KoreTalkX #4: Tim Martinez
Jason Futko is co-founder and chief financial officer for KoreConX. Prior to KoreConX, Futko co-founded Crowdfunding Alliance of Canada. In addition he was managing director of an Exempt Market Dealer and Chairman of a public investment vehicle in the United Kingdom. Jason has vast experience in financing businesses globally. He has extensive knowledge of international know your client (KYC) and anti-money laundering (AML) regulations.
Jason Futko 00:39
All right, looks like we’re going live here. All set, I don’t know if we should wait too long to let other people have a chance to get on. Or if we should jump right to it. I’ll start anyways, we can start with a little bit of background, and then like give people a chance to get on and we can then jump into some of the discussion. I’ll start with, you know a little bit about my background. I’m Jason Futko. I’m co founder of KoreConX and manage some of the strategy and m&a activity with our firm. My background, in terms of experience has been sort of wide array of different things I started as a CPA, did that with Pricewaterhouse Coopers, moved out, did some consulting for a lot of banks, financial institutions, for a bunch of years, and then moved on from that into corporate finance and advisory services where I worked. Cross border, so I did a lot of transactions that were complicated and structuring transactions between Dubai, or the Middle East in general, the UK, Asia, and North America. So I spent many years doing that came back and connected with my co founder of KoreConX, which is Oscar, and decided there was a gap in the private markets that we wanted to fill. And that’s where KoreConX was born. So I won’t, I won’t get into the long, lengthy journey that I’ve had with KoreConX, because I’ve had several positions here. But it’s been exciting. And it’s been, you know, a lot of fun growing a business, especially during this time, when you’ve got all the tools that are starting to pop up. You’ve got the Jobs Act changes, you’ve got crowd funding available and, and a variety of other things that make operating in this environment a little bit more exciting. And of course, today, I’ve got Tim Martinez joining me, Tim is also have has a very interesting background, and I’ll let him give you a little bit of detail about that. He’s joining us to discuss the investor acquisition component of crowdfunding, so we’ll get a good perspective on that. But Tim, why don’t you give us a little little tidbit about yourself?
Tim Martinez 03:07
You got it, you got it. So I always say that I was the kid with the lemonade stand. And that’s my story. And I’m sticking to it. My background has just been very entrepreneurial. Strategy as a young man, I had a silkscreen machine in my garage, and I was selling T shirts to kids in my local high school. And then I was a DJ, and I was making mixtapes. And anything I could do to make a buck really is when I was young. That’s just, if I could mow a lawn and make $1 and try to turn it to two. That’s what I did. And that’s kind of really where my journey started. By the time I was, let’s see, maybe 20. For someone that territory, I’d already owned, maybe 10 different businesses. And I built an advertising agency I sold it, it would go it was actually acquired by one of our clients. I built a copy business, I sold that. I built a retail business, I’d sold that. I built an app, so I’d sold those. And then people started approaching me and say, How are you doing this at such a young age, which is very scrappy. I used to go to the Small Business Development Center and get some feedback on how to write a business plan, like what is the business plan, how to put a financial model together, I didn’t go to school for anything. I just kind of really one step after another kind of stumbled everything and learned how to do it. I also bootstrapped everything I could, whether it was credit cards, or friends and family, getting money from uncles and fathers and brothers, and just taking money in any way I could. And then trying to make good on the money that I got and making sure that I’m giving people their money back with a return and showing them my little business plans that I worked on at the Small Business Development Center. I’ve worked for the Senior Counsel, retired executives, I’m dating myself here, but this was all maybe late 90s, early 2000s When I was doing all of that work, and then I decided that I wanted to really try to pursue helping other people build their businesses, and I had some friends that wanted to have a clothing company or start a retail store. So I started helping them get their on bootstrapping and write their marketing plans and do their businesses. So one thing led to another. And I started connecting with other consulting firms that I’d find around the way I was always networking and working with different groups. And they’d say, Well, this is interesting what you’re doing, and you know how to write business plans can maybe come in here and help us or maybe to look at a pitch deck. So fast forward, almost 20 years now.
And I’ve worked all over the world, I’ve built 1000s of businesses, I’ve worked with entrepreneurs, and really just anything I can do to help someone build and grow and scale their business. So whether that’s me speaking at a conference, or writing a blog, or public speaking or doing these types of things, is really what I’ve dedicated my life to. It’s more purpose-driven and mission-driven. I always believed that if you can make an impact, and make a difference, the money will follow, the opportunities will follow. And that’s just all I’ve ever done. It’s just pursued business because I’m, I consider myself a business nerd. I’ll read any book I can get my hands on. I subscribe to all this newsletters, I’ll send myself to conferences, anything I can do, because I’m just a fan. I’m forever intellectually curious about what drives the business, what drives a business owner? What makes an entrepreneur successful. And after this, all these many years, you know, I’ve been able to work with very large publicly, privately held companies, CEOs from all over the place. I’m just like, wow, this is so cool. You know, there’s a fact that you can just sit there and hear their story and see the impetus of like, what got them started, whether they had, you know, a formal education or not, I find it all fascinating. So, though, eight years ago, my partner Jason approached me said we should do an advertising agency. I said, Sure, let’s go for it. Right. It’s kind of my background, let’s have at it. And shortly after we started this agency, about two years in the Jobs Act, had started and you know, this is the whole equity, crowd, phone marketing really just started opening. And a lot of funding portals started coming into play. And we decided that we’re going to try to market these offerings because there was really wasn’t anyone in the niche offering these types of services to these issues. And it was nice that we kind of fell into our love for entrepreneurship obecause of our love for business. Obviously, I had some experience raising capital throughout all my years and worked with investment banks and whatnot. And it was just a good fit. It was a good fit. We want to turn into to turn in the three and four, you know, we’ve worked on hundreds of deals now. And I think we’ve positioned ourselves very strongly in the equity crowdfunding space. And we have a lot of data, a lot of partnerships. And that’s what I’m really looking forward to speaking with you about today, and how we do what we do.
Jason Futko 07:37
Yeah, yeah. And it was great to hear that background I love the giving back component. And that’s, that’s what’s driven us a little bit at KoreConX as well, you know, putting together these KoreTalks and our KoreSummits and all our educational series is about. You know, bringing people up to speed, what’s going on in the marketplace, what’s happening with the Jobs Act and learning all the aspects of fundraising and managing your business efficiently and within the guidelines. Right. So yeah, it’s very important. So this topic, investor acquisition is obviously very important to a lot of people, especially when it moves into, okay, look, we’ve got a business, we’ve created a business plan, you know, we’ve got our direction, and what we want to do, what’s our next step, we need to get some investment, and this is a constant struggle for small business, as you’ve known from, you know, your history of, you know, helping people put together the business plans, putting together your own business plans, I’ve reviewed tons myself as well. So in that process, obviously, the hardest part for them is getting that investment in so that they can make their dreams come true. Right. Would you say that it’s difficult to acquire investors for some of these businesses, and what are just giving us some tips? What are common mistakes that companies make in the process of acquiring investors?
Tim Martinez 09:02
Yeah, that’s a good loaded question. Okay, so I would say like, if we’re talking about mistakes, just the first things first is you have to have a story, you got to have your story put together, which is why me why now, why this opportunity? I always follow the 10 20 30 rule, I think it was it was Guy Kawasaki, who put it together, Raj ventures guy, and he was saying, you know, 10 slides. So that’s all to use 10 slides. And I’ve seen people spend months putting together pitch decks and these get these elaborate at slide decks and they look like business plans. You’re like, why don’t you just write a business plan, and you never really, and the whole concept of forcing yourself to think in terms of 10 slides also forces you to think about three to four bullets per slide. And I would say if you can put one bullet per slide, you’re doing even better. And if you can explain it to your five-year-old and have them say back to you, you do anything better. So it’s the art of simplicity. Simplicity being the ultimate sophistication as a start up, right? Then you should have all the chops to go deep down the rabbit hole. If someone asks you further questions, we’re really just the beginning. So if you’re saying, Hey, I’m looking for a million dollars for this market opportunity, it’s growing by exponentially me and my team, and we have a lot of experience doing this. Here’s how your money is going to be applied the use of proceeds just basic talking points. Even to this day, I see founders kind of stumbling their way through that. Just a base. And you know, I love the whole, take someone to coffee and say, hey, just tell me about your business. Can we elevator pitch at the elevator pitch literally goes from 30 seconds to 10 minutes. On last on gone. So I would say like foundationally getting your story just nice and tight, cleanly knowing who you are, why you exist, why I should give you my attention and time in a real short spurt. That’s like step number one, the sound bites.
Jason Futko 10:54
Right? It’s easier said than grabbed the attention.
Tim Martinez 10:57
Yeah, exactly. Exactly. Grab the attention.
Jason Futko 11:01
And what? What types of investors are out there? And from the company’s perspective, you know, why would they invest in some of these businesses?
Tim Martinez 11:12
Sure. So we deal in the retail investor space. Now there are, let’s call it three types of investors. But we know there’s many, many different shades, but I’ll just simplify it for this talk, right? We have the retail investor. That is I’ll call him relatively unsophisticated. But I don’t mean that in a derogatory term, they’re just not a full time investor. They’re not a day trader, they’re not reading the trades, they’re not in the journals. These are people that will see an offering. And for whatever reason, the offering resonates with them. So let’s see an ad and the ad might say, invest in the future of flying shoes. And you think, well, I wear shoes, and it’d be pretty cool to fly in my shoes. Let me click on this app, and you click on it. And it says, For as little as $300, you become a shareholder in our flying shoe company. We think, really, I can own shares for $300. This is groundbreaking Yeah, of course. So they get in. And that might be the full complete level of due diligence that they do is just look at the landing page, watch the video, and maybe follow you on social media. And it’s a feel good investment. Right. And that’s something that you can talk to your friends about your mom, you go to Thanksgiving dinner, say, Hey, guys, I just invested in a flying Shoe Company, I’m now in investing, that would be level one. And that space is where a lot of marketing agencies like ourselves, and a lot of groups, that’s who everyone’s trying to build to is that initial person. The next person is your more sophisticated investor. In many cases, they are your high net worth individuals accredited investors, they actually have capital, they’re not unfamiliar with making these types of investments, they might have an advisor that’s helping them, right, they’re going to read whatever materials you actually have to present actually going to read it. They will ask you questions or wants to know more about who you are, and your background will check you out on LinkedIn, they might look into your industry, they may even be diversified in your industry. So maybe they have other holdings in your space, right? This isn’t new territory to them. And if it is relatively new, maybe it’s just the equity crowdfunding portion of it, that’s new. But they’ve probably made other types of investments in this territory, they could consider themselves angels, maybe to have a background like yours or mine, right? They’ve been in financial markets, they’re pretty familiar. They have friends, they might play golf on the weekends, and someone says that they’re into something, it’s that type of audience for more sophisticated. And then you get into your institutions, institutional guys or private equity, venture capital funds, family offices, banks, you go down that path. And these are people that do this for a living, it’s how they make money, this is what they’re looking for. So they’re looking for early stage opportunities as well. Everybody’s looking for the belle of the ball, if you will, and was looking for the golden trophy here once looking for that next big return that unicorn. So whether it’s you know, my cousin who may not know anything about investing, or your best friend who works as a fund manager, everyone still wants a good offering. We just made to be doing our levels of investing. So I would say like those like three really simple tiers. Now within that you have all kinds of shades, but those are the types of investors.
Jason Futko 14:23
Okay, and he made a really good point there with the flying shoes. It spoke to you as a potential customer of the business. So Reg A plus has sort of come up and helped help you turn your customers into investors. How is this profitable, and how is this good for companies?
Tim Martinez 14:49
Sure. So there’s terms out there that are floating around I don’t think anyone’s fully coined one or trademark one, but we’ll use investomer for now. This is the reinvest of our customer. Again, let’s go back to our shoe company. If we had a social media following of 100,000 followers, and these people had been following just the product, and they were just customers of the product that they’ve been waiting for the new release. That the next upgrade can take you to the moon, you’re just following because you’re a fan of the brand. But the second, I create an opportunity for you to actually invest into this business. You’re now a brand advocate and an investor. So you’re even deep, dive deeper into the brand into the product, you’d be even more willing to come back and buy from us because you know that this is benefiting you as well, every dollar you spend, you’re just spending into your company. I mean, we can feel this same sense of ownership in public markets; I own shares in Tesla. So if I drive a Tesla, well, I’m driving something that shares, but it’s publicly traded company; it’s a completely different experience. Because anybody can have access to that level of investing, this actually has kind of this. I’ll call it cool, for lack of a better word, it has this like, cooler, a little more underground, a little more like you kind of have to know someone or know the brand, you can really, really early so you have pride of ownership, that’s gonna be very different than if you and I bought some shares of ATT, I don’t really have a whole lot of pride of ownership, but only to at&t. But I could have pride of ownership of owning some new Reg A plus offering that, you know, for whatever reason resonated with me as an early-stage investor. And that brings me deeper into the brand. Like, for example, let’s say I don’t know, 30, 40 years ago, a young man named Ralph Lauren said, hey, I’ll offer shares of my company just to you know, private investors, and you can get it through this offering platform. Of course, that’s really cool. You know, there’s something unique about that, and that is what I think is revolutionizing a lot of what we see there.
Not that that concept, that notion of, I could have gotten early on Billabong, or some of these brands that I grew up with as a kid as a surfer was something that, you know, took years and years for these companies to go public, but I could have gotten in early. That’s cool. You know, it has that thing about it that it’s really hard to say about the investing space and a lot of stuff has just been so traditional over the mouth. So so long. So you know, AmeriTrade, is there anything that’s really cool and hip about Jeff Bond who’s buying some stock, maybe, but you got to be really into it. You know, this, this whole equity crowdfunding space, the Reg A plus the some of the brands that we’re seeing come into the space. And I would just brand, I mean, it could be a b2b offerings and technology that will take you to space. Interesting stuff. Yeah, to get in early on this stuff. I think it’s it’s ringing the bell a little differently than I think it has been for.
Jason Futko 17:44
Yeah, it could be the brand of tomorrow, right? You don’t know. I mean, that’s what creates the excitement. And that’s kind of what pushed, I think, regulators and people like David Wield, to sort of mentor and push to get those rules changed, because people wanted to get involved earlier in the Facebook. You know, whatever it was that they were excited about at the time, and just didn’t have the opportunity, they went in and met that accredited threshold. And so they weren’t able to invest, even if they were to see those offerings, because, you know, there’s 4% of the population is accredited, but I’m sure most of them never saw Facebook, prior to prior to being public, either. Right? So, you know, one is the opportunity and two is actually being able to see the deal when it when it’s around. So that push to get those deals in front of people I think was a big thrust behind it, and obviously create that liquidity in the marketplace for these companies to bolster investment and job creation. From the perspective, and sorry, I don’t want to harp on that too much. But that brand ambassador thing is something that we token push a lot as well. So you know, even if you look at most of our educational series, we believe it’s important to keep your investors engaged, even post the offering while you’ve closed the investment, and make sure you take care of them because they are customers. You know, they’re there to be a part of your business for the long term. So they believe in you enough to buy your business that definitely ambassadors your products. From the analysis side of your business, I don’t know how much you want to harp on this, but your firm analyzes a lot of data when it comes to these offerings. And, you know, you look at the audience and you target the market. Can you tell us a little bit about the type of information or how your firm sort of analyzes that market to sort of assess the best approach for some of these companies?
Tim Martinez 19:52
Sure. So we do a lot of our advertising on Facebook, but there are every platform under the sun that you can advertise. So let’s just get that straight. You can advertise on Twitter or LinkedIn or Facebook and on Instagram, on Snapchat, on TikTok, right? There’s really no limit to what you can do. We use Facebook for a variety of reasons Facebook owns Instagram, but we’re able to target through audience data, historic audience, that is, every time we run a campaign, our data gets better and stronger and stronger. When we work with a brand that has an email list, we can upload that email list and use that for further targeting. We can build a lookalike audience off of it, and we can build on behavioral and contextual, who did these investors follow? Where do these investors live? What sort of demographic information that profile, what audience is clicking on which ads, maybe people in the Northeast are clicking More on this ad and people in the southwestern clicking on these ads, we get a lot of like audiences data in that way. Also, the creative, what’s a better call to action with a better messaging with visual that information we use to optimize our campaigns. So initially, when we start a campaign, we generally start with about six to eight ads and let those run for a period of time. And then we start to optimize from there and optimize and optimize. And after a period of time, we have a pretty good idea on who the audiences that’s going to resonate most with, what’s the messaging, what’s the creative, and then we can go deep down that rabbit hole and just keep optimizing further. We always say test optimize scale. We have a podcast my partner Jason runs. It’s on the concept of testing, and optimizing it. And then once we know what’s working, and we’re able to make recommendations on let’s move our budget from X amount of dollars per day to maybe double down, triple down. And the only reason we would ever scale is that we’re getting investments, we actually see more clicks, more conversions, more investments. So that’s the game that we play. It’s an advertising game, primarily driven, that’s the top of the funnel. It’s bringing traffic to the page. And then once the traffic’s at the page, and it’s a matter of working them down the funnel, and you can talk about content and things that nature, but the data that we look at all audience data, who are these people where the phone with the data points, are they clicking on? Who do they follow? What do they read? What publications are they into? Right, we can track and target based upon as many filters as possible. So we’ve been doing it for quite some time, across hundreds of things. As I mentioned, we started as an ad agency. And we’ve been doing this for six years in this space, pushing up on seven now. So we have a lot of historical audience data that places our data as well.
Jason Futko 22:38
Right? And just to distinguish a little bit, what is the difference between marketing the offering versus just marketing the business in general?
Tim Martinez 22:48
Yeah, that’s a place where a lot of people get stuck. By the way, it’s an easy place to get stuck. So let’s talk about that for a little bit. Applying to your company, it’s very easy for someone to look at an app for flying shoes, and think this is a cool app. First flying shoes, let me click on it, in hopes that I can get to a place where I can buy the flying shoes. What happens a lot of times is that the ad could even be very clear, says invest in the future of flying shoes. But the audience might only see shoes. So they get to the page. And they’re like, what’s this, I just came here to buy shoes. I didn’t come here to make an investment or anything about this investment. Right? And then they’ll bounce off. So sometimes we have to think about the message, and maybe it’s not investing in the future of flying shoes. Maybe it’s in did you know, maybe it’s the Digi nomad? You know, did you know that 90% of people wish they could fly to work. Right? Would you invest in an opportunity where in the future mankind can fly to work versus flying shoes because in the visual and what’s in the ad and the messaging. So this is a lot of stuff that we have to test. Right? This one had seems really cool, and it gets all the clicks, but it doesn’t get the conversions. This one right here might speak more to the investor investment opportunity. And if you were to join any of the DNA team calls every day, you would know that we spend an ungodly amount of time talking about the investment opportunity; what is the real opportunity here to invest? Right? It’s not just so I can buy shoes; it’s that I can change the face of mankind to make travel easier by these bigger, holistic messages that we’re trying to get it out there because then we’re resonating at a different level. And then this is what picks up on the investors because once you can cross that chasm with a prospective investor, they go, oh, there’s what we call the aha moment. I get it. I didn’t get it until now. But oh my gosh, this is gonna be huge. I mean, there’s gonna be no more plastic. If I invest in this company, there’s no more plastic for the rest of mankind. Wow. Whereas before, you’re just thinking you were investing in some new metal company. Invest in new metals? No, that’s not the point; you’re investing in a plastic-free world. Right? So it’s, that’s our job as marketers is to take that message, and you can amplify and magnify it. And, you know, try to try to tell something that’s gonna get a better like in better conversion.
Jason Futko 25:20
Right? Right. Well, you also touched a little bit on some of the mediums that you use Facebook, Instagram, other other mediums that you guys generally use video, you know, TV, trade publications, conferences. What other forms of media out there or publications or sources would you tap into in terms of getting the message out on these things?
Tim Martinez 25:50
Yeah, so we break it down into advertising, content, and outreach; those are the three that we always break it down. And then everything generally falls into one of those three buckets. So with advertising, again, advertising is top of the funnel. It’s putting an ad out there getting someone to click on an ad and take some kind of action where they’re going to end up on your page. Now we can drive traffic from any source, right? It can be a podcast, it can be a display, it could be a Google ad be any channel. We use what we use because we know it’s so well. And we know we’ve tested a lot of other platforms. That’s why we’re a little bullish on the platforms that we like, because we know we’re getting better audiences that are flexible. But when it comes to advertising, you can literally test anything, as much money as you have to put advertising is as much advertising as you can apply. Right? You’re like a Superbowl ads, people are spending millions and millions of dollars just from this 30 second clip. So you can spend as much money as you want, right? That’s the top of the funnel, that’s advertising.
The second piece is content. So when it gets down to content, and this is content, you and I are creating content, right? We got some cameras, we have some laptops, we have a platform. So we’re like, there’s no limit to the amount of content that you can retrieve. And by the way, we recommend that founders take it upon themselves as well. So just pull out this device, right? Everyone has a phone and has a camera on it, and video, start creating content all day, every day, have everyone on your team have your advisors, I mean, really just pull together and create content, us as an advertising agency, you know. We have to have a systematic and very structured approach because we have a certain volume of clients. So we’re working on our content, calendars, it says, Okay, on these days, we’re doing these posts, we’re going to produce a webinar once a month. And we’re going to do, you know, weekly, quarterly updates, and we’re just doing best practice stuff that has to be done as an agency to keep the ball rolling forward. That’s social media, the blogs, articles, like I mentioned, webinars, production, press releases, writing, whatever we can do. That’s our job. But again, we can’t touch everything all the time, all day, every day. Right. So it’s a really, it takes a village to raise these capital raises that are not for the faint of heart. So we say, well, let us do what we do. Let us be the consistent, steady engine that can just stay up to date just pushing and pushing and pushing the founders, and the founding teams want you guys just be the paint job of the engine. You know, to go out there doing all this extra stuff, if you can, you know, start a Tik-Tok channel, go live on LinkedIn, go live on Facebook, go live on YouTube, test it all do everything. Nothing’s off-limits because we’re gonna have to retail investors, which means we can literally talk to anybody. We can talk to anybody, we just keep going out there and talking and promoting. And then, the final piece is what we call outreach.
The third part, this is where we’re you mentioned publishers, so reaching out Forbes and entrepreneur and, you know, coin telegraph or crypto weekly, or whatever it is that you’re into. Whatever your offering is real estate journal, reaching out to these publishers and saying, “Hey, we have an offering.” And we think this offering is relevant to your audience, your audience is into these types of things. What we’re doing is a perfect fit. How do we work together? How do we get some content? You know, there’s a lot of, there’s a lot of options out there. There’s a lot of publishers. There’s everything from your tier one, mainstream publishers, like Forbes, all the way down to your tier three publishers that are, you know, maybe someone runs a local blog on substack. But they might have 10,000 subscribers. They might have 1000 subscribers, but they’re really engaged. Or maybe it’s an influencer who has a YouTube channel. So social channels, reaching out to all these people all the time every day throughout your campaign is what will move the needle and make the difference? We’d like to start at the planning level, at the strategic planning level. So people ask me all the time, well, what if you were going to do a wrap next week? What would you do? And I would say the only thing I would do is plan out plan, plan, plan. So it’s not a surprise. I’m not like playing catch up. I’m not behind the people the entire time job. I’m very intentional about every move that I’m making is well thought out. Oh, well planned, I got my team and see, I have my message that we talked about, I got my elevator pitch, at my 10 Slide pitch deck, I have all the tools in my tool belt that I need. I have everybody aligned on the central mission, the vision, what are catchphrases, and what’s going to move the needle. I have all my creative assets, everything’s dialed in, so when I push, go I’m not wasting time.
Jason Futko 30:24
And that’s a good point. And for anybody listening, it is that much work. There is a lot involved in this component of your offering. You know, even when we’re talking to early-stage, companies looking to raise the capital and get moving, and they talk about costs, and they talk about, you know, Reg A, regulation crowdfunding, whatever it is, in terms of getting their offering moving. There’s been great efforts, some monumental in getting the cost of the offering, you know, down and, you know, making cookie cutter pieces of it where possible. You know, you can get legal services, sort of tailored for this at lower costs than than when it first got launched, you know, your audit costs can be sort of managed. You’ve got a bunch of costs related to this transaction, when you look at the totality of it, but this is where you’re going to want to spend a lot of attention. It’s in this component because, obviously getting the messaging right, getting the marketing on side, making sure it’s all cohesive. Getting your plan together, as you mentioned, testing different approaches. You know, that’s key, sometimes your approach doesn’t work at first, sometimes you got to retool, and you got to rethink, and you got to go back to the market, the slightly different message or in a different way and, and do that, to make sure that people understand that they get it. And in that process, obviously, you want to make sure that you spend as much attention to this. And that’s, that’s why, you know, a lot of your money in this in this offering goes towards investor acquisition, because it’s a key piece. And I think people understand that. But with that, there’s also another side to this, right. You mentioned earlier that, you know, you can approach sort of anybody in this in the space to invest. But there are limitations and restrictions on what can be said and what can’t be said, you know, there are laws and regulations like there are everywhere else. And you know, the SEC is very strict on regulations when it comes to soliciting investment. So can you give us just a broad, I don’t want you to get into obviously, details here. You know, we leave that to issuers and their lawyers and their their team themselves, but give us sort of a high level of things that they should watch out for in terms of sure promoting an offering.
Tim Martinez 33:07
Yeah, you know, we always say as a marketing agency, we try to keep our hands as crystal clear as we possibly can if you’re not a registered broker-dealer, we’re not financial advisors, you know. Always consult before you make an investment and all that kind of stuff. Also, it’s great to have partners like KoreConX, because we can rely on your experience and your background; your background is wildly different than mine. Even though we have a lot of similarities. It’s like when we’re working together as a team, I say, you know, I don’t know, I don’t I quite frankly, don’t have the answer to that call. Jason. You can talk to them, and we can talk to compliance officers, right. There’s, it’s we’re kind of all in it together right now. That’s what’s cool about this industry being so small is that I don’t really see a lot of, you know, head butting and competition. It’s like everyone’s pulling resources together, and advice and guidance and experience. So with that being said, I would say lean on your funding portal partners or compliance officers and all that now; what don’t we want to do? You know, the SEC, for, for everything that they do. Their intention is to keep any issuer from being a swindler and a charlatan and taking money from well-meaning individuals, and stealing the last pennies of a little old lady off the table. And that’s why a lot of these rules are in place just to protect the investors and we respect that. I look every now and then. There’s an ad that might go up with one word or one phrase and the word and rules change all the time. So we’re always trying to keep up with what you can and can’t say. I’ll give you an example of something that you should not say. Invest in flying shoe company today. We’re going to go public tomorrow. Right? I can’t guarantee I’ll go public. I can’t guarantee the timeline. I can’t guarantee, the other thing to add is you will become a millionaire. I can’t guarantee you can become a millionaire. I can’t guarantee you’re gonna become rich, and in these forward looking statements where we’re making claims in advance and the future, these are things that the SEC is they they don’t sign off on. Those are somewhat of the No, no. Now what we tend to talk about is the market opportunity. So we’d say there’s 8 million people on the planet; maybe 7.5 billion of them wear shoes. That’s our audience. It’s an evergreen market, people need shoes, right. And we would touch upon these market opportunities versus saying, we’re going to be a multi-billion dollar company next year. And if you’ve invested today, the share price is going to go from $1 a share to a million dollars a share, these are things that we can’t guarantee. These are the things that nobody has a crystal ball on. But if we were talking about the market opportunity, if I could talk about the experience. So I’d say hey, you know, I brought Jason on as the new CEO of our company, he’s worked for 30 years on Wall Street, he has all this experience raising capital, I can talk about that. I can talk about that all day, I can talk about any battery partners; they have the most sustainable practices, I can talk about my distribution partners, and we’re going to be inside of 5000 Costcos. The second we launch, these are things that I can mention, if they’re legitimate, they’re in stone, but I just don’t want to be misleading at all, in any respect at any level. And that’s the thing that’s sometimes, you know, it’s we’re talking about hundreds of campaigns, hundreds of ads, I mean, in a given year, we’re looking at 1000s of pieces of content, 1000s of pieces of content that go up. So we do our best job to read anything that comes out by the SEC; any new information is provided to us from one of our portal partners that say, don’t use this, or everyone starts to circle together and say, there’s a new ruling. You can’t say this, or you can’t mention that the deal closes in three days. Or you can’t mention timelines when this new information comes in, and we just do our best to incorporate it. We do our best, right? Because we don’t want to be misleading anybody, those are the things that we generally tend to look out for.
Jason Futko 36:56
Right? Right. And you’re right. There’s a lot of help in that space. You’re funding portal typically would help on the crowdfunding side, your broker-dealer on the Reg A side, if you’re using one, obviously, your legal counsels there to support you as well. There are due diligence reports out there that can be purchased as well, do you know, but if kicking the tires are certain things, you want to make sure that the charlatans aren’t there, as you said, so getting those reports and that due diligence piece out of the way is important. So that we can build trust in this in this ecosystem and make sure that people are confident when they go to the crowdfunding portal, or when they go to a Reg A plus platform and click invest, that some work has been done in the background. Somebody’s kicked the tires and made sure that, you know, Tim actually is the CEO of that company. And he’s legitimate, right, so those are the kinds of things that need to be done to keep the trust in that marketplace. And of course, you know, as you mentioned, you know, KoreConX is a piece of the puzzle, but you know, it’s like DNA, like every partner ecosystem is there for a purpose. And we we try to continue to build on that so that we’ve got trusted partners that you can call on to, to fulfill each need within the fundraising or even outside the fundraising. You know, the business continues after fundraising stunts. So you still have ongoing requirements and things you need to do. So it’s important to continue to continue to, you know, maintain that communication channel with your now shareholders, then investors, right, so, in terms of binocular terminology, they sort of switch over, but, you know, all of that is part of this process. And that’s why education is hugely important. You know, we brought up education. Early on, when we started this, you know, that we’re doing this for education purposes. It was the reason we started core summits and the core talks. What other education is involved? Do you guys get involved in anything else in terms of educating the market? What should investors in this marketplace expect? That’s a little bit different from what they normally would sort of see on the investment side?
Tim Martinez 39:34
Yeah, sure. So when it comes to all the compliance information, the laws, the regulations, I tend to look to companies like yours, sign up on the newsletter. Read the blog to watch videos just like this and to get my information so if there’s any issuer out there that’s considering a capital raise. I would say sign up for the next newsletter, and you’ll sign up for the summit, right? Just go down the rabbit hole and share much information. You can call somebody get on the phone, have them send you articles, and always do as much self education as you can. As far as DNA goes, what we try to do, and we have, I don’t know how many issuers, push prospective issuer calls a day, in the year, it’s, you know, protecting a lot, a lot of groups. We shoot everyone straight. We just try to shoot people as straight as possible. But we don’t have a crystal ball as marketing lucency. I wish we did. We know that no one can guarantee that any deal is going to get fully funded. So what we say is look at the statistics, just look at the stats of what’s currently happening in the industry. Look at the deals that started and hit 100% funding rates. Go to king’s crowd, kings crowd is a phenomenal source. For this information, you can see what new deals are listed, how long they’ve been active, how many investors they’ve brought on, and on the capital they’ve raised, you can deduct the information. So if you see that, you know, someone’s raised a million dollars from 1000 investors, you can just assume the average investment was about $1,000, just by doing some basic math. So I do that all the time is I’ll just sometimes hop on a portal, and I’ll look at any kind of random deal. And I’ll subtract how many investors versus how much was raised just to give me a benchmark of like, are we still seeing the averages that average order investment? I know we have our own data, but sometimes it’s good to look at deals that we didn’t do the marketing for. And I can see consistencies. So I would say that type of thing for education is in education that we’re doing ourselves, right. So we, as a marketing agency, are doing that type of information, then you as an issuer should be doing that same level of education, right? Go to King’s proud, look at as many deals as you can. And look at look at phenomenal deals. This is something we asked our team to do, when they get started, we say look at go look at the top performing deals in the industry over the last two years. Look at look at the landing pages, look at the video, watch the videos, sign up for the newsletter, read the portal updates, look at the creative photography, look at the graphic design, and read the messaging. And kind of hear the creative copy that they use, look at the industries that they’re in, you’re going to start to see some through lines, then go look at the worst-performing. This doesn’t mean they’re bad companies. They’re just poor-performing offerings, deals that have maybe raised $3,000. And they’ve been around for years, and the other group live for six months. Right? What you’ll start to see, the consistency is when you look at the course performing offerings, that the landing pages really weren’t there, the offering videos, it’s just something about him wasn’t hitting, maybe the founding team didn’t have the bench, right? The depth of experience wasn’t really there. Maybe the market opportunity was up. Right? So you’ll start to see some through lines of the best performing deals and the worst performing deals. And then you get to ask yourself like, okay, where do I sit in the spectrum? Right? I have to take a hard self-assessment and say, Is my stuff as good as XYZ company that raised $20,000,000.02 hours, or whatever it is, right? That’s the level of education we do. All the time, we’re constantly going out. So I would say speak with groups like ourselves, people with groups like yours, get intel, speak with your team, share that information. Get feedback, and then let all entrepreneurs have that come-to Jesus moment where you got to draw a line in the sand and say, okay, I have all the information. I’ve done all my analysis. I got to stick my neck out on the line, and we got to go over now. But you can’t do analysis verbally with analysis paralysis. Why do you get stuck doing that? You have to take the information and then say, Okay, I’m ready to drop the hammer. Let’s go for it.
Jason Futko 43:45
Yeah, yeah. And, you know, from our perspective, we see a lot of investors that come with questions, right, because we’re, we’re kind of in the middle of the process. So we get questions from investors who have invested, who are looking to invest through the process. One that I like to caution investors on is it’s not a it’s not there yet. It’s not a public market. Right? You’re not investing now and owning the share in 30 seconds, and it’s in your brokerage account, right? Like, there’s a time lag that you know, you invest in a private company, the money has to come over. It’s not instantaneous. In some cases, the broker has to do their KYC ID AML checks on the investors. So there’s a time lag between when they pull the report and when they get time to review the report, approve all the investors, and match it to the fund. So sit tight, there can be a little delay in that approval process and the closing process, right. They’re not going to close every time an investor comes in because closing is an initial process. So sometimes they’re waiting a week a month to do a closing. And then when that closing happens, you could get swept up in that as an investor, and then you’ll start seeing your stuff hit your account a little more. So just that sort of educational stuff is very important. And as Tim mentioned, there are sources, and please look for them. We do our best to try to fill that gap and put out information. That’s, that’s useful. I don’t want to belabor this. So I’m going to turn it back to Tim and just see if there’s anything that I’ve missed; anything important that mind?
Tim Martinez 45:38
Yes, fundamental pieces, we talk a lot about having the right framework, right, we can build the bones of your campaign with the right infrastructure, giving your campaign the best chance of success. So although we don’t have the crystal ball, we know what the framework needs to look like because we’ve done this enough times. Some of those things are, before you launch your campaign, making sure you have a really good strategy. You guys need support, call us. The other piece is making sure that you have your investors ready to go. So having enough investment when you launch your campaign is really important. A lot of people launch with $0 pre committed. And that’s an uphill battle if you will. So making sure that you know whether you have some lead investors, some friends and family, you just you know, you can kind of project a bit now whether you’re doing some test the waters to get you there, you need to make sure you’re priming the pump. The next thing is, you know, average investment amounts. So these are, this is a volume game, you’re going to need 1000s of investors to hit your goals, average investments amount to be, you know, from 1500 to 2500. Right, that’s just what it is. So if you’re trying to hit a $10 million goal, you might need to bring in five to 7000 investors to get to these numbers. So just being prepared to spend, being prepared to play the volume game. And these aren’t done in short stints. We’ve done long marathons. So if you’re looking to get in and get rich quick, this isn’t the place for you. But if you’re looking to build something where you’re trying to connect with your audience, then I think this is a phenomenal opportunity, and groups like ours, groups like KoreConX, this, this is where it’s done. This is the game, and this is the future. So we’re always here to have a conversation with anyone. So if anyone has any advice, any information, emails, you can call us get connected, you name it. But we’re here to empower entrepreneurs and really just play our part in this new industry.
Jason Futko 47:40
Great, well said. I appreciate you taking some time today, Tim, and giving our audience a bit of information education as always. And as you said, you know if you need help, please feel free to reach out to anybody in our in our ecosystem. Tim’s they’re on here. We’re all around to help and support. Thank you very much, and hope you learned so much. Thanks for having me, appreciate it.