ve seen you mentioned, EV spaces, I cannot believe how many new electric vehicle and battery related companies and private companies that are starting up and presenting their niches, maybe they’re not all saying I want to be a trillion dollar company. But heck, there’s nothing wrong with being a billion dollar private company. And, and, and is there that space for more of those niches? And I think, from some of the really exciting new initiatives in advancements that I’m seeing, I mean, when I see these presentations, I mean, it’s as as an entrepreneur, and at the same time as a, it’s just darn cool. I mean, at the end of the day, I just see, you know, from flying aircraft to this, that and the other thing. And I don’t think he’s going to be one player. I mean, I mean, historically, I was, I had concerns that, you know, the market is going to be all gobbled up by the large, large corporations that just keep consuming, and we certainly see that in the public marketplace. I’m hoping anyway, I think the new private capital market opportunities with regulation CF and Regulation A, A plus start that journey where where companies don’t have to become these big gulyas You know, that own everything. And can you have a lot of niche, you know, companies and what’s your thinking of that like? I mean, is there room for lots and lots of billion dollar private companies?
Paul Karrlsson-Willis 09:58
I think there is To start with, I think if we look at technology and, and, and the way industry as a whole moves forward, normally when there’s new ideas, there’s a lot of new ideas out there, and a lot of companies doing them. And then over a period of time they start merging and start growing. Right now we’re in that learning phase, right. I mean, you look at it and omics, for instance, that owns justly, you know, they have Italian motorbikes, they have tractors, they have mopeds out of Malaysia, they have two or three different systems to power those vehicles. And the idea is, it’s an ecosystem. They share information, they help each other grow and produce a better product, and also be a little bit more flexible, in doing so. And so I think you’re gonna see a lot more of that, you’re gonna see a lot more people come up with different power solutions. And we’ve got a few companies that we’re dealing with coming to our platform already on our platform. And they all have different solutions to being able to basically the you and I to be able to buy an Eevee car and not sit around for two hours waiting for it to charge. So we can go another 150 miles, right. So all of these things are going to have to happen, because again, if EV is really going to take off, then you need power solutions, unique or Power Solutions. You know, one of the things idea nomics has is wave, which is actually in the road. So a bus can stop on it when it drops people off and charge at the same time, right. So solutions like that are amazing. And that’s where the industry is going to go. But there is going to be a lot of companies coming out with those amazing ideas. And I think that’s what’s so good about the Jobs Act, which is 10 years old, now, the crowdfunding, the Reg A, these companies are gonna get the opportunity to raise money. And secondly, individuals that would not normally have had access to private equity now do so the normal investor in the street, can invest in these companies as they start and be able to grow with them and be passionate about them. Because it’s, again, doing having that impact and that social awareness that these investors want these days.
Peter Daneyko 12:31
And that I think that’s I mean, I mean, you’re one of them, many companies that are focused on the environmental space, you got you and it and omics, and just the more so than the many. So obviously, there’s more than what I would say an appetite, there’s a large investment community, I think the public at large is looking at the ESG and saying, hey, you know, we got to do things about this planet. And I’m, and I am anticipating that you just mentioned, there’s a lot of different technologies that are coming into play and different ideas, and doesn’t have to be a winner take all. You know, mindset is, will there be Oh, they’ve got a great charging platform for the home, they’ve got a great charging platform for. For say, you’re talking about buses, save for commercial vehicles, where, you know, schools, if they got their own on bus platforms built into, you know, centralized depots for school buses, does that have to be the same as what’s going on in in another space? Can you have a lot of more community based businesses, you know, maybe large that are getting built out? We’re seeing things where I’ve certainly seen some things that were small communities that say, you know, how do we bring vertical farming to a community? Right, and, you know, very ESG related, you know, from an environmental impact, but you do that at a micro level? I mean, you know, we live in this global economy and, and, and other companies that I talked to, on the large infrastructure side of the equation, they go. Well, you know, the biggest problem is containers are going being shipped around the world empty to go back from a location because of whatever the different logistical, you know, issues. And what if, and now you get these, you know, bright, bright minds that are combining technologies and saying, Hey, let’s do an eco farm, let’s, let’s put it in. And it doesn’t have to be that big. It’s going to it’s going to serve as a community of, you know, a half a million people, for example, or it’s going to be in a remote location, they can have fresh produce and vegetables. Those things to me, are inspiring. I mean, I really get excited, because because it touches, you know, the small communities in their backyard. It’s not just when I’m buying something, you know, on the web, and it’s being shipped and produced overseas or wherever that may be, and there’s nothing wrong with that. It’s all part of the infrastructure. It’s all part of where you know, the supply chain. that we live in, but just the belief that the opportunity is for those small companies to say, hey, I need to raise, you know, we’re going to dovetail into it, I need to raise, you know, $1,000,000.05 million dollars to do a test of this to get it off the ground. Maybe we can just touch on some of that you and I know, in a pretty fond about his back to the regulations that were discussed, you know, you know, a couple weeks back with David weild. And Oscar Jofre was, and a lot of people, a lot of our viewers and listeners may not know it. So you know, okay, I’ve heard about these regulations, again, I think it’s always important to, to bring them back to the to the surface. And so reg CF, for example, they’ve upped the limits, you can, private companies can now raise up to $5 million, from a non accredited investor and from the accredited investors, it’s far less onerous, as far as their ability to invest. from your standpoint, and you’re doing offerings in both CF up to 5 million andReg A up to 75 million. The the average investor, you know, from that perspective, where you’ve got 1000s of individual investors investing and an impact project that they believe in? What are the average investments? What are you finding right now, I know what our holistic numbers are just seeing what your experience has been? Well,
Paul Karrlsson-Willis 16:24
yeah, it’s, it’s, um, right now, I mean, certainly, when you get into crowdfunding, it’s probably around the 500. Mark. Again, you know, on theReg A side, I think that’s that those come in higher, you know, you’re looking at 1500. The interesting thing with with Reg A, is that because these companies are coming in looking for such a large raise, suddenly, if they’re in the 50, and the 75 million mark, they’re actually looking for us to reach out to more of the institutional client base. So they’re looking for us to reach out to the family offices, the VCs, the wealth managers, and we have a team of four investment bankers, as part of just that, who do just that. And get out there. But when it comes to, when it comes to the CF side is definitely more around the five 500 is probably the average. That was saying. And again, it depends on the product, right? It depends on the company. Sure. And so you’re passionate someone can feel
Peter Daneyko 17:32
about it. And the fact that the issue is get to set their mouths, I mean, what you’re saying, you know, what are the minimum amounts? A lot of it depends on on their offering. And a lot of it depends on are those investors actually more than just my fans, they’re my brand advocates through my evangelist, they’re my customer base. So there’s a dramatic, I think there’s quite a bit different messaging and a different story that’s going on now, where we’re saying it used to be all I want is, I want a handful of investors and give me a lot of money. Forget the fact that they may be yielding a big stick over my head to say, Are you executing on something? And in the mindset of having 10s of 1000s of shareholders, small investors was at it wasn’t that long ago, when people said, Why do I want 10,000? shareholders? Why do I want a million shareholders in a private company? Oh, that’s going to affect the institutional is that’s gonna affect somebody else. And it honestly never made a whole lot of sense to me. And I mean, that. I mean, there was friction points. Before that it was hard to manage large volumes, investors, technology takes it all away. That’s, that’s gone. It’s almost like to me, and and, and I’m not trying to be naive in this thinking. But I think the future says that, if I’m a public company right now, and I go, Well, we don’t want you to have a million shareholders on your cap table in a public public company. Or people would kind of what do you mean, why not? I want lots of shareholders in my public company. So if the technology is there, and the desire is there, and the wills there, why would I not want the same thing? In private doing agreeing to give democratizing capital would lead to participate? Yeah, that’s what we’ve had the opportunity to
Paul Karrlsson-Willis 19:13
out right? The job Zack was about letting every individual investing again on their cap table and invest in a company where they feel they have skin in the game, and they have a set. And you know, when you start talking again about ESG and impact investing, that becomes even more important, because people want to be involved. I mean, you have companies out there like John’s crazy socks, started by a parent for his son who has Down syndrome. They they employ over 50% of their people have different abilities. And so, people want to invest in John’s crazy socks because they want to see that impact. They want to see those people with differing abilities get jobs And they can do that by not just investing in the company, but then also buying the socks and sending them to friends as gifts for Christmas and so forth. They really feel like they’re part of that company. And I think that’s the change that’s calm. That’s the change that’s come through ESG and impact investing is people want to know, when they invest in a company, they’re not just making a profit, they are doing good in some way, or making an impact via environmental or socially, they want that, and as I say, the criteria that’s coming along, and the ability to evaluate that is the key element now in really, truly moving that forward.
Peter Daneyko 20:41
Well, yeah, I think I think you’ve summarized it. I mean, it’s more than the maximum maximum financial return that the investors are looking for, it’s going, how much do I need to make on this, I mean, we have enough things out there that allow us, hey, I want to gamble, you can go do sports betting right now and you want to hit it out of the park, you can go into the crypto space and potentially hit those vehicles exist, right? I mean, this is at the other side of the other side of the ledger, so to speak, when I say impact investing, and the reason the institutions are allocating X amount of funds to to impact investing, and I think more importantly, it’s becoming the risk is becoming minimized, the risk is minimized, because it’s making good business sense. For a lot of these companies. It’s it’s just takes a while for some of those industries. And unfortunately, a lot of the early entrepreneurs have to pave the way for the next entrepreneur. You know, when we come to things like we keep, you know, we touch on battery, you know, whether it’s battery technology, or whether it’s somebody that says, individuals in my community can contribute amazing things. And, and they can be they can participate wherever they’re from, and those can be financially successful companies to build these aren’t just benevolent, you know, endeavors so, so I think it’s, again, when I hear these stories from different companies, that is truly the most exciting and any entrepreneur out there understand that these these these regulations, they’re meant for you. And I’m passionate about this because I’m we’re seeing companies that had had no chance they said, You know what, I got it off the ground, I got on first base, I got on a second based now I’m you know, I’m now I’m doing significantly larger agents. And now, the institutional investors are taking a hard look at me, didn’t want to start, and I’m not, hey, I’m not negating that. But let’s be honest, it’s a little bit risk-averse for early on. So this just, you know, evens the playing field for that individual entrepreneur to at least control their destiny and their journey as far as they want to. And then let other parts of the investment community invest. So there’s different, you know, different stages, different tranches. And
Paul Karrlsson-Willis 23:02
Yeah, and there’s, that’s good. I mean, there’s a company in the UK called Elvis and crease. And what they do is make purses and wallets. And they make them out of old fire hubs. And old leather. These are all scraps. Basically, since 2005 175, tons of this guarded fire hose, they have turned into wallets and purse personal, right? They still make a profit. Actually, they give 50% of their profits also to charity. But they’re still a profitable company. And they are still doing well. So why wouldn’t you want to invest in a company like that, that is making the world a better place, right, and taking stuff that we just naturally throw away, and turn it into a very, very good product. It’s not a it’s a great product. Instead of buying another company that makes purses and so forth, that is basically not doing anything, really to help the environment, and social and governance. Right. And that’s the change, it can be done. And there’s a lot of companies out there showing that way. And what’s new, and you touched on this earlier with with the new, the new companies that are coming around, right, and is easier for them to do ESG and do that governance. And so one of the reasons it’s easier for them is they’re approaching business in a different way. They’re looking to see where the issues are. And how can I change that. So Elvis and Chris would the same thing. Okay, I want to make purses and wallets. How can I do that a different way? Well, there’s all this waste over here that we can actually repackage and turn it into a really, really good product. So it was a solution to a problem. And that’s what’s happening with a lot of these new businesses, they’re actually looking at it that way, what is not working. And there’s many, many examples of that out there if you if you truly look into it and dig around, and as I say, Justlys been going eight months, right? We’re an impact broker dealer, where we are truly going to make a difference. That’s why we’re here. And as the more and more we dig into this, the more and more we look at it, and we learn, it is amazing what can be done, and what companies are doing out there. And as I say, the narrative is now changing towards this. And impact being the key element of that people really want to start measuring that from the companies they invest in.
Peter Daneyko 25:46
And I know, and I agree with that, and I think you touched on something that I think makes a lot of sense to me, as you’ve got a lot of startups that are looking to solve problems. And a lot of them might find solutions to part of their problem, too, let’s say in the manufacturing sector, from another startup, that said, we need to recycle rubber in a different way. And there’s not some big Goliath out there that say, we’re going to jump in the recycling business, someone’s going, it’s that small company that says we’re going to do this. And that may, who is our customer base? Oh, we’re looking at as you said, the person manufacturer that only wants this so so the supply chain starts, I think, start to evolve, you know, even at a at a very nascent stage. But they start to these, I think these small private companies that are ESG focus, they start to coalesce. I mean, right now the current infrastructure has been okay, let’s, what are we doing from top down? You know, and I mean, we’ve all talked to her about over the years, I think it’s improved dramatically. But, but the whole idea of greenwashing and way washing and whatever we’re washing just to be the word of the day to be environmentally friendly, or, you know, or things like child labor, for example, in certain manufacturing facilities? Let’s be honest, it’s been around for a long, long time. Why did? Why did it not change? You know, why is it taking so long to change? We know about these things, the end of the day, it’s, we turn a blind eye, and we look at to see what the return on the investment is, until people start to realize that I can make a good return on my investment in environmentally friendly companies in better corporate governments from perspective of looking after, you know, what, what are the labor issues that we’re dealing with? And, and for those in the audience, when we start to drill down and say things like, you know, the term, you know, the environment? Well, what does that really mean? Like the companies that are dealing with these things? Is it? Is it resource depletion? Is it is a greenhouse gas emissions was, you know, the biggest one on the topic? Is it plastic waste? All these things? You know, they’re real, and I think, and they resonate, you know, with a lot of people, and there are companies that want to help solve those. But I really, really believe it’s going to be the 10s of 1000s of companies in the private marketplace, that are going to make those changes. And hey, you’ve been in the capital markets for a long time. I think a lot of people are surprised there’s significantly more money being raised in the private marketplace in the public marketplace, which is declining, right? It’s mining, when you look at the number of companies listed on the on the public, public stock exchanges.
Paul Karrlsson-Willis 28:24
Why Yeah, yeah. And again, right, there’s no need now for these private companies to go and become listed. In the old days, that was it, right? You start a business and as quickly as you could you wanted to IPO and get listed on the exchange. Now, the private, private side of the business is like, well, do I really want to be in that space? Do I really want to be listed? Do I really want to be governed a little more than I am being a private company? And I think the answer is not. And the original idea was being listed enables you to grow and be bigger. And I think we’ve found over the last 10 years that that hasn’t been the case. And again, the private sector to the listed, you know, when we again, you touched on the E element, which you had down pat there. That’s getting better to evaluate governance is pretty easy to evaluate, especially a listed company, because a lot of it is around their political contributions, that lobbying, executive compensation and bribery, corruption, how the board leader
Peter Daneyko 29:40
I mean, that’s a whole other conversation, right? When that gets into the political realm of cheese, what’s the function of lobbyists when pros and cons. There’s a big con there.
Paul Karrlsson-Willis 29:53
But that’s easily captured as far as being able to measure right for a listing company and also for a price A company to a certain extent. The hardest thing when you start looking at the criteria and a private equity company can put compared to elicit is getting being able to get the data you require from a private equity company to be able to gauge their impact, right and evaluate their impact. And one of the things that we’ve done adjustor yes, we’ve and there’ll be an announcement, hopefully, in the next week or two, we’ve teamed up with a company called proof of impact, and proof of impact are solely work with private equity companies to be able to evaluate what they’re doing and how to give them a form of ranking on where they stand as far as ESG or or impact. Because we as justly believe that anyone coming onto our platform that we are going to see is an ESG slash impact company, it needs to be evaluated, and it needs to be evaluated by an independent group. So again, that’s why we’ve kind of moved into that direction, because we believe it needs to be independent. There’s too many people out there, Syria, which goes to your greenwashing and so forth, so again, you know. Hopefully anyone who’s listening to this is aware of people like as you, so just capital, to nonprofit groups out there that do a lot of work, a lot of work at evaluating companies that are listed. And it’s important, if you really care about impact, and you care about ESG, you should be following those, those two groups, because they do a lot of very, very good work around the space.
Peter Daneyko 31:45
And I think we’re talking about governance, the governance side of it, and it just got me thinking about it a little bit. And I don’t know what’s out there. So private capital is being raised in the public, the marketing is all done, you know, to the to the individual investors out there. Social media is certainly big from an awareness campaign about the individual companies. And maybe we can segue into that a little bit on how successful companies are raising capital and, and all the key stakeholders that they need, and on the ESG. And there’s some discussions I’ve had with some individuals and firms where they’ve got some pitfalls. But on the governance side of it, they got me thinking was, what do you what’s your take on just the the crowd at large social media at large, I’m a private company. And we know some private companies today. And people are shocked when they hear these private companies with over a million shareholders on the cap table, over a million shares of your private company, because you can manage it from a tech perspective. But here’s the other side of that. You also have social media, this helps to keep these companies honest, they can be an evangelist, or they can be a detractor of your firm if you’re not doing the right things, especially in the ESG space. So I think you can be called out quicker, faster, easier. So I think there’s that just the global community that does impact governance, from that perspective, as well in a private company. So I don’t think the idea is to say I’m private company, I can hide, you know what I mean? Because you because, again, if you’ve got your customer base, and they don’t like what you’re doing, saying, communicating when they’re not going to continue helping you grow. And that’s the interesting when I say continue to help you grow, is the amount of reinvesting from existing shareholders in private companies was extremely surprising to me until we looked at the data. And I go, wow, I’ve seen companies that go 70% of their shareholders reinvested through multiple rounds, transitioning from say, a Reg CF to a Reg A, and companies are using these vehicles that need to raise a lot of capital. And in the ESG world, a lot of its infrastructure, capital. Those guys, I mean, that’s a long time journey. I mean, you’re so if you’re dealing with infrastructure, and that wasn’t really heard of before, I mean, to say you’re going to private investors outside of the bond world, for example, but private investors, small investors saying, oh, I want to, I want to invest in this firm that’s building something and in my community, then maybe it’ll be they’ll be able to have multiples of it in multiple computing communities. But as they’re doing that, they’re reinvesting when they see the progress, right. And, and that’s, and that’s, that’s compelling. It’s not just like a one time I’m done. And I’m going to hold on to it for 50 years, the reinvesting because it may be 50 years. I think a lot of people aren’t aware that one of the biggest changes in the private market is, hey, I’ve got a lot of old shifts share certificates to sit in my bottom of my drawer and I go every once in a while you call them Open you think they bank on the internet, see whatever happened to this firm. But today right now that the that ability to have some liquidity is starting is existing, and that’s the other side of those regulations? Yeah,
Paul Karrlsson-Willis 35:13
I think there’s two aspects to what you were saying that the first one I, you know, I remember reading a sales book many years ago called raving fans. And that’s the key element, right of any business is that you have the people that follow you, they love what you do. They’re the ones who sell you better than anybody else. And so when you have investors that are happy, who are continually buying into your company, they’re also spreading a good word about you. So I think that’s the key element. And again, like we said, when it comes to private equity, in a lot of cases, it isn’t always about profit, it is the impact element. So there is that emotional attachment more. So I think as we’re talking about ESG, there’s more emotional attachment to those companies. And therefore, if you’re doing the right thing by the investor, the investor is going to be a raving fan and speak to that. The other aspect that you were just touching on is how the private equity market is going to grow. And you know, more than anyone from your position or call colonics to obscene how quickly this has taken off over the last 10 years is ETS is a secondary market coming into private equity, that will then bring liquidity. So people will be more at the moment, as you know, with private equity, you buy it, you keep it until they either get bought by someone, or hopefully they become an IPL, right. If you start if you start bringing in these ATSs, and there’s a few around now, where the investor is able to get out or even buy more shares, that then becomes even more interesting to the investor. And again, we talked about risk and return. Part of the risk in private equity says she can’t get out those 80 assets will change that. And that will be the next movement in this space. And it’s something again, just Lee is looking at doing and hopefully having in place before the end of the year.
Peter Daneyko 37:25
Yeah, I, you know, we, we mentioned liquidity. And I’m looking over here because there’s some individuals or making some comments in the chat that maybe I’ll try to jump in and try to read and talk at the same time. But I’m not very good at that. I’m not one of those guys that multitask. I think there’s a fallacy to that. But some people may be but I’m on the impact side of it, though, as far as the investors go. It is that coffee table talk. It’s when you see progress. And I think when you see progress in a community where somebody might be you know, you, they may be a company that’s using recycled materials to build playgrounds. And they make that announcement and somebody says, hey, you know what, I invested in that company, and they’re building playgrounds all around the world, and they happen to be using recycled rubber for these playgrounds, are they’re doing something, you know, from an impact perspective that they resonate with? And they go you invest in that? Can I invest in that? That’s the groundswell you mentioned, it’s a what’s what companies like Kore has seen in the Jobs Act has evolved for the 10 years. Yeah, it’s one of these 10 year overnight awareness things. And it hasn’t been for the last two years. And COVID was a big impetus for that, where people were sitting at home and said, I didn’t know I could invest in that. Heck, I didn’t know until I saw it, the number of companies that we get introduced to and through its whether it’s through education, or whether it’s through Acts, actually, they’re saying, hey, how do we make this happen? I didn’t know that any of these companies existed. And at the end of the day, it’s building and building and building and it’s, it’s, it is the funding portals that exist, it is the broker dealers that exists that is the investor acquisition firms that exist. I mentioned all of these intermediaries, because one of the questions that comes up when when any, any company not just ESG space, they’re going, how do I make this happen? How do I how do I participate? Well, you need teams. I mean, at the end of the day, I mean, you know, you need and there’s specialists that are emerging in in Reg A and Reg CF offerings. I mean, I relate it to much like my, my family doctor, my family doctor sends me to a specialist. My lawyer sends me to a specialist, my tax, my accountant sends me to a specialist when it comes to certain things. And I think issues have to look at it that way. The technology is streamlining things, the awareness is getting better for these things. The awareness and the desire from the general public again in the ESG space, is saying they’re asking the questions, they’re saying, Okay, what do you guys what do you what are you doing beyond making me a dollar. And when it comes back to the, you know, liquidity side of, yeah, let’s, hey, let’s be candid. The ATS is in their nascent stage. You know, and you need a buyer and a seller for whatever you’re doing. But the fact is that never existed before. So when I talk about his 10 year journey, and all of a sudden, the last 24 months, I think there’s been like a 400% growth in Reg A filings for companies that want to raise private companies 20 to $75 million, you know, raises. It says something’s going on, right. But there’s the awareness both at the issuer side, there’s an awareness of the public side at the same time.
But at the end of it, it’s it’s the constant education. It’s like, it’s like doing what you’re doing is doing what these chats are meant to be opening that dialogue. Gentleman here was just chatting and it was will hold companies accountable via blockchain? Here. Okay. I made a comment in here was like, when cheaply made items made by children, we hold accountable. We hold companies accountable via blockchain. So obviously, I think it was alluding to the fact that blockchain is a piece of technology that has good and bad with it. But the brilliant thing about it is that immutable ledger capability to manage and track so much different bits of data, whatever, whatever purpose you might have. Whether it’s managing shareholders, whether it’s managing supply chain has related issues, whether it’s dealing with contracts, it’s just streamlining things. I mean, some people go, Well, if I lose my job, what’s, what’s the new job? Well, the new job is the new job. And I think we all have to recognize that. Yeah, changes don’t make things open up new opportunities. And that’s the hard part.
Paul Karrlsson-Willis 41:50
Yeah, I mean, that, you know, touching on various points that you had there. I mean, you made me start thinking of when, you know, when I used to work in the business in the UK, and the US went electronic trading. And the EU, the London Stock Exchange floor was your way will London ever go electronic trading, it’s just not going to happen. And within five plus years, they will electronic trading and the floor ended up being actually I think, a very nice restaurant. So, change does happen, and not everyone embraces it straightaway. The ATS is a move in the right direction, it is not going to go away. It’s the same thing with you know, loads of people said that you wouldn’t have Bitcoin around by now and Bitcoin is still around and various forms of it. You know very well with Blockchain because you guys use blockchain as clients. And I love blockchain. I think blockchain has a lot of opportunities in and again, part of it is it’s all about money. Again, we touched on this at the very beginning and the change of mentality. If you look at blockchain blockchain is the solution is the solution to equity settlement. And equity settlement going to zero is the solution if people want to embrace it, but if you embrace it, one, it costs money to do so too. How many jobs would disappear? How How would certain companies no longer dominate a space, if they give into that? And that’s the problem with some of these things. And again, ESG is no different from what we said, when you when a company has been around for 50 years, and you’re asking them to change. The questions in them is, do I leave? Do I lose being number one? Do I lose this? Do I lose this? Is it gonna work? That’s the problem with any new technology. Blockchain is a solution and a very good, very good solution. And I don’t think we’ve even come close to what that truly means down the road.
Peter Daneyko 44:11
Yeah, I know. I mean, you touched on a lot of different things there. I mean, I think too often we think of anything, that’s legacy bait, it’s it, whether it’s the financial markets, whether it’s in a small company, it’s not a zero-sum game, it doesn’t necessarily have to mean that. If I’m in the coal industry, and we’re all these employees going to go I mean, there’s big political debates on all that, you know, and there’s the, oh, the environmental green guys want to do this. Yeah, there’s costs in it, but it’s change. And, and I look at things really a little bit pragmatically, from a perspective of, hey, if I was living in the 1700s, and my kids were had to work, you know, under 12 years age, and was that a good thing or a bad thing? Well, darn, it’s a bad thing. Today, everybody goes well that chain It was good. I think we’re gonna see the same thing. 50 to 100 years from now where people are going to be going to change that. I can’t believe we did. That is what people are going to say. It’s no different than in the medical community where people go, Oh, my gosh, we seem like we seem so backwards back then. But it was the best that we had. But progress doesn’t necessarily mean people are losing their jobs and moving out. And I know that’s a big issue with environment in the ESG space. And they say this, it doesn’t have to be that way. I mean, yeah.
Paul Karrlsson-Willis 45:28
I mean, industry as a whole, right. And there’s, there’s examples of this everywhere. I mean, my example I always use is Norton and Triumph. Motorbikes out of the UK, they were the best motorbikes in the world. They knew they were the best motorbikes got the Harley
Peter Daneyko 45:46
Guys argue on that one, I don’t know. No, back, then. Back then, I’m not a bike guy. So I can’t go back then.
Paul Karrlsson-Willis 45:53
But the Japanese kept coming up with bikes and Norton and Triumph, like, they’re not nowhere near as good as us. The problem is, Norton , Tiumph, did nothing to keep moving that product forward. Because they were the best. And they didn’t believe all the other things coming around them, we’re going to impact them. And then what happens is, they get in financial trouble, and everybody else overtakes them. And, you know, one of the lucky things in my life is I worked for fidelity, and I had the honor of speaking to Nick Johnson two or three times and working with him on various products. And the one thing that always believed that was Kaiser is massive love Japan, love the culture. And Kaiser, more Kaiser moves is continually change just won’t changes, but continually move forward. And if you do that you never get left behind. You’re always open minded. And I think that is the key element here. Do you jump into blockchain? I’m not saying everyone should just dump everything go into blockchain. But blockchain has a lot of value, you should be looking at it in motion. And that’s the difference going hey, the old boys the good way, and that’s what we’re gonna do. You need that Kaizen element, you need to always be looking to grow, looking for change and making sure that you are always relevant.
Peter Daneyko 47:25
I think I think we know the blockchain is completely, that’s a huge conversation in so many different directions, and definitely not the right guide. No, and a lot of people are just really, really, there’s a lot of misinformation. A lot of people are confused. A lot of people think blockchain is Bitcoin, but like, its tokens, its coins. Yeah. That’s a piece of the puzzle. It’s, I mean, those are no results of blockchain. That’s not what blockchain is. And, and you’re right, at the end of the day, it’s all about efficiencies. And it’s all about improving things. But you hit a really, really good point. And for those of the, whether they’re listeners, or just people in general, or just when we’re sitting, having coffee table chats with friends that go well, what about, you know, you hear these, there’s two political sides of this. And unfortunately, Politics does affect the ESG world, you know, at large. So you’ve got one side going, what about all of these? You know, those old jobs? What about the miners? What about the gas? What about the coal mines? What are they going to do? And I would just think you ask anybody, any of those families, you say. Do you want your son or daughter doing what you had to do where your grandfather had to do 50 years from now? And they’re gonna say, Well, no, it put food on the table, and it did these things. Respectfully. Those are great jobs for your family at the time. But today, going forward, and this is me going on a little bit of philosophical or political talent. But But But today, the ability to technology is going to bring those new jobs, it’s going to bring those healthier jobs, it’s going to bring those for everybody. But but there’s a lot of friction points along the way. You can’t just flick the switch and say, everything’s green windmills are better. This is bad. There’s gonna be bumps in the road. But the last 100 years were huge bumps in the road. And it’s that continuous improvement, as you just said, from an individual level. I think we as a societal level, and as people have to say, Okay, this is going to affect me a little adversity today. How bad is the pain point, but tomorrow, the next step, and the next step and generationally, it will be better because it’s gotten better. I mean, there’s so so I think just having these discussions, I think are extremely important.
Paul Karrlsson-Willis 49:44
Yeah. And I think, like you said, it’s, we still need coal, right? We still need oil. We’re not there yet. But what should be happening and I think, you know, we touched on this at the very beginning about pro with equity coming private equity companies starting up with new solutions to problems, what I do see happening and we’ve got a couple in the pipeline right now, that can work with coal companies, and take the coal that’s normally just dumped and is treated as rubbish, they can turn that into another valuable piece of commodity, right? So there’s a change there, that’s a positive change, you’re still doing coal, we haven’t got rid of coal, but we can make more of what we are currently doing. And when those companies start working together to the solutions that we need further down the road, it’s not a big jump. You’re not saying okay, we’re no longer got coal, and all these people are out of work, you’re working in a way that is, with a focus on making something better, it’s not a lightspace element, just, let’s, let’s know where we want to be in five or 10 years. And let’s put that in place. And then we can re educate people. Right, both how to do this.
Peter Daneyko 51:08
Those companies are now part of part of part of the change companies that already exist. I’m a Canadian, oil and gas was a big part of where I went to school. And but those companies are now they’re looking at how do we change? How do we evolve, they’re not going to sit there, they don’t want to be a dinosaur. I mean, there’s we see too many companies that didn’t want to change, because it was always done that way. You know, I mean, it doesn’t even not even the non environmental, you know, spaces. When we look at the Kodak’s and the blockbusters of the world and said what happened? Well, they didn’t want to change because was going to change this oil and gas, coal, labor forces that are going on from a manufacturing sector. Hey, if somebody says, I’m not buying your shoes, because you’ve been exposed, you know, from a child labor practice, that’s going to affect your bottom line. And your bottom line is going to drive the directions that a company is going to get to take. So I think the some of the latest data that I heard was from large corporations, it was like 25, to 30% had like a four star rating, if they wanted, whatever the classifications were, for some of the rating agencies that you’ve talked about. So there’s a long way to go. But private companies today, I think, have a leg up, they have a leg up to be the Newton and I, you know, whether you like it or don’t like it, that they have the opportunity to do Tesla’s of the world, in their space, you don’t have to be a big Tesla, but you can be as big as you want to be and private capital raises will help do that. And again, I think part of the awareness from the crowd, and that, again, a visual the ability for individuals to participate and the ability for issuers to participate or have some options. Right? I think that’s I think that’s the big message.
Paul Karrlsson-Willis 52:57
Yeah, but I think the work as a broker-dealer, I kind of have to throw this in there. Again, the investor has to make sure that they know what they’re investing in. Right, they still need to do all the relevant research on these companies. Make sure it’s something that they should be invested in, and can afford to invest in. But the opportunity is great. Yeah, and
Peter Daneyko 53:23
I think I think you said and can afford to invest it, I think the regulations are there to also the reason there’s regulations to help protect the investors. I mean, because you know, there are limits and caps for the individual investors. But they do have choice. And you’re right, as a, as a broker dealer, which is absolutely critical. You know, as far as the intermediaries in the in the ecosystem for these regulations, some regulations, you don’t need a broker-dealer, I shake my head and I go, you better have a broker dealer, there’s, there’s more to it than you think. You know, go and try to manage KYC for, you know, 10,000 people one afternoon, and you’ll see what I’m talking about, but, but come back and taking a step backward and looking at, yeah, the investor. And the messaging is another important step here. So one of the things for issuers out there, you said, the investor needs to understand what they’re investing in, the issuer also has to have a different narrative. Because I need to be able to speak to you with the amount of reams of data that are out there with the distractions that are out there. I need to be able to tell my story. So the people ask me, What are the successful issuers doing? And I said, Well, they’re hitting the raises, I guess they’re successful, but they’re hitting their raises because they’re not just they’re not selling data. They’re not just selling financials. They’re not just selling the potential to make money. They’re telling their story. They’re saying this is where we’re at. This is where we’d like to go. This is how you can be part of our journey as an individual investor. And if you’re not telling your story, I think you’re going to be struggling. If you’re just giving the data you need to inform, and the regulations say, Hey, you better you’re going to reform the investors about your investment because you protect them. But with only so many minutes, or hours or days in a week that an individual has, they’re going to say, what’s going to grab my attention? And yeah,
Paul Karrlsson-Willis 55:28
Yeah, and I think that’s the key thing, when when you start speaking to issuers that are looking at CF, Reg A, or even Reg D. You know, one of the things that we always tell them is, hey, there’s no guarantees here, right? You may be on our platform, you may be out there, you may be doing a raise. There is no guarantees. And the key element is exactly what you said, the issuer has a huge role to play in, it’s not just the platforms, not just the broker dealers like ourselves, the issuer has a key role, they have to be out there, they have to have the right message. Now we’ll help. As I said, we have an investment banking team, we have a marketing team will help with that message. But we can only do so much the issuer has to have a good message has to be able to punch above its own weight to get that information out there. And I think that’s that’s one of the things that some private equity companies don’t understand. When they come into it. They come in, they have a TA like you, they have a legal group that gives them the form see in the form, maybe they get past the SEC, who say, Yep, you’re a good company, people can invest in you, they get on a platform like ours, and then they think that’s it and ensure he isn’t, there is a lot of work that has to go into this. And again, the ones that are successful, like you said, have a very good message. But they are also out there pushing and pushing and pushing behind the scenes.
Peter Daneyko 57:04
Yeah. You’re the vehicles are there, right? I mean, the vehicle, the vehicles there, you can reach I don’t know how many what’s the the size of the global investment crowd because investments around the planet, you’ve got like 2 billion people now you gotta communicate with them. Right now you’re gonna narrow it down, obviously, it depends. But again, the messaging is who want who’s going to hear your voice in the in the most cost effective manner. And, again, with today’s conversation was on chat, which I thoroughly enjoy and passionate about the space, I love this. But on this space, who hears your message as best I this was wasn’t a specific, but I think it’s analogous to the ESG space, I had the opportunity at a medical summit a couple weeks back, sitting down with physicians, and some physicians that were were entrepreneurial in nature, serial entrepreneurs, they just happen to be physicians. And they were in some high medical tech spaces. And a comment that was said, and I bring it up because it’s touching the audience that relates to you. And the doctor had said to me, he said, You know what I really, really like about this, Peter. It says, my nurses can invest. And I said, What do you mean by that? He goes, I’ve been doing this for a long time, besides my practice, and he’s a surgeon. And he goes, we created all this intellectual property and patent and materials and we just created a companie. And my nurses go, Doctor, how come I can invest in your companies, and they couldn’t invest right now going? So. So what is this giving you? And he’s saying? Well, I have the ability to reach out to one people that couldn’t invest, but two that understand the impact. So I bring this back up because it was the impact, the impact that that physician was going to make on the quality of lives of individuals, and then those that knew the impact better than anyone else were those that couldn’t invest in his company. And it was all the nurses that dealt with it every day. That to me, that’s that’s when you talk about focus on on, on your audience. And
Paul Karrlsson-Willis 59:06
Yeah, and I think that’s the key thing. I mean, that’s, again, something that that we tell investors all the time, certainly on the retail side is, you know, invest in what you know, right? So that would be the nurses, right? Invest in stuff that’s in the medical field that you know, you know, if it’s going to be good, bad use, right. And now, like you say, because of the Jobs Act, they have that opportunity, which is great. And also invest in stuff that you’re passionate about when if you’re normally passionate about something you already have done your research, you know about it. But that example you gave is his perfect for what crowdfunding. And the Jobs Act was really trying to do is is get people, the normal investor being able to invest in opportunities that were only a select for you used to be able to get in animpact related.
Peter Daneyko 59:55
So on that note, I think we’re at the top of the hour It’s a pleasure, Paul, Koretalks are going to continue every few months, I hope that we can have another chat like this and, and it’s been a lot of fun.
Paul Karrlsson-Willis 1:00:10
Thank you very much.
Peter Daneyko 1:00:12
Any closing thoughts?
Paul Karrlsson-Willis 1:00:15
You know, I think I think you know, the what I would leave with anyone with ESG is you know, his is going to change right and it’s not a perfect world right now, more and more criteria is coming in, more and more companies are coming in and, and looking at the criteria and being able to evaluate it. And that’s what you need to do. If you’re getting into this space in the impact investing space, do a little bit more research, make sure you use the tools out there. Make sure you’re using the proof of proof of impact or, as you saw just capital use that information because there’s a lot of companies out there can help guide you and give you the detailed information.
Peter Daneyko 1:01:00
Starts with starts with education. I will let you go and again, an absolute pleasure. Thanks for my excellent Thanks. Bye bye.