How Do I Prepare for My RegA+
CEO and Co-Founder
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.
Regulation D Resources
Douglas Ruark is Senior Principal for the Denver, Colorado office of Regulation D Resources, Founder and President of Regulation D Resources Enterprises, Inc. Mr. Ruark began his career in corporate finance in 1992 with Heritage Financial, Inc. a company he co-founded that specialized in sourcing commercial real estate and corporate debt financing for commercial borrowers. In 1994 Heritage Financial was merged with InvestCap Partners, a Washington DC based corporate investment banking firm. Mr. Ruark assumed a partnership position in InvestCap Partners and was tasked with managing several areas of corporate finance for the company including real estate syndications, transactional risk assessment, Federal and State securities compliance, and investor relations. In 1999 Mr. Ruark served as a primary founder of Regulation D Resources. The Company was formed for the purpose of providing private placement offering advisory services to corporate clients. Regulation D Resources currently provides SEC Regulation D exempt and Regulation A+ exempt securities offering preparation and execution services. The Company also provides custom software solutions for management of investment compliance processes. Regulation D Resources has provided advisory services for over 5,000 securities offerings since 1999. In 2015 Mr. Ruark was instrumental in leading the team responsible for development of Regulation D Resources Investor Portal Compliance Management application. The web application provides for public promotion of Regulation D 506(c) and Regulation A+ exempt securities offerings and handles all compliance, subscription, and investor verification processes. The critically acclaimed software is now on build v2.3 and has been used to manage compliance processes for hundreds of private placement securities offerings. Mr. Ruark holds a degree in Economics from Elon University in North Carolina. He is regularly scheduled as an expert speaker at various venture capital, real estate and corporate finance conferences with regards to private placement offerings and the syndication of investment capital.
Etan Butler is Chairman of Dalmore Group, a FINRA registered national Broker Dealer Investment Bank, founded in 2005. Dalmore provides a full range of investment banking services, and specializes in assisting companies that seek to raise investment capital from individual investors through the SEC’s Regulation D, Regulation A+ and Regulation CF. Dalmore is among the most active Broker Dealers in the world for Regulation A+ offerings, having served as Broker Dealer on more than 60 such offerings in the past 12 months – including some of the most successful Regulation A+ offerings in history. Mr. Butler and Dalmore Group also provide business planning, development, and capital introduction services to public and private companies in a range of industries, and have participated in various capacities in significant investment, development, and other structured transactions. Over the course of their 15 years of investment banking activity, Mr. Butler and his team have been involved in the development of cutting edge and regulatory compliant approaches for the management of business development and the oversight of complex due diligence activities in the heavily regulated area of U.S. and multinational transactions. Mr. Butler is also President of EMB Capital, LLC, which invests in early stage ventures with a focus on real estate acquisition and financial services. Mr. Butler is a graduate of the Yeshiva University's Sy Syms School of Business. He is married with three children, and lives in New York.
Oscar Jofre 00:00
It looks like we’re just going to be going live here in about 35 seconds on YouTube Live. So I got a little bit of a guesstimate. Thank you for your comments. I really appreciate that. So it’s great. And Douglas. It’s amazing coming full circle in all their sweet little while so. Okay, so here we go, we are going to get things rolling. And first of all, we obviously want to just get welcome, everybody, of course to the KoreSummit webinar series 2021. My name is Oscar Jofre, I’ll tell you the rest all about me, but you can find it online. But the real key people today is are my fellow panelists that are here that are going to we’re going to have a great discussion. So if you’ve been to our webinars before, it’s pretty straightforward. We are no PowerPoint slides. No, no propaganda, just basically thought leaders that are doing the day in and day out giving you their experiences related to these amended regulations that are happening. So the format is simple, one hour, 45 minutes of us chatting a bit. And then 15 minutes, there’s a little button there at the bottom, you can put your hand up and ask questions. And of course, just so you know, all of these webinars are recorded, you can find them at KoreSummit.io You can also find older speakers and all their contact details. That’s right, you don’t you don’t have to give up any information to us. You can reach out to them directly and start engaging but but before we do that before we get the topic started, let’s hear from our panel. Let’s have the introductions first Etan please
Etan Butler 01:50
so thank you Oscar once again I become somewhat of a regular on on the KoreConX panels and Oscar you’ve done a good job making it a lot easier for the viewers back in the day. We used to have to give our our name and and our email address back when it started. But now the KoreConX team has made it really easy and kind of put everything together into into one into one platform. So my name is Etan Butler. I am the chairman at Delmore Group. We are a FINRA and sec, registered broker dealer investment bank. We are headquartered in New York, active and licensed in all 50 states founded in 2005. Our roots are in investment banking and corporate advisory. And we’re still quite active in in investment banking today. Since 2015, or so we’ve been really immersed in the revisions to some of the JOBS Act born exemptions that took place at the time. In particular, reg d 506. c more recently reg a which is why we’re here today and also reg CF on the reg a side we are we’ve been extraordinarily active over the last year and a half two years. We currently have close to 100 reg a offerings Reg A clients. A number of our Reg A offerings have we’ve been fortunate enough to be the broker dealer on some of the most successful Reg A offerings in history. Meaning offerings that have raised their full offering objectives and have gone on to either launch another Reg A or who have are now listed and traded on NASDAQ or on the OTC or the Canadian exchanges or the Frankfurt exchanges, etc. It’s something that we live and breathe. It’s something that I personally and talk with, you know, I every half hour of every day It feels like I’m talking with another company that that’s considering launching a Reg A, I have a lot to share. It’s a passion of mine, and I’m really pleased to be here.
Oscar Jofre 03:50
I forgot I muted myself. All right, Douglas, we have a new guest that most if you’ve attended our our webinars, I’d say it Tom alluded to, but it’s always good to remind people, you know, sometimes we pigeonhole companies into what they do in Delmore, it’s very wide. you’re you’re you’re meeting all the requirements of all the different regulations, which is great, and Douglas is a new partner in our ecosystem. I’m really excited to have Doug here because it’s a it’s a role. People don’t actually understand why it’s so important. I call it a quarterback. And if you all love football, and of course don’t forget Superbowl weekend. You know, the quarterback plays a really great role, but it’s part of a team. So Douglas, please.
Douglas Ruark 04:38
Thank you. Um, so my name is Doug Ruark. And President of regulation D resources. We have been operating since 1999. And our core focus is the advisement and preparation of regulation D and Regulation A plus securities offerings and So our our real, our role in the process is to work with clients that are looking to execute a securities offering, and need to get everything structured, they need to get all of their offering documents drafted, they need to go through the filing process with the SEC. And then, you know, typically we’re there to provide compliance support as they move forward and execute their offering. We were huge proponents of the JOBS Act and five oh succeed, we were actively lobbying the SEC through the 2000s, as we watched, social media develop, and the internet develop, and we saw all these great tools for being able to go out and promote an offering and engage with investors. And, you know, we were all working with these antiquated rules of the old you know, reg D, private placement rules where you couldn’t generally solicit anybody. So, you know, for us 506, C, was a was a revelation, as far as democratizing people being able to go out and raise money, and also with Reg A plus, and being able to, you know, streamline that process and provide a good middle ground between doing a reg D, but having the, you know, limitations of a 506 C as far as accredited investors, but not going to a full s one registration with all of the compliance and the regulatory overhead that comes with that. So, so we’re big fans of, of both, we’re really excited about Reg A plus, we feel like it’s a great solution for a lot of companies, and really excited to be part of this panel. And, you know, give some people background on what it takes to put one of these offerings in place. And obviously, the preparation work needed to come into the process, and have it be an efficient process to get to the point where you’re qualified, and you can launch her off, right?
Oscar Jofre 06:51
Perfect. Well, that was quite the intro downtown. So you guys gonna have to find it, that I’m not your traditional. I like to spark it up a bit. Because I know what it’s like sitting there, you know, 1130 in the morning, some for some people take 30 in the morning, sometimes later, we’re very thankful for you sitting here patiently to listen to us. And you know, if you’ve been listening to a lot of our webinars have been we’ve been taking the topics. And by the way, the topics came directly from people who come to meetings and say, What about this? What about this, what and we make them into webinars. And in sometimes, even though the webinars we keep coming up with new topics, as we’ve done in the last couple, but today, we’re going to talk about how do I prepare for my Reg A plus, and this is, this is a little bit different than you know, what we’ve talked about before preparation is, you know, quite often, there are those who already have experience raising capital, so they kind of know that. But the real question is, where do I start? You know, that’s a fundamental question, is it? Is it Gloria, the auditor, the broker dealer, the investor acquisition, I’m going to start with you, because obviously, you’ve had more offerings and brigades. So you’ve seen everything from A to Zed. So, but if the ideal client came to you today, and whatever stage during where do you recommend that they start that process?
Etan Butler 08:10
Right, so So first, we always suggest that you get a experienced securities counsel, to talk about what your options are to talk about what you can and can’t do. And, and ultimately, their their role is to advise and help you draft your offering circular, which is called the one a and ultimately file your one a with the SEC, seeking qualification from the SEC. Right? So that’s a process that could take some time. And and that allows you to really understand what you can and can’t do and, and you can bounce some ideas off them if they’re experienced enough about, you know, what’s the right valuation, what’s the right structure, what’s been your experience with any jurisdiction issues, what type of investors etc. So that’s an important place to start. The other thing that you’re going to need is you’re going to need audited financials, right. So for a Reg A you need two years audited financial statements, if you are a new company, then obviously you don’t have two years. If you’re a brand new company, you need to audit nothing, right? But it still has a cost and you still need to do it. So you need you need an audit, right? So you’re gonna want to find an auditor and you’re gonna want to find someone who’s cost effective and, and has time to really, you know, deliver in the timeframe that you need. Once you have those in place. You’re going to want to engage a broker dealer. At latest, I would say three weeks or so prior to your securities attorney having a draft one a ready to file with the SEC, because that will give your broker dealer the time to run their bad actor checks and due diligence and answer any questions that you might have. And it really be a value add to bring in other resources beyond just the broker dealer role, right? So there’s a broker dealer, then you’re going to need you’re going to need a To decide what type of technology you want to use, right there’s, there’s, there’s plenty of choices that you have, you could choose to list on one of many marketplace type platforms out there, its pros and cons to that. Or you could choose to do it yourself and have your own offering page or an invest now button installed right on your home screen of your website, right. So those are options that you have. And there’s pros and cons. And we have a lot to share about about that as well. So then you have the technology, and then you need to think about, okay, I have an offering page, whether I’m listed on a marketplace, or whether I do it myself, trust me, you’re going to need to do, you’re going to need to really have a solid marketing plan, you’re going to either take investor acquisition very seriously, for some issuers who are fortunate enough to have celebrities as their partners, they might be able to leverage their millions of followers for others who are lucky to have to be consumer product brands and have hundreds of 1000s of loyal users, congratulations, it may be a lot easier for you. But for most people, they really need to take investor acquisition very seriously. Because ultimately, you’re going to pay the money to have a live invest now button on your page. But guess what, no one’s going to go there until you help them get there and let the world know that you exist. So investor acquisition is critical. And as this PR, right. And so investor acquisition is obviously very important. You know, and that’s something that you want to you want to focus on sooner than later. Because, because that goes into who your demographic is, that goes into what your investment minimum should be. So you want to leverage their experience that they’ve had with similar clients going through this process before, because that’s going to impact everything from the content to the to the marketing to the strategy that you have going into it. And obviously, you’re gonna need a transfer agent, right. And, and really, you know, the transfer agent is a critical role. And it’s often overlooked. But the transformation is really after the race is done, you know, when everyone else walks away and pack their bags, you know, transfer agents to one that’s handling shareholder communication that’s keeping track of the shareholders and the cap table. So it’s becoming more and more critical, I think, and ask your spoke speaks about this a lot recently, to include the right type of transfer agent, it sooner than later right in the beginning, rather than later. And and, and that just brings more efficiencies to to the to the process and, and oftentimes, that’s considered the last step. But you know, I’m an advocate of of thinking about that at the in the beginning as well. So it’s not a surprise to you don’t run into any issues going forward. And those are those are really the main players that you need going into this. And, and, and you want to deal with folks that have done this before, right, you don’t want to you don’t want to try this out with someone who’s new. You want to you want as much predictability and experience as possible going through this. There’s a lot of moving parts. It’s seamless to folks that have done this before and have worked together with other service providers. But for the first time entrepreneur, it’s going to seem like a lot of different pieces. So anyway, I could go on and on. But I’ll I’ll take
Oscar Jofre 13:02
that. No, actually, Tom, thank you. I mean, most important, I think we let’s let’s make sure we all agree on this, because I think for those who are listening in the very first point, he said, it’s a securities lawyer, I think this is we’re all saying this to all of you all at the same time, securities lawyer number one, I think, you know, that may sound good to you, because you’re playing the quarterback role you’re getting, you’re getting them really at the stage where they want to do it. And they they retain the services of your firm, because you bring those pieces together. So obviously this is I want to concentrate on that part. Where do I start because I want to move into the next sport. This is an area we don’t talk about a lot, but I want to give you an opportunity to guide us through what you’re providing that you know what Tom was leading to.
Douglas Ruark 13:50
Absolutely. So a ton really hit a lot of good good points there. So our firm we’re really you know, we’re really on the front lines of actually getting that work done as far as the the drafting of the form one a working on all of the structure. our in house securities attorneys, you know, are there to to to prepare that file get it ready for sec submission. But I think you know, a couple things to touch upon. If you’re contemplating doing the Reg A plus, first of all is plan ahead. Because this is not a reg D offering. It’s not a reg CF. This is a heavy lift. And you know, you’re you’re basically doing an s one filing when it comes to the the disclosures. There are a lot of moving pieces, there’s a lot of players that have to get pulled into the into the game to make sure this offering executes properly. Transfer agents broker dealers CPAs. So I think the first thing that I always try and get people to understand and when we really try and push it in our social media is is plan ahead. Don’t don’t think you’re gonna get through this process. So in 60, or 90 days, it’s not going to happen. And part of it too, then comes down to, you know, when we’re working with clients, one of the things that I see is that they really kind of need to work on corporate cleanup. And a lot of times, we might be dealing with a client where they built their business, it’s a couple KorePartners. But they don’t have employment agreements with senior executives, for example. And so, so these are sorts of things that a lot of times when they show up at our doorstep, we’re having to unwind some things we’re having to do work with them on corporate cleanup. So I think it’s a big part of doing a Reg A plus and getting through it efficiently is understanding that it is a complex process, we’re going to need information. And I that’s another thing that I really stress with people is, you know, your one page executive summaries that that’s not going to cut it, we need detailed information on the company, its history, you know, cap table data, important agreements management team, you know, so and I can obviously walk through some of that I kind of have a couple, I figured I could walk through what a real estate fund will look like an operating company. But the point is, is some of the challenges and bottlenecks we see with people is that they just come into this process, not understanding the complexity of it, or they’ve come out of like a reg D offering a reg CF and think, hey, in 45 or 60 days, we’re going to be launched and raising money and not the reality. Now with that said, the time and effort. And in the money to put one of these in place. Yes, it takes longer. Yes, it’s a heavier lift, it’s it’s it’s a more detailed, complex process, but you do have a fantastic vehicle at the end of the process. And I think then, you know, what a Tom was talking about is also important, which is have a plan for promotion, you’re not just going to put your offering up on a website, and, you know, have subscriptions coming in. I mean, it’s possible, and there are companies that, you know, maybe have been operating for a long time and have really deep social media assets. And that’s the plan is they’re gonna go out and, and sell into their social media asset basis. But having that marketing plan, having the right team in place, those are, you know, those are really key. And that’s a big part of what we do that is when we engage the client, a lot of what we’re doing is, is helping put those pieces in place. But obviously getting that that that core part done, which is the drafting of the form on a assembling all the exhibits, getting it filed. So like I said, we’re really kind of on the front lines and dealing with the client there. And managing client expectations can be a challenge, because like I said, they may have a different, you know, they may have a different view of what this process ought to look like, because maybe they’ve done a reg D in the past. And so part of our job is to try and educate people on what it really takes to put one of these offerings in place.
Oscar Jofre 18:00
Yeah, it’s it’s true. I think we’re evolving as an industry. This is true. I mean, we’re calling 2021, the breakout year one, look at the gift we’re getting it’s official, we’re going to $75 million. He Tom touched in the beginning that how we all got started, we were putting pieces together, you know, putting pieces together was great. It people may go all locally was bad, you can always look back and say what’s bad, it’s not about the fact that it’s better. That’s what we had, then we’re moving forward, there’s a different demand occurring. Because there’s a different end game now and there. And it is true, there’s a lot of companies really have a misunderstanding of it. And we talked about all the requirements, we talked about having the lawyer, the broker dealer, the transfer agent, the technology providing investor acquisition. But there’s one area that I think we also need to bring out. And that is, you know, and again, this is purely from experience, because you’ve both been working with clients. So how big of a deal Do you think one needs, and I’m not going to say they show about Fallout or anything, because I’ve seen it once and I’ve seen the I’ve seen both and I’m sure time you’ve seen both, but it does change how you can roll out and I’d love to hear your comment on that. Because, you know, everybody should have this understanding all the different pieces that are going to be needed. And if you’re one person, you are going to get torn apart. I could be wrong, but your comments would be great on this.
Etan Butler 19:32
So that’s particularly applicable with regard to the fact that the online capital raising, you’re raising capital at in small increments for many people. And, and we’ve had offerings with 10s, of 1000s of of investors. And so Investor Relations become something that is easy to overlook. But very important, you’re spending a big budget on media promotion. And you have all these investors that are coming in 20 30% of them are going to click on the invest now button of your offering. But for whatever reason, they’re not going to make it through to putting their subscriptions, signing the subscription agreements, putting the credit card information and following through with the wire transfer. So it’s critical that you have a plan to reach out to these individuals in an automated way, where the your system says, Hey, mister investor, you, this is where you left off, you’re at stage two, at a stage five of the process, here’s a link for you to continue and to continuously send them that you’d be surprised that that really is very helpful in an automated way, you also need to have people that are able to answer the phone or even proactively reach out to folks that haven’t have not made it through. doing that with with one person is very challenging, right. So you either need to be prepared for that internally to have at least two three people you know, that are that are ready to monitor investor behavior and activity, who where each lead that has come into your ecosystem where they are and where they need to be, and reaching out to them practically, or you need to hire a, you know, a company that’s going to assist you in that process. Right. So as far as from a team perspective, I would say that it’s most applicable during the raise when you have 1000s of potential investors who are who you really need to complete the process. Right. Beyond that, you know, it’s it’s, you know, there’s not that there’s, I don’t think there’s a great need to have a extensive team internally, if you are hiring folks to do your IR and your marketing, that’s fine. There’s, there’s incredible companies, there’s more of them, they’ve gotten a lot smarter over time, they have more data. And what I love about the investor acquisition companies that we work with is more and more of them are turning clients down. They’re not just in a quick, they’re not just quickly trying to take all the money off the table right now they understand reputations key here, this isn’t a quick thing, we’re just getting started. And Reg A is literally just getting started. So the smart thing to do is to is to be cost effective to clients think long term, if you do right by them, and they’re happy, they’re gonna hire you month to month, three months for if you start off with a CF, they’re gonna hire you for the A, and this is a small community, right? The KoreConX community, as much as it’s growing, it’s still a cottage industry, right, we’re still all kind of together, we all know each other. And so, so but but the point point being is that you don’t need to have a huge team, you just need to have enough people or enough resources externally to really, really handle Investor Relations and, and marketing.
Oscar Jofre 22:45
And so on. On the other side, I mean that you’re right there see not providers. Now in selecting, we’re going to get to that question selecting the right partner, I’m going to, we’re going to nail on that one. But on the on the team side, obviously, Douglas, your firm is taken on, as you said, you know, if you come in with a one page executive summary, that isn’t going to cut it. And it’s not because you need that information. I just want to be very clear, it’s because the information you’re gathering is to file it with the SEC, it’s the SEC, that’s requiring it, but what burden or you know, what kind of resources do they need to have just for that part to make sure that they do it in a timely fashion?
Douglas Ruark 23:24
Yeah. So again, I’m going to drill back to that plan ahead. They if they’re going to come into this process, they really should have, first of all built some narrative out about your business, the company’s history, its products and services, its marketing plan, you know, have any key agreements, distribution agreements, and what have you have those in hand, shareholder agreements, employment agreements, bylaws. So coming into the process with, first of all, I have some information that that you’ve developed, it doesn’t need to be a perfect business plan. I mean, our our team here we’re going to be doing, you know, obviously, we’re going to be taking that information and crafting it into, you know, the proper disclosure language within that form on a. But to come into the process, if you want to be efficient, getting through the process, come in with some narrative that you’ve developed on the business, its forward plans is history. Obviously, you need the financials. We don’t need audited financials out of the gate. So I do have some clients where they get started with us. They’ve also engaged their CPA at the same time to get the audit stuff done. We need the audited financials when we’re ready to obviously file to the SEC. The other thing that I recommend is in your your state of domicile, where you’re operating is, is have a solid business attorney at hand. You know, if there’s changes to your shareholder agreement, if you need to adjust your bylaws, if you need a certificate of designation drafted, you should have a good business attorney licensed in the state where you’re located and operating. That’s that’s aligned with your business and You’re gonna want that anyways going forward. So I think when when people come into the process, they can help themselves by knowing that we’re going to need a lot of detail on the business. And again, I’ll make, you know, a comparison to a reg D, I mean, it’s a different level of disclosure. And then you know that that form one a is getting submitted and reviewed by securities attorneys at the SEC, they’ve seen 1000s of these. So so I think for for people looking to get through the process efficiently, a big part of it is going to be developed some narrative ahead of time, if you had a business plan, great, you know, that’ll that’s that’ll certainly help, we don’t necessarily need a full business plan, but we are going to need information on the business. And then part of our process is really kind of doing a forensic analysis on what has been sent into the firm. What do we need? Do we need additional detail on this related parties transaction, we need additional detail on this distribution agreement, you know, so that’s obviously just part of the process of developing the filing properly, is then pulling out the additional info from the client that we’re going to need. So and, you know, we do work with small companies that are doing reg Ace, and I think in that case, if it’s a, you know, a two person, team, three person team, it can be done. But at that point, then my suggestion to them is going to be, you know, try and use cat tech companies that have embraced technology, to manage processes. And I think that’s a big change we’ve seen over the last five to 10 years is the advent of using technology to manage securities offering processes, manage compliance, track people through these processes, and then obviously, stay engaged with them as a time said, it’s important that you don’t drop the ball on somebody that’s halfway through a process, and they’re interested in investing. And, you know, maybe they had a meeting, they had to go to follow up with them, you know, and that’s where technology helps, because it can manage that follow up better.
Oscar Jofre 27:02
Yeah, no, agreed in, but but it is good to hear that. I mean, I would thank you for adding it on. And what I was really gearing towards is that I don’t want to discourage any entrepreneur. And and I think it’s the same, the same, we’re all saying that we’re recording, we’re just getting started, I think that’s a great way to say we were just getting started all the other years were like we were in training wheels, testing it out, and we’re seeing what works and what doesn’t work. And, and it’s not so much that the one up one person idea can make it it’s just the amount of work, you know, the external resources you can you’re going to need from the when the offering it’s like, but even getting, getting to the filing stage, you’re gonna need to have all the skills that you’re the one person, right, you’re the CEO, the CFO, the CEO, you’re the CEO, everything. And if it’s too, makes it a little bit balanced. So I’m putting that prefers, because we’re starting to find companies that are asking, okay, so listen, I got a great company, I don’t have a CFO, is this going to be a problem for me? Right. So let me ask you that I mean, a ton. I mean, I don’t have one, I know I can get an accountant to do my books. But do I need a CFO to do that? And then I’m gonna come back to you, Douglas. Because the other question is, do I need a board of directors See, and you know, they play a role in reg D offerings. But here on Reg A, we haven’t talked about them yet. So first, I’ll go with you. It’s,
Etan Butler 28:27
it’s helpful. I don’t know if it’s necessary, you know, get used to Reporting to Your investor base. And that might be a new thing for an entrepreneur. This isn’t just a text on a Friday afternoon, that, you know, announcing that you made a couple sales, there’s an ongoing reporting requirement every six months. So, you know, the financial component, and the transparency is, you know, oftentimes could be a lift in what the entrepreneur or the small team is accustomed to. So, you know, so I would say that having someone that is, is dedicated to the, to the financials, who’s on top of the accounting, and the reporting is important. It’s it’s not required to have a CFO, but it’s certainly a smart thing to have, as you’re growing, you know, that, you know, if you’re, if you’re doing a Reg A, it means that you’re looking to raise over over $5 million. Right? So you’re coming from 510 20 50 million our companies are raising, it’s another league. Great. So you’re, it’s representative of that next stage in growth. And so having that corporate structure developed and in place, it’s a good time to kind of, you know, widen the team a bit that could you know, it could diversify some of the ongoing responsibilities but but with the right but it’s not not not required, right. It’s not that it’s not required it you could you could have a a third party accountant or bookkeeper, that’s helpful that could fulfill this purpose totally fine. But it does it is another level of organization and obligation that you need to pay for For.
Oscar Jofre 30:01
And that’s, and that’s a good point. I mean, the key reason why you’re doing brigades, you need working capital to grow your business and as you’re growing and your financial reporting requirements, and, and so forth. So you may not have in when you start, but if it’s part of the plan, because you need to be ready for all this. There’s the pre stage while you’re raising your capital, and you touched on it, what happens afterwards is the other but the other one is the board of directors. So this is one that we don’t talk a lot about. It’s not been highlighted yet in the industry? And is is that going in? At the moment? It’s not an issue. I’ve seen a lot of companies with one board member, right. And typical private companies, it’s very small. So where are you seeing that dug yourself in with the funds you’re dealing with?
Douglas Ruark 30:51
Obviously, it depends on the company and their and their growth. I mean, we see the same thing, we may see that, you know, there’s, there’s three managers, executive managers, and they happen to be the three board members as well. I think it’s beneficial that if you can build out a board that is talented, and, and is there to help the company grow and achieve its objectives, I think, I think it’s beneficial to put the time and effort into build that type of board, but a lot of it comes down to the client and where they’re positioned, you know, driving back to what we were just talking about, you know, what, what, what a company might want to look at is that maybe they’re not positioned for Reg A plus, at the time, yeah, I mean, maybe maybe they should, if they’re, if they feel like they’re going to be bootstrapping this operation, maybe what they should do is do a 506 C, for example, something a little more simplistic, raise some capital, build out their infrastructure a little bit more position themselves better for the Reg A plus, and then, you know, maybe a year later do the Reg A plus. Because, look, Reg A plus is a fantastic program, it’s a great vehicle, it fits into a lot of situations and industries and deal types. But I think two part of this conversation should be also is that is a company well positioned for it, because forward growth may dictate the need for a vehicle like a Reg A plus, but what might position them better is, you know, doing something that’s a little more simplistic, like a 506, C, raise a couple million dollars in capital, build your board, build your operations a little bit more, and then position yourself for the a plus. Because, you know, as a time mentioned earlier, just having the Reg A in place, is no guarantee that you’re gonna have subscriptions coming in. And I think that was a really good point he made earlier, which is, you really do have to focus on the investor acquisition side. And so and so positioning matters. And what might be a better fit then is if it is a one or two person operation, that maybe they do a more simplistic offering to build their capital base to move the company forward to then, you know, 1218 months later, now they’re better positioned to do that Reg A plus, and really benefit from it because they’ve positioned the company better for it.
Oscar Jofre 33:09
Okay, that’s a great point. So let’s look now let’s move into so obviously, the topic is how do I prepare so we know what the requirements are, we know how big your team so based on the type of team you are, you’re going to need to select your partners quite carefully. And and now more than ever, I I firmly believe that we are in the evolution that we need to be putting all the pieces together like a nice puzzle. These are all puzzle pieces together people this is all part of the puzzle. So it’s there it will work on have a different opinion. I feel that what happens here, what happens there, Khalid moves around, right until the end, it needs to be different. And so what advice Are you giving clients now today regarding, you know, when it comes to bringing in those exhilarate, from the lawyer to the auditor, the transfer agent to their technology, escrow credit card and all that, because it I call it a team sport, right? When you’re in meetings, sometimes it’s like 22 people on a call. And, and there’s one CEO and let’s go or maybe, and the everybody’s working for their goal, but all of us are in sync, right? I mean, right behind the you. And I’ve seen that a few times. So I mean, I’ll start with you, because you’ve seen this right from the start. Right? You were right there. The beginning, you’ve done more deals than anybody else in the Reg A at this point. So the evolution is already here, where we there’s enough data now to back it. And I think it’s important now that people understand that the checklist is not just picking a lawyer, it’s just how does it fit in with all of this?
Etan Butler 34:49
Yeah, there used to not be a whole lot of choices. And and the few providers got pretty comfortable and they got pretty relaxed on Customer Service, they got pretty comfortable on nickel and diamond. And now there’s other players that have stepped up, which is which is very healthy for the for the market, and people have more choices, right? You know, we get contacted from, in from clients that come to us from a number and a number of different ways. One is from folks that have done the research, they go to the SE C’s website, they take a look at all the one A’s, they look at the deals that they want to model their own offerings after or that inspired them. And everything’s there, who’s the attorney how much they paid for the attorney? Who’s their broker? dealer? What are the terms of the agreement, who’s the technology, everything is there, it’s transparent. That’s the beauty here, right? It’s all available. And you know, all you have to do is Google sec, one dash a and go look at all the SEC filings, right, you’ll see us come up, you’ll see others come up. And that’s that’s a, that’s a, that’s an interesting thing that we encourage people to do just to have as much visibility as to how other people are structuring their offerings, it’s available, we get contacted, sometimes from companies that have already selected their platform, and have already selected their law firm and their transfer agent, and they just, they just need the broker dealer piece, right? And we get contacts from companies that say, hey, you’re the BD and all these offerings, put it together, give me the Dream Team, what does that mean? And so it really depends, right? And, and, and what you know, what I will tell you is that it’s evolving, it’s the efficiencies are evolving, a more cost effective and seamless process has, has has has continued to evolve and develop. So what we try to do is understand, you know, what other players have already been selected as part of the issuers team. And then we look to supplement that versus other times when we get contacted to to kind of put together everything we’re you know, which is more and more frequently, we kind of we kind of shift steered in that direction. But I do agree with you Oscar that, you know, there’s a benefit in and understand now that we’ve gone through offering after offering there’s a benefit of it right from the from the get go structuring everything properly, and bringing all the right people in from the beginning. Just that that just assures more of a more of a more of a an easier flow throughout the process.
Oscar Jofre 37:14
Well, it’s not only you the flow, but you’re right. It’s also something that we didn’t know, then we now know, is that if you don’t plan for that, there’s additional costs that the issuer or the broker dealer or other parties need to pay is because it’s the things you don’t see. And so when you start bringing, so I said it’s a team sport, you have Douglas, you have return the broker dealer, the broker dealer does compliance, he has a Chief Compliance Officer, great. There’s a transfer agent, that’s another entity, there’s an escrow provider, that’s another entity, there is a credit card a CH, there’s money movement, okay? And then of course, let’s not forget the shareholder, look at this individual, right? This individual went to the company’s website, ABC Inc, and I’m ready to invest, I Everything is there, and all sudden, they’re being moved around like a, you know, in a chess game, right? One in blind, but being moved from here to here, how come I provided my information here, it’s not correct over there, and so on. So but we didn’t know that then. So this is not about criticism. It’s about evolution in when you need to evolve an industry. That’s a good thing. David Weil, who is considered the father of their jobs, that guy, one of the advisors in our company, so full disclosure, him and I we speak regularly keep goes Reg A right now is in a momentum in a very positive momentum. The key for it getting better and better is that the industry needs to evolve with it. So just like COVID-19, it forced people to either embrace it or get up, you know, I’m done. This is no different. we’re evolving. So you need to strategically put, you need to ask questions you never asked before. So what exactly happens to my information? When I use you? How do I get it from here to here? And then how does my shareholder Get it? And what are they see? What can they do? Why? Because there’s another piece to this puzzle we never spoke about before. And that secondary market trading. See, it now matters what starts right here at the beginning. It matters now more than ever, because the beginning, john goes, I really do want to offer my shareholders upon my closing my Reg A to trade, fantastic. If you didn’t put all the right pieces here, that goal is going to be twice as costly for you to get there. Just because the you know, the broker dealer wasn’t the broker dealer you should have had because they didn’t do you didn’t have the right transfer agent you didn’t do so. It’s a trickle down effect. So if it was just one provider, it’s never gonna be that way you broker dealers or broker dealers, Douglas Douglas, lawyers and lawyers, auditors or auditors. But it doesn’t mean we can all work together for you. So on that side, so, I mean, Douglas, you’ve been on the quarterback side, and we’ve been very grateful working with you. And when I, when I first approached you, I was excited because I, I we are not a quarterback company, we we certainly like to help entrepreneurs, I know a ton does we spend lots of hours speaking to them, the reason why we’re doing these webinars, but in reality, they, they, we will send them to companies like yourself, you know, go to Douglas, get yourself nicely set up. But it the education starts with you now, making sure that they understand all these different pieces, and to make sure that they’re getting these pieces at a timely fashion. Because if they don’t get that broker dealer as it done, set it at the time of filing, Boy, that’s going to delay their offering, again, because they have to resubmit it. Right? So how are you doing that selection today.
Douglas Ruark 40:56
So I you know, one of the things that I like to push is, first of all, you know, don’t come into this process, you know, bootstrapping it, I mean, you really should have a solid budget for coming through the process. And, again, I’ll reiterate, if you feel like you’ve got to stretch financially to do this, then maybe you should do a more simplistic offering and raise some money and better capitalize yourself. Because there are benefits to using. Look, there’s benefits to putting together the right team, the certainly there’s companies that execute Reg A pluses, and don’t have broker dealers affiliated with the offering, it’s not really what I would necessarily recommend, although maybe there’s times where it is a fit, again, maybe they’ve got a handful of states are selling in, and they’ve got a deep social media asset base, and they just think that, you know, they’ll, they’ll be able to sell it directly. But obviously, there’s a lot of benefits to having a broker dealer on board. So I think, first of all, a big part of this is putting in place that proper team is going to make for hopefully a more successful offering, obviously, but it’s going to make the experience for the investor better. And again, that’s why I’m a big fan. And it’s why we’ve been the core focus of our firm is find ways to use technology to manage these processes better. And we’re big on controlling processes internally, I mean, for example, we file directly we’ve got all the Edgar conversion software in house, we don’t use third party filer agents, we file directly because we want control over that process. So I think it when when when people are coming through and they’re evaluating doing a Reg A plus number one, you know, Come in Come in properly capitalized for it. Number two, work with best of class and work with companies that have embraced technology in executing these offerings. Because these offerings and the way they’re getting promoted, it’s it’s different. This isn’t 2002. And so I think, you know, that’s, that’s what people want to look at is, you know, work with the class leading companies that are out there, and especially companies that are using technology, because it will matter. And again, it drives back to what Aidan said, you know, you want to make it as easy as possible for people to come through the investment process, invest in be a shareholder, and then obviously, you want to make sure that you’re managing them as a shareholder, properly and efficiently. So, so I think that’s the thing is when we’re working with clients, and and and they’re asking for advice on, you know, how do we put together this team? I mean, look, I can make all kinds of recommendations on investor acquisition companies, on broker dealers on transfer agents, if it’s my mean, what I typically push, what I’d like to see the client do is use best of class use people that are specialists in doing Reg A plus, and use people that have embraced technology, because it’s gonna matter in the long run.
Oscar Jofre 43:56
Yes, I think now, because of the evolution, the fact that we are evolving, and we’re getting more 75 million is going to bring a different asset class of investor, a story or investor and issuer, and therefore the demand by them on us is going to be I need to know all of it. We’ve never had that before. People were just like, okay, Douglas, I got you. Great. I got dalmore. They’re great. Okay, excellent. And I got that investment. Okay, great. And that was it. That was, as far as I remember the early discussions, I got everything. And now we’re, we’re making sure we’re going through a checklist with him. I said, do you have this? I said, great to hear you have the embed? Have they told you how we’re going to get the data? What do you mean? Well, I need to know how we’re going to get the data. Because if I don’t get the data, I’m going to tell you the problem we’re going to run into and there so people don’t think beyond one part. So the good thing is we’ve now gone to the stage, because we’re asking all the right questions at the front end and today’s you know, discussion was how do I Prepare. So preparation is, is sort of like, you’ve got to see the full race, you got to see it all you’ve got to see it, you’ve got to visualize it, you’ve got to be able to see the end to end. And very soon in less than a week’s time, we’re gonna have a page for you. So you can go through what an end to end really looks like, from the minute that you select your partners like Dell Moore, and Douglas to you know, your transfer agent to your investor acquisition, your auditor, what happens next? And not only what happens next, what is actually taking place? See, you know, saying, Oh, I just put an invest button on my website. I’m ready to go. Okay, great. What happens next? You know, what happens to the investor? What do they go? What do you mean, what do they go? How do they get notified? It don’t mention it, you know, they they skip up the process on step three or step two? How do you get them to come back? How do you get them and make them into an investor? Or do you just wash it away and say, it’s done? Well, maybe hold on, maybe you should rethink this because their secondary market trading, maybe today, they don’t want to buy, but maybe as you progress, they will. So understanding all these things are going to be critical. Again, they weren’t there before. They are there now. So it’s fantastic. So this is the time where we ask you, the attendees, all you need to do is click the raise hand. Otherwise, I’ll keep talking with my colleagues. If you don’t, if you have questions, I’ll let you come in and ask a question away from ICANN or Douglas. Obviously, this is the it’s a lot to absorb. But it’s you know, taken notes, where it starts talking to the professionals, a town said it best. This is all public information. There’s, there’s no I don’t know if you’ve had this one done. But I got to tell you, I can’t disclose the company name but it it caught me off guard. And that is they go well, I love Reg A. What I would like is it possible that when they click the invest button, they we only show them certain things? And I go Excuse me? I I’m sorry. You are talking about a you know, a Reg A? Yes, a Reg A? Great. Okay. But what do you want to keep pumping? Well, we want them to sign an NDA to see the rest of the information. And then my question to them with Did you know that your form one a was actually filed with Ed guard? And the goal? What is that? Yeah. Oh, okay. Ed Gar is a public service feature that you can go to, and you can just type in a company name, and you’ll get all the documentation. So today, I can go there and get I mean, have you run into that? It’s on yourself?
No, not a lot of other things. But I haven’t been asked, haven’t been asked that yet. If an NDA has to pop up first.
Oscar Jofre 47:59
Yeah, not yet. Okay. I ran into it, it was a real estate deal. And it just caught them way off guard. And I was sort of like, you do know that once it’s filed? Everybody can see it? And I go, No, No, that can’t be well, that is for money. So what I was trying to get at is not so much about them is as the town said, when you look at a form on a it’s all there, how the structure and who the broker dealer is who the auditor, the lawyer, all the service and how much they’re getting paid. You gotta love that transparency into getting things done, you’re not going in the dark, the only darkness that was there, maybe you don’t know how to use that guard, and that’s fine. But if you’ve got a course somewhat better, yo, all the player, everybody we list has done right, guys. So to the point of what the time was indicating that you need people who have done it before, it is important that you work with those who have been there, because your cost is going to be a critical element to all of this, right? It will escalate if you have somebody who files for money. And now the SEC comes back to you with questions because that’s where the this is the key of creating a proper fan one is getting it there once maybe one or two questions. But if it’s ongoing, nothing can take nine months a year. I’ve seen the deal go two and a half years. The minute you switch a lawyer to it that’s been there, they go up, I see the problem.
Douglas Ruark 49:32
That’s that’s a great point, Oscar. I mean, I think too, it’s funny because I always tell people, you can undermine this process by trying to rush through it. Because, again, you’re submitting this to the SEC, their securities attorneys, they’re reviewing it, they’ve seen 1000s of these and if you rush through this, if your disclosures aren’t correct, you know, if things aren’t formatted properly, you’re just going to kick back comments. And so the time you thought you save by rushing this file through or rushing the process, you’re just going to undermine yourself, because you’re probably going to come back with more comments that you have to deal with from the SEC. And, you know, I think a big part of this too comes down to education. I mean, you know, if I’m dealing with a software company, and they know how to build applications, they know nothing about sec rules and regulations. And let’s be honest, these are complex processes and complex regulations. And so I think education is big too, which is getting information out there, you know, one of the ones we run into a lot is I have a lot of people to call into our firm, and they’re interested in a tier one, they’re interested in a tier one, because they’re looking to avoid doing an audit. And, you know, there’s a couple things that they miss there, which is number one, you’re gonna have to qualify that offering that at the state level, and a lot of the states under their own state laws and regulations are going to require an audit anyways. And then the cost to pay a firm like ours to qualify you at the state level, you’ll quickly reach the point where you could have just paid for the audit, and then you could have gone tier two and had all 50 states to sell into. So a lot of times, there is an unwinding of bad info that the clients gotten, or the potential clients gotten in a lot of it is just education, which is educate them on the process. And and get them to understand what they’re getting ready to get into. And obviously, you know, we’re not here to intimidate them. But we do want them to understand that. Again, this isn’t a simplistic private placement, reg D that you’re doing. I mean, this is something that is going to involve a lot more players, there’s more regulations involved. Ultimately, like I said, when you reach the finish line, you’ve got a great vehicle to go raise money with. But I think that’s a big part of it is just the education side, because your typical person evaluating a Reg A plus, they’re not a security specialist, you know, they run a software company, or they have a, you know, beverage company or what have you. And so that’s a big part of it is getting them to understand the process, what’s going to be involved. And obviously, all of these other moving pieces, and all of these other companies that are going to be involved to make that offering a success.
Oscar Jofre 52:10
I’m going to bring one question to you with Tanya, if you haven’t run into it, it’s okay. But I, I’ve I’ve now had five or six clients and And to your point, you said a lot of the investor acquisitions would rather not take on a client, because we’re almost creating best practices Baby, I don’t want to bring that up right here. But have you run into this scenario where the issuer knows how to use add Gar pulls down the document said, Oh, yeah, I modified it, here’s mine.
I occasionally, and occasionally, you run into someone that wants to build their own system, right, and wants to put all together themselves, and then you’re like, Okay, this is going to be pretty taxing on everyone involved. And, and so let me share you share some war stories with you to discourage you from doing that, or folks who are dead, like you were saying that are considering, you know, tier one, I mean, if you could see all of your potential investors down the street, then maybe consider tier one from my own perspective. But But you know, even if you’re even if you’re looking to raise under under 20, I mean, my personal opinion is tier two is the way to go for a lot of reasons. But yes, you have folks that ask all types of questions. And, and look, we, we’ve we’ve seen it, and we’ve seen how challenging things could be if you if you kind of try to chart your own course here, stick with what works. Surround yourself with people that have gone through this many, many times, that could be helpful. You know, you don’t see everything, if you’re going through this for the first time, right, in your research in Google, you’re going to come across a lot. But, you know, I you know, again, I think it’s very valuable with with all of the service providers that you use, really to leverage the experience they have this is still a relatively new industry, Reg A only really became a thing in like, 2018 or so it’s hard, it’s hard really picking up and popular, and Oscar to your point, now we’re seeing a year two years after when, when when, you know, you as a transfer agent, which was like, the last step is like okay, now I’m seeing, you know, these these issues that could have been well better thought out at the beginning, there was no real way to know that and, you know, going into this, right, and now there are and and, and we’re gonna keep seeing that more and more, it’s going to evolve more and more and, and and KoreConX, had does a really good job, you know, creating a center of gravity, in my opinion with with in the crowdfunding community, especially with Reg A as a resource for folks that have you know, video after video of folks that are actually out there doing these deals and going through these issues that you can really you know, there’s it’s a really it’s a great resource to to use, and I strongly encourage anyone who’s considering a Reg A to really spend some time taking advantage of it. There’s a lot of good research that’s available today. That wasn’t available a year and a half ago. Right.
Oscar Jofre 54:48
Agree, it wasn’t it wasn’t there. And I want to touch on a really good point for our closing today because I think we’re going to see this more of why because the industry is maturing and people are Same, I really don’t like that. So I’ve run into a couple companies where the the CEO said, you know, to his dev team build me a better mousetrap, right? And Douglas, you touched on it just because you can build a better mousetrap. Because you want to make it look better, doesn’t necessarily mean you actually understood why that much work was built the way it was, you know, the the steps step by step and why you’re collecting certain things. So I, I, I’m all for people trying to do things on their own. I really, am I the jobs out again, what was it democratizes Capital make allowing 233 million Americans to invest, giving the ownership back down to the winners, making it simple as possible to be able to take advantage of these regulations. So that’s all there. And of course, people are going to try to build things on their own legals, I wouldn’t play with that. I, you know, that’s a cost, you don’t want to overdo. And I’ve seen, I’ve had situations where people say I can, um, as a good paralegals, anybody else. And I know, I know, I read it, I’ve done these 1000 times, I go great. But these are the experts, they have experienced, they’ve been, you know, one of them, it’s got the golden touch of everything that goes in comes back. qualified. So on the technology side, um, you know, we are seeing a mix of everything. And we’re playing audit. So we’re being brought in to do audit for companies. What do you think of my investment process? Well, okay, it’s got all the basics. But as we go through the compliance audit of it, that’s where it collapses. Why, because the developers, you can’t blame the devs. They just didn’t understand it. So I think it’s really important. And none of it is proprietor, I want to be very clear on something. If you go to any website, that dalmore is a broker dealer, you can click the invest button, you can take the screenshots and go, Okay, I get this in, or you can go to anywhere. And you’ll see and you go, this is simple, you may not understand why it’s collecting it this way, this is an important. And you may think all from a consumer perspective, we can make it smoother and smoother. You have to be real, you have to understand why these things are happening. Because they were given a gift, gift allowing investors to invest online, it’s not something we want to lose that privilege of. And I need everyone here to understand that this is a team sport. And I want to bring one point clear here that if we try to mimic or create problems here, we’re going to lose one of the most valuable components of Reg A, and that is the money. What do I mean by that? The money, the credit card providers, the a CH providers, the escrow Why is that so important? Because they are fully regulated? No matter what, there is no shortcut for them? None. So we don’t pay attention to how this is all done in protecting them. And they cut us off. How on earth? Is anybody ever going to raise $75 million at $100? A shot online? Not gonna happen? kryptos not there yet. It’s getting close. But it’s not there. It’s not on the everyday occurrence. So we really need to make sure we understand what we didn’t know them. We didn’t know this before we we just thought of it. Like I call it like a privilege. Sorry. It’s my right. You know, it’s my right credit card. And ECA, I call it a privilege. I don’t know what you’re telling clients who don’t, but I’m very clear with every issuer. Listen, it’s a privilege. So
Etan Butler 58:38
yeah, we’ve seen platforms, unfortunately, they got shut down overnight from being able to accept credit cards. And that’s, that’s a very difficult position for an issuer to find themselves in when they’re spending all their money on advertising and promotion. And what we’re seeing is, you know, 70 80% of investors are using credit cards if you make them available. And so there’s a lot that you want to stick with, with with with veterans in the space, in my opinion, you want to realize that there’s a lot you that you don’t know, going into this and to consider, but I agree with you that there’s a there’s a responsibility, that that everyone has here to maintain the appropriate integrity as representatives and ambassadors of the of this industry, right. And that and that and that applies to the issuers too. You have to you have to realize that these are real investors, they’re putting real money into your To Do you have to treat them properly, you have to be organized, you have to report to them. You have to give them a fair valuation, you have to treat them like you would any other investors. This isn’t a Quick Set it up online, raise money with whatever you want and goodbye. It’s it’s the beginning of a relationship. It’s not the end of a relationship. It’s a and and it’s a new way of doing this and it’s closely monitored by the SEC and the regulatory bodies. And our actions today are going to be looked at tomorrow, right and there’s no shortcuts in the regulated world. Everything is on the Bright lights are on, right. And so you just have yet you have to be you have to think about next year with the decisions you make right now. Right. And so that’s great.
Oscar Jofre 1:00:07
I, I’m full on with you. And in fact, I’m excited that the industry, this ecosystem that all of us have created, bringing us each other working together, and people go with their competitor, now we’re working together, realistically, we all work together. And that’s where creating best practices, and we’re sharing those with you, because we want you to be successful. We know that there’s another side that people talk about, you don’t need a lawyer, you don’t need a broker dealer, you can do it yourself. And I’ve met those companies. There’s one company I’ve met, that they’ve been approved for over three years, they’ve raised only less than $75,000 a year, they want to do it all themselves. So that is a route there is that that is the part that people need to understand that nothing is going to stop you from doing that. But we’re going to be educating the investor base on what the best practices are, why it’s important to have a broker dealer, why it’s not just because they do compliance is because they do more than just that they’re helping the company, make sure that the issuance of the offering is fully compliant. Exactly everything that’s been seen, and the ads in the, you know, the webinars are being reviewed by the broker dealers compliance team to ensure that the company is doing a compliant this, as it turns out, the SEC is looking in an SEC now has a division, specifically looking at Reg A. So that’s good news for all of us here, but what do you mean, it’s good news? Right? Yeah, I think it’s great news. It just goes to show you that we’ve now made a difference in the market. So let’s, let’s do some closing remarks for everyone this afternoon. Um, just, you know, high level the the points on, you know, making sure you’re prepared, but I think we got it. But I’ll start with you return. And then I’ll close it off with you, Douglas.
Etan Butler 1:02:00
I think the points are, pick a team that has significant experience that’s done a number of these transactions that’s worked together with other service providers, that could help put you in front of the most cost effective, efficient and experienced value added team. That’s critical. Recognize that step one is finding the right you know, securities attorney, which is a dog as certainly a great a great choice there. He has a lot of experience. What I love about Doug, is that whenever you Google Reg A, somehow you’re always on top. So kudos to you, brother for for taking that taking that position. And and think about what’s going to come later now, right? You have that ability now, because we’ve all gone through this process before. So think about where you want to be after the raise is done, who’s going to communicate with your shareholders? How to make that efficient? What does that even mean? What is secondary trading? How is it applicable to me? How much does it cost? Is it a value add? Is this something I should consider? Do I want to go public? Do I want to get listed on NASDAQ? How does that impact my choices today? investor acquisition? Do I just bring them in at the end when I’m qualified? Or do I recognize that their input is going to is going to affect how I structure my offering, who my demographic is? What is my investment minimum wage? How should I build my landing page? Right, so the more that you bring in day one, the more you could leverage all of their skill sets in the beginning that could help assure more successful or as
Oscar Jofre 1:03:33
Douglas Ruark 1:03:36
You know, I mean, as as as you know, running a company, like I said, we’re we’re kind of on the front lines of putting these in place, as far as the you know, the document drafting form, when a drafting the filing, and then really working with the client on drawing out what their goals are, you know, what kind of evaluation are they using? What type of terms on the securities are they going to be deploying? I would say this number one, I’ll draw back to what I had said before, which is plan ahead. It’s not a 60 or 90 day process. So you know, plan ahead, I mean, you know, build five or six months into this process, in terms of getting through the prep and the filing and getting a qualified. I mean, it just, a lot of times what we run into is as we start working through building these filings out, that the client runs into decisions or things that might change their business model. And, you know, there’s some time and effort there for them to then coordinate, coordinate, that part of their their model. I mean, it’s, in a way, it’s almost a cathartic process for these people because they know how to run their business. They know their business inside and out, but they never had to articulate it into a filing, you know, they’ve never had to articulate it to someone that’s actually got to create something that’s going to get scrutinized by the Securities and Exchange committee. And I would say, then, you know, if you’re going to go through this process, and if you’re going to make the time, effort and commitment and spend the money to do it, head out with the 80. And that is put in place the proper pieces. And don’t don’t shortcut things. Because ultimately, you’re probably going to undermine your offering head out without more security. So you know, use KoreConX put in place the team, because you’re going to go through a long process. And then you’re going to take the field, and you’re going to take the field with, you know, the missing pieces out of the puzzle if you try and shortcut things, or you try and take a, you know, a budget approach, for example, to this. So I guess that would be part of what I would say is just, you know, do things right, you get one shot at going to market, you get one shot at making a good impression on investors use technology to manage processes. And like I said, come into this process with some information. You know, if you’re planning on doing a Reg A, plus, start putting pen to paper, start putting down some information on how you operate. And then obviously start you know, coordinating all of the things that a firm like ours would need, you know, shareholder agreements, bylaws, financials, manager BIOS, because if you head into the process well prepared, it enables us to get you to the point of qualification more efficiently.
Oscar Jofre 1:06:31
Perfect. I think that was a great way to put in perspective. Our next webinar we have this afternoon at 330. This afternoon. It’s all about very specific items. What are the things you need specifically to put in the form one a, we always talk about is like this form, you put in your name and address. It gets filed, but we’re going to dig deep into it with the with the with the lawyers, but listen it on, Douglas, great talking to you both. I think we all share the same passion for Reg A for the audience that’s still here. Here’s the great news we 75 million goes live on the 15th of March 2021. That’s right, it goes live. This is great news for all of us. It’s going to enhance the the sector and it’s so important now more than ever, that the the the items that both our guests are brought up today that you pay attention to, we are producing the information for you. It’s on the website, of course summit.io you can get it there or you can reach out to john Douglas, you’ll get the same information, which is great. We’re all communicating with you. So I want to say thank you for being with us here at KoreSummit. It all of it is being recorded live on YouTube. And of course, of course I’m Thank you he can Douglas. Look forward to seeing you both again. Thank you. I thank you so much Oscar.