Oscar Jofre  00:35

All right, everyone. Well, good morning. Good morning and happy 10th anniversary. Wow. You know, this week, the last couple of weeks, I’ve had to kind of remind myself over and over again that we are now celebrating 10 years of the Jobs Act. And it’s been an unbelievable ride. I know there are so many people that have participated in the Jobs Act and throughout my chitchat with none other than the Father the Jobs Act, David Weild the fourth. We will, you know, explore the job sec how we got here. Where are we going and just kind of have a discussion, what what do we have to look forward to in the next five to 10 years, considering look how much we’ve accomplished so far. So I hope you enjoy our our session today. Obviously, you may have some questions. David is very easy to reach out to. Did you know that he’s on LinkedIn? I? Yes, he is. So you can find him, where you can reach out to him and ask him any questions that we may not cover today. But before we get started, the 10th anniversary of the Jobs Act is not just one person. David reminded me this morning, it is a crowd. I don’t forget, but once from while we need to be reminded it is a crowd, a bunch of individuals, lots of them on two sides. And I just want to say thank you to look if I missed you, I do apologize. It’s not because, you know, I just need to keep all the names that have contributed, you know, people like Ruth hedges, Marty Tate, Douglas Elena, Chris Terrell, Kim Wales, Sam gusik, Sherwood Neiss, Jason best, Sara Hanks. I mean, I know there are so many others. These are names that have been the reason we are here today, who not only left it there at the hands of the SEC, or left it in the hands of the entrepreneur. They carried it on they carried the torch, they made it possible they they created companies in order to support the Jobs Act to be successful after 10 years. It’s still here, and it’s working. And so I just wanted to say thank you to all of you. And as I said before, if I missed your name, I do apologize. I know there were many, many, many of you that were there that day of the signing with Barack Obama. On April the fifth 2012. There were so many of you that wanted to participate in you did. So that was one side of the fence. So, David, I mean, you were on the other side?

David Weild  03:22

Well, I mean, wait, look, I mean, it is a team sport. I think that you know, to clarify, you know, what, what, what caused me to be, you know, dubbed the father of the Jobs Act, as I wrote a series of thought leadership papers that created the data sets that people then rallied behind and the exhibits, including the drop off and this the abrupt drop off of the small initial public offering that started with electronic markets, and then the decline in the number of publicly listed operating companies from 9000, down to 5000. Over the course of a very short period of time. And and and because the NASDAQ stock market, the New York Stock Exchange, were reporting listed companies, and commingling all of aggregating all the data along with the funds and the REITs. And the things that were not operating companies. Nobody had stood back and said, Let’s separate that data out and see how we’re doing relative to other countries. And so, you know, we saw that compared to China, which was growing like a weed the United States was in stark decline. And there’s nothing like that to get the juices of, of congressmen and women to start rallying behind something. So but on the on the, on the political side, look, I have an eternal debt of gratitude to Senator Ted Kaufman and his his chief of staff, Jeff Condon. And because Ted, who by the way, was the long standing Chief of Staff and turn for Senator Joe Biden, our current president took over his his seat and when President President Biden became vice president, he actually gave a speech on the floor of the US Senate. You know, and and and had his chief of staff Jeff Condon and take me up to the executive branch to see Tom Kalil, who was the head of the the number two in the US Office of Science and Technology Policy and a fellow named Doug ran, who was a senior at policy advisor for those of you that don’t remember to the to President Obama and and so if you go through it, meanwhile, in parallel, and Pat Toomey, Senator Toomey and who has a background in capital markets actually worked on Wall Street, and his his legislative aide Dena, they were all, you know, active on this, but most of this bill got written in the House of Representatives. And so if you go through guys that did some of the spadework Patrick McHenry, who Grant who was working on reg CF, ironically, Reg CF started with 5 million, and it got cut all the way back to a million when in the US Senate, and it’s been taken back up to its original size. So Congressman McHenry was obviously very important. Congressman Schweikert, David Schweikert, from Arizona, David was working on Regulation A plus for a considerable period of time. And I spent a lot of time with him. And so, you know, then you have to look at the leadership of the House Financial Services Committee. It was chaired by Jeb Hensarling, at the time, you know, jab, jab, his senior adviser, Ron wosner, as Jeff, you know, David weild. And, and Jeff said, Yes, He’s father of the Jobs Act. So I think that that’s probably where some of that got started. Maxine Waters, who is now the the chairman, she at the time, she was the ranking member. And, and she was at the top, she’s now the chairman of the House Financial Services Committee. But they worked in an incredibly bipartisan fashion, which is really a departure from what we’ve generally seen. But in something like this, because it actually increases economic activity. It’s good for poor people, good for rich people. And it adds to the US Treasury, there was a lot of consensus that we needed to do something and of course, people were, were really concerned. You know, and so those are some of the people that I’d like to shout out to. And, you know, it was a remarkably bipartisan effort. And it kind of restored to some degree, my faith in our democracy to actually be able to see people compromise horse trade, and come up with a couple of bills that have been so incredibly impactful. Right. I just want to say that, that, that if you look at the numbers and the financings that have been done, it’s it’s really, really making a difference. A lot of people ask the question, you know, why is it taking so long? Well, every, every director, the Division of Corporation Finance at the SEC, always marvels at the fact that they pass a bill and nothing happens. And it’s a lot of it is concerns about how the plaintiffs bar who’s going to be first, what do you do, but also we’re creating an entirely new ecosystem. Obviously, I asked her, you know, KoreConX, which I’m an advisor to, is, is is part of it is part of that ecosystem creation, right. But if you if you look at the SEC’s website, now there’s 80 separate crowdfunding portals that are being regulated that are actually active that are regulated by FINRA. And, and, you know, I was looking at the biotechnology industry organization’s data, and because of the crossover, sort of testing the waters provisions that we put in under under Title One, they attribute a tripling of the biotech Life Sciences IPO activity, immediately in 2012. So if you think about it, there’s like 18, 19 drugs that were that were actually approved in the first five years after, after the Jobs Act was passed into law. And, and if you look at the SEC zone report, in 90 in 2009, there was a 2020 report in 2019. Alone, there was over $60 billion worth of regulation 506 C generally solicited private placements done 60 billion with a B as in boy, okay. And you know, and you’ll look at things like, like reg CF, Reg CF didn’t ultimately go into law, right. There’s 80 portals, think about it there. It didn’t go into the SEC didn’t get finished with rulemaking until 2016, which is four years after the Jobs Act was implemented. So you couldn’t even start doing anything until 2016. So I’m saying that, that that this this this act is going to get bigger Reg A is going to grow. It’s been growing very steadily the last few years. I know where the end Innovation that you guys are doing, it’s gonna it’s going to accelerate the growth. I think we’re at the, at the, at the dawn of a, of a resurgence in us early stage entrepreneurship, I actually think it’s increased the startup rates in this country. You know, people build accelerators and incubators more and more, because they have more alternatives to access capital, through the Jobs Act. I mean, this is very beneficial. But it’s, we’re not at the moon, we got a lot more work to do, we got to fix the IPO market. So the paraphrase Senator kalkman, if we can get the $25 million IPOs to work again, not just on the offering, but in the aftermarket, whether we do them through regulation, a plus or through a form as one, okay, we’re gonna get America really back to where it needs to be, which is the envy of capital markets, IPO markets, across the globe, that will drive upward mobility, entrepreneurship, innovation, US technology leadership that will fund this strong military, which is, as we can see with what’s going on with the events in Russia, and the Ukraine right now is absolutely essential to preserve democracy to defend democracy.

Oscar Jofre  11:13

So needless to say, you’re excited about what’s happened so far.

David Weild  11:18

It’s I always, I always wish it would move quicker, right? But when I look at when I look at actually what’s happened, and and how many people were creating a new ecosystem for capital markets, okay. And what people don’t understand is when they when they went to all electronic markets back in 2000, and got, I’m trying to remember the dates, it was no 97, 98, it was the order handling rules, and REG ATS, which was alternative trading systems, and we collapsed, the telephone quoted trading spreads from a quarter point down to a penny, there was no money left in the business to support stocks that needed support. I mean, the irony of these all electronic markets that somehow they you know, I think that, that the people that were at the SEC basically didn’t understand that, that that large cap markets trade very differently from small cap markets, right. It’s, it’s what academics called symmetrical Wonderbook markets, you know, tons of buyers and sellers interacting with each each other. And so what we did with these electronic markets, is we made already liquid markets more liquid, not sure there’s a lot of value there. So for Intel, from Microsoft, for Exxon, Mobil. But we killed liquidity and aftermarket support for asymmetrical order book stocks, the micro cap stocks, big seller, no buyer, big buyer, no seller, and you need intermediaries making money getting into the middle of these things, to get them to actually support and trade well in the aftermarket for the most part, and they’re very easy to manipulate with naked short sellers and the market makers that masquerade, or we’re short sellers that Mark masquerade as as market makers that actually prey on these micro cap stocks and increase their cost of capital by driving them down. So we still have a lot of work to do. Oscar, I mean, we need to, we need to Venture Exchange a new model, a new construct that’s optimized for microcap companies that would work well on your platform. And we could talk a lot about that, but, but there’s a lot of work to be done. And we’re not, you know, we’re not finished yet. And I’ve got to get we gotta get back to writing, you know, thought leadership papers that can, you know, demonstrate to people, here’s the rulebook, here’s the things that you need to do. But we got very close, you know, with Congressman embers office, and in fact, there’s a big act that I wish they would dust off and resurrect, because it was heavily bipartisan. It was going through the 2018. Congress, it was called the jobs and investor confidence act of 2018. And in it, it included this new form of Venture Exchange called with the main street growth act that was wrought wrapped into it. It was like another JOBS Act, an omnibus bill, and, and it got passed, I believe, through the House of Representatives 406 to four if I’m not mistaken. So think about that. You can even get a proclamation through the house in support of motherhood and apple pie at 406. Before that was just amazingly bipartisan, and obviously had the backing of, of both the Republicans and the Democrats and, and it went and President Trump actually promoted it on on his blog and supported it, and it was supposed to get tacked on to the Senate appropriations bill. But the Senate Appropriations Bill never happened in 2018 because as you recall, they fought over the wall shut the car, shut the government down in the budget process. is down. And when it gets pushed into 2019, it has the effect of setting everything back to zero. So all that good work goes out the window is one of the frustrations. So, as I like to say it’s a, it’s a, you know, I could, you know, I could play in the NBA. And it’s a little bit like an NBA basketball game, and I’m only about six feet tall. And I’m not a very good basketball player. But if I hang around in the paint long enough, eventually I’ll get a rebound. Right, eventually,

Oscar Jofre  15:29

eventually, you get something. No, it, you know, it’s quite remarkable. You and I talk a lot about this on and off online, and about what it actually takes. And I know, because you you’ve mentioned, you’ve been on the other side that this is the part that a lot of us don’t get visibility into. They think it’s simply coming up with a bill and then it goes live. It’s so much work needs to be created. And I mean, you said it, it takes time. Do you think 10 years? Has? It’s been too long? Or do you think we’ve accomplished what you foresaw when you first got the started? Where we are today?

David Weild  16:12

You know, to be very, you know, very transparent. I didn’t know what to expect. I mean, I didn’t really go out initially, because I never knew how to log in my molecular geneticist by training, I went to, you know, NASDAQ. I never took a poli sci course. So I had to, I didn’t know how to get anything done. And so for three years of my life, I went out and I took a podium anytime somebody would let me speak, and I shared data with them. And there were some incredibly important people that I was is that I got into like, for instance, when SEC chairman, Mary Shapiro, who I you know, who I knew she was the Executive Vice President of, of the NASD when I was in the NASB controlled NASDAQ when I was vice chairman. And, and the other another one Mary, Mary Jo White was on the board of NASDAQ people don’t generally know that another SEC chair so I, you know, I she was called up to the Hill to testify and she was supposed to be the keynote speaker for the American Bar Association luncheon at the securities regulation luncheon luncheon in Washington, DC. And I got a call from the SEC, because somebody had seen me speak randomly to present there. And, and so that was fortuitous, because John White, who is a partner Acrobat and used to run the Division of Corporation Finance at the SEC. He, he was in charge of the curriculum for the most important securities regulation conference of the year that is sponsored by Northwest Florida law school, and, and takes place at the Del Coronado hotel out in, in, in San Diego, and all the SEC, you know, shows up there, so, so I got to speak in the keynote slot. That was the year prior that keynote was SEC chair, Mary Shapiro. So I was I was in incredibly good company, there were a lot of SEC people there. And, and I think that that helped to kind of socialize, you know, what we were saying and get people sort of comfortable with the notion that we’d lost a lot of our small IPO market, and we’d lost a lot of our publicly listed companies. And if you if you look at the SEC is mission, so tripart partite mission, then we can talk about, I’d love to see that refined a little bit. But it’s investor protection, it’s its mark is market integrity, and its capital formation. Well, if you dropped the bottom out of this small IPO market, it’s hard to say that you’re fulfilling your mission, which is is capital formation and the challenges is that the current market structure is not going to bring back small IPOs. So they’re going to have to come up. I mean, I’m just telling you right now, there will have to be a new market structure, you cannot have a one size fits all stock market that is optimized for large cap stocks and expect that it’s going to work to create that echo system that’s required to provide the sales, the marketing the research support, that that that illiquid stocks require, right? Yes, it’s a little bit like whack a mole, you know, they change something broadly and don’t think about it, and you know, to help, you know, investor protection and save people on transaction costs, and it creates a problem out the other side. Right. And that’s, and that’s the kind of thing that people that then have specific knowledge and care deeply about this country and North America and Canadians are our brothers and sisters and, and freedom in general as democracies and Commonwealth countries and we just all have to do a better job because we have, you know, major, major competitors with different forms of government that don’t respect freedom. And, and so, you know, we, as I like to say we have to be in it to win it, and we’re going to win it, but through our, through our art, you know, by funding entrepreneurs, engineers, scientists, and and and maintaining leadership in all of the technology sort of driven driven fields birthing entire new industries and figuring out how to replenish the fortune 500. The s&p 500 I mean, all the large cap stocks, we’ve got to make sure that, that, you know, we’re, we’re consistently reinventing ourselves and staying on the forefront of, of, of innovation.

Oscar Jofre  20:49

No, I agree. I agree. I mean, the, the one thing that I look back, going back to 2012, how when it when it came, the jobs that came in the entire world kind of got this shock of, hey, what’s going on? What do we need to do? And you’re right, it created kind of this domino effect, where other countries around the world started saying, we need to do something similar. You know, that’s why I, I remind people the Jobs Act, wasn’t it was it creating an opening up and changing the way that the United States was operating for its privately held companies and small stock, but it created a ripple effect, which, again, is drawing everybody back to the United States, it’s quite interesting to see that countries like UK, Canada, Singapore, Thailand, Chile, Mexico, and many others that adopted a very similar style, partly because of what you began and others, and then the rest of us became kind of the, the voices. I mean, that’s one thing that I I noticed about this, I mean, I, I’ve not been involved with anything regulatory before, where, you know, the regulator’s come up with a rule, and then you create champions to go out and people just did their own thing. This was different. I, this was different. Right from the get go. There was, as you said, there was the the people within Congress and making sure that it got through, and that’s where you were, and then there was the other side, the business side, which was the two of them coming together. I think this is the this is the the real key that people need to understand that made this happen. And it’s still happening. All of these portals, these 80 portals, and what’s it that’s just the portal, we haven’t even talked about FINRA broker dealers, the other intermediaries that are involved that are non regulated investor acquisition, that technology providers, I mean, we’ve created an entire ecosystem of providers, and we’re just getting started. So I

David Weild  22:50

well, and it also look, I mean, one of the challenges with with with the public market structure we have is, as I call it, the dumbing down of the, you know, of, of the investor community, right. I mean, we used to teach people individual stocks and stock selection. And, and, and brokers, you know, we’re we’re stockbrokers. They were on the phone talking stock ideas all day long with their client base. And, you know, what happened when we, when we took the economic incentive, Commission’s out of markets, that would that paid for people to go out and read market stocks, we started talking about exchange traded funds funds. So now, all these brokers are not brokers any longer their asset gatherers and asset allocators into fund ideas. But that doesn’t teach anybody anything about companies operating, you know, balance sheets, financial statements, business niche, I mean, you know, people are betting trends, okay. And in baskets and, and that’s not healthy, because it actually lowers our entrepreneurial IQ as a, as a nation. So, you know, you have to have people learn, and part of the old functioning of the market, which I think gets lost on a lot of people is is that, that, that back and forth with stockbrokers and that engagement and individual stock stories is actually creating a form of learning. Right? And, and it’s, it’s very, very important to sort of our aggregate entrepreneurial IQ and the ability to, you know, to drive upward mobility. I think that if we, you know, if what we did with the Jobs Act is getting back some of that, right, because we’re, you know, it’s actually supporting, you know, accelerators, incubators, it gives people other ways to aggregate capital, I could go out for an incubator, for instance, and fund it, fund the incubator through a 506 c jonway. solicited transaction which prior to the Jobs Act, you would have gone to jail for if you’d done it that

Oscar Jofre  24:50

way. Yeah, exactly. Exactly. sad to hear that. For those who did and you you actually have a you know, a lady that’s exactly what she Get right.

David Weild  25:01

Yeah, I mean, I love this woman. She’s an African American woman, Teresa Hodges she’s walking the talk. She was, you know, she did what is essentially, as far as I can tell, you know, kind of crowdfunding before crowdfunding was legal was convicted as a felon and incarcerated. And so, you know, she had this epiphany, she’s very bright woman and her daughter is running the company, because she can’t as a convicted felon, I’d love to get her a pardon. And because she’s really doing the God’s work of working on companies called our three, but they’re using alternative data sets to try and, and de risk the employment of people with felony convictions, right? Because so many, so many of these people are taken out of the economy and can’t get gainful employment, because they have this Scarlet Letter of a convicted felon on their chests on the record. And, you know, and it stands to reason that there’s some subset of people out there who can and should be employed or low risk. And, you know, for me, you know, one of the things that I just abhor about the what we’ve done in the United States is we have the highest incarceration rates in the world. And those people represent human capital. And we can either turn them into liabilities, or we can turn them into assets. And until we start to figure out how to get people turn back into assets, we’re never going to economically be banging on all cylinders, you know, we’ll never be as effective as we as we could be. And so, you know, I’m a patriot, I think everybody knows that I put my red white and blue epaulets on when I go and I testify in Washington, I’m not partisan. I mean, I care deeply. I mean, I spent 20 years of my life, helping the 911 community out, you know, I was I was chairman of the board for eight years for two of Tuesday’s children, which took care of the kids and the moms that lost and some fathers, that was parents on 911. And then we, we had these long term recovery services that we then dedicated and put to work for the US military, because it was a there was a part of the US military, sort of the charitable organizations that was left unfulfilled and it was helping the families who lost a lot of loved one a lot of times at work and they living on these families are living on military bases and men, their their spouse was in the military dies, and they’re kicked right off the military base effectively. So they need support services to, to reintegrate into society. So it’s been a labor of love. And you know, everybody, there were things that are more important than just making money. You know, don’t get me wrong, we all want to make money. But we want to do things that ultimately secure the future of the next generation. You have kids, I have kids. And you know, it’s our it’s sort of our solemn obligation to leave our countries in a better position for the next generation.

Oscar Jofre  28:02

It is, and that comes back to So let’s, we looked at the 10 years back, we look where we got here. So now that you have all this information that we what we’ve accomplished so far, what do you think is stored for us in the next five to 10 years, obviously, I’m seeing a brand new entrants coming into the ecosystem, people who sat back 10 years ago and saying, hey, you know what, this thing, I think this thing’s got momentum. I need to get in. I mean, I’m already seeing that. We’ve seen companies like JP Morgan, who, you know, we don’t know yet what they’re going to do. But the point is, people are looking at it, David, I mean, this is, this is quite profound. But from your perspective, what do you see for the next five to 10 years for all of us? As far as the jobs I guess it keeps evolving?

David Weild  28:51

Well, I do think that we’ve got to work really hard and get a an eye in IPO market structure, a stock exchange structure that’s optimized for the needs of, of smaller companies in the aftermarket is the aftermarket support model that’s missing, we did a paper I’ll call your attention to you can find it at the OECD the Organization of Economic Cooperation and Development. And it’s called Making stock markets work to support economic growth. And there was an economic model in there an econometric model that had a 70% R squared that basically said that the amount of the punch line is that the amount of aftermarket economic incentive is what drives small IPO activity. People have to make money supporting the liquidity in the aftermarket. And if they don’t, then the market shuts down and the small IPO activity declines. And we in that paper looked at 26 IPO mark as the 26th largest and it included and it was on and we looked at IPO activity on a GDP weighted basis. So, obviously, you have to produce a lot more if you were the size of the United States than you do if you’re Canada. And if you’re Singapore, for the sake of argument, we just looked at the domestic subset of IPOs not foreign listings, we took those out. And, and I think it was, it was pretty compelling. I mean, I think we know how to design if somebody would just give me the pen and, you know, bring me down to Congress and work with both sides. We get this thing licked. I mean, I’m not, you know, it’s, uh, you know, NASDAQ could brand it, I mean, but ultimately, it’s not NASDAQ’s profitability that matters is not the New York Stock Exchange is profitability that matters in micro cap, stock support, it’s the profitability, and the economic incentives to the value providers. And the value providers are those that have to provide equity research, get on the phone and sell a stock when there’s a big seller coming in, they have to create new orders to offset that selling where new buyers, you know, to offset new sellers to offset buyers, they actually liquidity is created in these asymmetrical Waterbrook micro cap securities. It’s not it’s generated. It’s not it’s not organic is not instantaneous. It’s not just sitting there to be taken off of the machine. And I think that that’s the tragic mistake of you know, what Arthur Levitt did all the way back in the 1990s, which is he you know, collapse trading spreads and commissions simultaneously went to Penny tick sizes, which is the minimum increment that you can trade the stock went to all electronic order books. And so that what happened was people just pulled the capital and the support off these micro cap stocks, because they were getting their clocks clean. They were, they were sitting there. And you know, you’ll remember something called this this, the SOS band is this small water execution system, bandits. And all of a sudden, somebody was in a market makers making 20 stocks, he’s focused on Intel in his book, he’s got these micro cap stocks, all of a sudden, bang, bang, bang, bang, bang, he’s hit with a with a machine gun of 100 Share orders, all of a sudden, he’s long 20,000 shares of a stock that he can’t, he has no exit for, and there’s no economic model any longer to kind of dump it. So what happens is they have to move up market, they abandoned these micro cap stocks, they take the they take all the capital out of supporting them, they take the research analysts off of them. And it goes on it’s like death by 10,000 cuts. It goes on over years over at year after year. And it was like a conversation I got it was at a Milken Institute conference with Commissioner Pivovar. And Mike, Mike was the mike Pivovar was one of the few ever non lawyers as that were commissioners at the SEC. And, you know, Mike, Mike is a micro markets economist said, Dave, how do you know, it’s cause and effect? And not correlation? You know, classic PhD economists sort of question. And I said, Mike, because I fired the people. You know, I mean, I was running a business, I was overseeing, you know, strategy on a top 10 and securities firm in for investment banking, equity research, institutional sales and equity trading. And so I was looking at the economics of all these businesses and what was going on, and, you know, talking to all the departments, and, and, and, and helping recraft the strategy. And, and we were just, we were hemorrhaging money. I mean, so no firm can do that. And it takes a while to adjust, you engage in a lot of wishful thinking, you know, you can’t believe that the market is, is has changed as to the negative as much, but it has profound implications. And, you know, we had an entire eco system that was built up around that economic model that will all of a sudden started to wither. And so it should be little surprise, that we lost so much support for small IPOs. But if you actually look at our data on some of our papers, like making stock, you can you can go go. Market structure is causing the IPO crisis, hyphen, and more. And you’ll see that we have charts in there that shows the the abrupt drop off and the small IPO. And it just it went from me $25 million IPOs went from, you know, being a hundreds of them a year down to 25 a year. It just it just was like it just was cataclysmic. And for those of you that don’t understand the significance of this, and I’ll make it real. The sector that had this, the largest number of small IPOs was the medical device sector. Because these tend to be single product companies and you know, you and I just got back from I’ll give a shout out to Scott pantalla, who just did an amazing job for the LSI med tech summit at Dana Why’d 750 people congregated there? Yet from the medical device profession, everybody from the big companies to 100 smaller companies. I mean, this is Social Impact incarnate. And this is why we do what we do, because we’re solving problems, medical problems that are going to improve the quality of life. Remember, we said that the number of IPOs tripled in the biotech sector? Well, we’ve got to do that for the smaller IPO sector as well. And medical devices. And that’s going to require, you know, that we all kind of pulled together, you’re working on regulation, a opportunities for medical device companies, I mean, I’d love to get Congress to give us what we sorely need, which is the economic incentives and a properly structured, small IPO market. If we do that, again, to paraphrase, you know, my my friend, and a great American patriot, Senator Ted Kaufman, if we fix the aftermarket for and for small for small IPOs, we will get America back into business in a big way, in a big way.

Oscar Jofre  36:02

So it’s interesting, because I hear you speak it. Once again, I think it’s good for everyone to understand that. Even though it seems like the Jobs was only there to spearhead privately held companies to allow the intrapreneur to raise money capital, but it’s actually a trickle effect to everything else. I think that’s it, that’s the chain that you pointed out here today is that we have a problem up here, which is really important. But in order to fix it, we need to come all the way down, which we have, we’re now allowing people to raise $50,000 If they need to, under one regulation. And if they need 75 million, then we have Regulation A and I personally hope that if my wish list right now is that I hope that the SEC, as they have privately indicated in, in several conversations that they will increase it to, you know, 150 or more over time, because to your point, met tech companies, you know, they’re, they need capital, their capital intensive, right, FDA testing trials and all that,

David Weild  37:05

you have to get them you have to get an FDA approval, right. And so you’re so you’re you’re you’re you’re you’re losing money, right investing, investing, you have no way to monetize or to try sales, and then even an FDA approval a lot of times is an F nine 510 K, which is as good as the predicate, you know, their pre existing condition, but then you have to demonstrate to the market a couple of conditions, which takes a while to do one, that it’s better that it has, that it’s better for patients, because otherwise doctors are not going to go and change what they’re doing, to try to do your to use your new technology. So so that’s that’s the cost that that’s the, that’s the the entry ticket, if you will, and then you have to demonstrate that it’s going to increase the economics of the doctors that are in the hospitals, they’re going to use it because you know, I hate to say it, but one of the challenges we have in the medical device profession in the healthcare profession is is that if it actually hurt somebody’s economics, because it’s a it cures patients very quickly, and they’ve got a recurrent thing that that that the adoption is likely not to be there. That’s one of the things in order to drive the cost curve down. In society, we’re healthcare, we’re going to have to try and figure out because there are a lot of things that get mothball because they threaten somebody’s economic model. And, and but, but you know, there’s a lot of work to be done there. I mean, it you know, you want more if you want to be successful. And, you know, you have to have, it’s like baseball, you have to get the at bats. And, you know, if you want to have enough hits, and we’re not in the more at bats we get, which is the more companies we start, and we can get funded all the way through commercialization, the more successful we’re going to be, and, and curing people of disease, of driving economic growth of, of, you know, creating the next generation of drone technology that’s important for the US military, you know, the new new forms of weaponry, so that we can, you know, maintain our our freedoms, you know, this, these countries in the in the NATO alliance, are, are defensive in nature, they’re not offensive. And as you can see, there are other countries that, you know, are perfectly happy to go in and invade other countries and to, you know, to occupy them and swallow them up hole. And I think that, you know, I mean, I don’t want to be alarmist, but I think that, that, that being militarily superior to autocratic regimes is essential to preserve democracy. And you have to find that democracy through economic growth and higher innovation rates. And if you compromise those things, you Put the entire freedom, freedoms of the of the free world of the democracies in peril.

Oscar Jofre  40:10

Well, these are your right, these are interesting times as, as everybody’s watching the news, but you’re right. I mean, sometimes we were all harmed in in, in fixing and making things better in our front. But now people can see the impact of that as well that has a greater impact for all of with all of us around. As we’re coming down to the closing I, you know, I want you to go to that crystal ball. I really mean that. Because, you know, there’s a lot of people wondering what will what is expected is just going to flat out I mean, we don’t want the job sector flat out. I think you’re already working on another organization already to make sure that the day jobs that keeps evolving, because you said it. I mean, we haven’t fixed it all. I’m I mean, we’ve just opened up primary, we haven’t even talked about secondary market trading. And that’s just the first 10 years, right, we got so much way to go. And, and we haven’t talked about the infrastructure that it lays out. We all make assumptions that everything is ready there. There is the there’s the will, there’s the people, there’s the companies, the investors, the issuers and all that. But there’s still a lot of work to be done. But for your from your perspective, do you foresee that we can continue the journey of growth using the jobs act with Congress and the you know, the current administration to further enhanced the private markets to again, to your point, by enhancing the privates we actually end up getting what we need for the public markets to make it a more viable public markets for everyone? Is that in the insert in the future, do you think?

David Weild  41:52

Well, I, I want to get back to writing public policy papers. I mean, we might company as you know, sort of, we’re trying to create part of the solution, I think we you know, we were an investment bank, we, we now have professionals 120 Plus professionals in 2122 states and the District of Columbia and four countries count in the US. I mean, we want to take it to 1000, we need, you know, growth capital to do that really aggressively. You know, it’s getting better and better. We had a blowout, we had an incredible first quarter, we actually advised on a on a deal that Goldman Sachs was on the other side of so you know, we were so we you know, we’re breaking through a little bit. And, and, but you know, part of the that is I want to get back and put a resource in place to start writing papers again. Because it there’s a lot of hard work here, I don’t want to I’m gonna tell you things that I want to see, I want to see that, that that IPO market for smaller companies, it has to happen, I want to also see, you know, a tax credit, which is a very difficult thing to do in Congress to invest in entrepreneurial growth companies that are housed in opportunity zones. Because if you think about it, wouldn’t it be wonderful video is that and set up accelerators and incubators in into depressed areas of the country. And because there’s a lot of look, I spoke it, and Rodney Rodney Samson’s 50th anniversary of Martin Luther King’s march on Washington, and it was all kids from historically black colleges who were very entrepreneurial, and really, you know, enlightened and gifted. But, you know, if you’re disproportionately part of the poor, you know, poor segment of the society, you know, and most most of these businesses and crowdfunding, you know, these tools that we’ve created, I mean, the, the challenges is that a lot of these businesses get started with friends and family money. And if your friends and family are poor, you’re not, you’re not going to get a business started. So if we could have, you know, Go into all the poor neighborhoods, and set up incubators, and a lot of them are already in existence, but put a tax credit in there to keep the jobs in those areas and to create an on an entrepreneurial growth culture in these four communities. Instead of kids just wanting to become a rap star, or, you know, we’re a professional basketball player. We’d all of a sudden, you know, make the new rock stars, entrepreneurs, we’d completely changed the growth culture, we would have put a spotlight on education. And I think we could create massive amounts of upward mobility. And my guess is is that it would actually be very positive for the US Treasury for a lot of reasons but we have to write that paper and, and it’s a very tough thing to do in Washington because it crosses a couple of committees I actually had this discussion with with with Vice Chairman in the house So Subcommittee on Capital Markets, and the minute I raise tax incentives, he just he started twitching, because he said, you know, the minute you start doing something like that, he said, all the crazies come out in Washington. But you know, there were things that are really just fundamentally healthy. That’s one of them. There other things, you know, in our in our quiver, we’d like to do, I’d like to see, you know, Regulation A plus taken up to 150 million, you know, 200 million, I’d like to see, you know, that new form of stock exchange, I would, by the way, I would say one of the things we didn’t mention is, you know, the unicorn phenomena is was put on steroids by the Jobs Act, why? Because we sort of decriminalize the ability to do crossover investing and to broadly solicit test the waters. And so you know, so if you if you look at and what happened in the wake of the Jobs Act, you’ll see hundreds, you know, per institution, you know, 200 investments, crossover investments, pre IPO investments, made by orba med these are this is a vertically integrated life sciences fund Deerfield another one perceptive, but also fidelity, T Rowe Price. And the challenge now is you got 800 Plus, you know, unicorns, and you still have an IPO market that’s only doing 120 or so, you know, bonafide IPOs a year, and you got an SEC that is, is, you know, sort of dampening down enthusiasm for Spax. And we’ve lost a lot of the salespeople that can broaden distribution on new issue equity. So we have a capacity constraint now. And and we have to, we have to build the capacity back to ultimately, you know, take more and more of these companies, public the old fashioned way to give them a square deal to broadly distribute them and give them a bonafide distribution. One of the one of the things that happened to distribution in this country, is that because they collapse trading spreads and commissions, say, in round numbers, there’s 30 513 F reporting institutions in the US, the typical bulge bracket Wall Street firms only covering 60 of them out of their institutional equity sales force. So you and that’s because that they represent 90% of the commission pie in a hyper trading, you know, high turnover environment. And so and they’re also and or they’re Ultra large cap in focus. And so the real distribution that we need to build back, it doesn’t exist in public markets, to serve the needs of, of smaller companies. And so that’s an ecosystem build in its own right. And so, you know, until we can get the economic incentives in there, and it’ll take years and years and years, it won’t happen instantaneously for people to build back that distribution and brokers, you know, I’d rather get moving sooner rather than later, while we still have some people that understand how to be stockbrokers as opposed to asset gatherers and investment advisors. Right. And, but those are the those are the two things on the wish list, I look, I we want to we want to we want to drive, we want to get the American dream into the hands of people in poor communities. Okay. It’s really, it’s, it’s what we are from a DNA standpoint as a people and we can’t lose sight of that. And we want to, we want to accelerate the amount of small IPO activity in this country. And to do that we’re going to need a new form of stock exchange, in my view, or stock rules. And by the way, it would plug and play we can talk about it on the KoreConX at some point, right, but, but we need we need the carrot for people to do the hard aftermarket work. Where are these stocks languished?

Oscar Jofre  48:52

Yeah, I agree. I, I am so pumped. I mean, I can’t believe my journey has been 12 years into this and my enthusiasm towards it being a Canadian, I get, you know, you get to appreciate something that is so profoundly, you know, it changes everything, the dynamics of it. Now, you know, since you and I have been talking over the over a decade, it just, it’s interesting to see the effects of it, not just you know, sometimes as intrapreneurs we only look at what we need, we need to raise capital, Oscar, this is all I need. All the other stuff doesn’t matter to me, but it does. Because if this isn’t fixed money over here isn’t going to come down over here. And, and that’s what this has been doing. That’s why, you know, the reason why regulation and regulation CFR are growing, and they’re going to get better is because it’s starting to put all these pieces into play. So I’m excited for the next 510 years. I see. There’s going to be ripples for everybody listening in, in my view. I Think we’re still how we’re going to come through some, some disturbances, it’s a nature of any momentum, you’re going to see where you know, don’t let it don’t let it make you think that because of their downfall, it’s reflective of everything. It’s just this the nature of the beast, some people are here purely to take advantage of these regulations. I’m a big advocate of transparency, governance, reducing the cost of for intrapreneurs, to raise capital, being fully committed to keeping everyone in line for their fees. Because the Jobs Act was created to help everyone not to exclude its inclusion, not exclusion, we’re not becoming another private club. We’re only once again only those who can afford it can participate. So I am, I’m so looking forward to the next 510 years. And not only that, I’m I personally see it when when other countries around the world are saying, what is America doing? That’s got it right. Do you see what I mean? You know, there are countries like Australia, UAE, Saudi Arabia, Kenya, wealth, Africa, all of these countries are now saying, I need to do something because otherwise I’m going to lose my talent pool. But that’s, that’s the reality of this model. This could be a global intrapreneurship initiative that got started right here in the United States. So I have, I mean, I applaud you, David, I applaud everyone. Because if it wasn’t for those individuals, that not just stuck it through getting, you know, Barack Obama, the president of the United States in 2012. To sign it, that was one part. The next part was actually just as tough grinding it out. David said that when reg CF first came out, it was five it was supposed to be 5 million, but it only got a million. But a lot of you didn’t give up you know, Republic, we found her start engine seed invest all of you stuck around there micro. All of you were there. You never gave up on it. You stayed there. I applaud you all. I really mean that. Everything you have today, you deserve it, because everybody else gave up on it. Oh, it’s not worth it anymore. You made it a business you were there to help those companies achieve those goals to raise 50,000 100,000 200,000. You know, I remember the first year the Sherwood nice started publishing data from his firm, it the numbers, you know, we were excited. Okay, so we raised $10 million people go, Ah, it’s just a small number. But now we’re in the billions. And see how time goes by. And that’s why it’s so encouraging for me. So those are my, my closing remarks is that we are just at the costs. We are just we’ve been in that dualism, the last 10 years. And as David has just indicated, we still got more work to do. We all need to be committed to working with people like David and others who are committed to creating lobbying groups to help us make this even better, because there’s, for those who are engaging in the private markets, you’re going to discover that primary may be all there. But secondary, you’re going to, you’re going to need people like him to remove some of the big headaches are in there that are going to become barriers. For everyone involved. Sorry.

David Weild  53:30

Yeah, no, you You’re exactly right. I mean, you’re going from startup to to, you know, seed round to a round. I mean, you’re you know, you’re walking it right up, you know, the capital markets curve. And ultimately, you gotta get an exit, right and, and there are two types of exits, right, there’s sale to another company. But ultimately, a lot of value was lost there. If you if the number of public companies that are acquirers you know is smaller, there’s less competition, but also, there’s a lot of businesses and a lot of industries that are birthed that don’t have a natural acquirer, and they really need to be taken public. So you really need those, that public market that IPO market to work for smaller companies, which it doesn’t right now. So that’s really on the wish list of absolutely essential things that we need to get done through Congress and, and ultimately the President’s desk. I would say, by the way, you know, Doug ran went to the President of the United States when he was at that meeting with me and he and President Obama, to his credit, wanted this bill, he wanted the bill. And what I heard was he put two lobbyists on the Senate Democrats to say the President wanted this bill. And so it went through the US Senate much more quickly. And uncontroversially Because the President showed leadership there and I you know, I want to I want to make the make that make that clear. I would also tell you that that you know, and I get into this discussion with a lot of people on that are on the Democratic side, but You know, my African American friends understand this, because, you know, they had been deprived of capital living in poor communities many times. And so things like crowdfunding actually give them the hope of being able to finance businesses. And so, you know, in the wake of the jobs act, you know, I spent a dis disproportionate amount of my time being invited, I went to the, to the Obama White House for the I Have a Dream Summit. I went to I spoke for Jesse Jackson, at the Rainbow PUSH coalition around on a crowdfunding panel, I spoke at the National Black Chamber of Commerce, the, you know, the, the, it really kind of opened up, you know, a path to kind of self, you know, to entrepreneurship, funding entrepreneurship, in minority communities. And what I would just like to say is that is that we really want to accelerate that, that’s incredibly important, it creates hope, it creates upward mobility. And, and what what folks don’t generally understand is that it’s very difficult if you’re in a poor community, to get finance, because we, you know, we tend to get, we tend to finance things or get things started with friends and family and, and if your friends and family are all poor, there’s very little access to capital. So I’d love to break the back of that, it’s a little bit of it. And I think it would be very healthy for, you know, the, the, the country, I’ve got a lot of very talented minority of friends of people of color. And I can tell you that they’re just as enthusiastic as entrepreneurs. And, and just as innovative and just as interesting. But when you know, we have a tendency in country in the country to, you know, to work with the people that we know. And, you know, we grab on, and so if we’re, if we’re part of a white community, we tend to pull together white people, right. And so if the white people have all the money, and access to money, they tend to be able to get more things done. And so I think it’s time that we sort of, you know, break the back of that, that problem, and think a little bit out of the box, and how to how to get capital flows. I’m a big believer that the capitalist system is the best system. But but but tax incentives, other economic incentives. And you know, where we stick the carrots, and how we stick the carrots out there is incredibly important to driving to better economic outcomes. And so, for me, it’s a big white canvas. And we just have to develop those incentives. And if we do watch out, because we’ll be unstoppable as a nation, to your point, it’s everybody’s responsibility. This is a democracy. They listen to their, you know, the people in their local locales that their congressmen do. If you if you take it for granted, there are people out there that are going to line their pockets, that larger cap that are, are going to go down some path, which is going to be contrary to you know, what, we’re all trying to build and rebuild as an economy. And so I would say it’s each of our responsibility to fight for what makes right and, and, and not to leave it up to somebody else. Because if you do, and by the way, the votes one thing, right, it’s great to have a vote. Yes. But you know, the real battle is fought when you’re talking to your congressman and your senators and showing up. And so I would urge everybody to, you know,

Oscar Jofre  58:45

I think that’s what we’re opening with you right? We’re going to need to regroup again. Get back into that, because the journey is now begun. The momentum is there. I want to thank you, David. I mean, I wouldn’t exist as a company, I’m living proof. I fit all of those. I’m the minority. I’m, you know, it, this revived this, it my business would not flourish because of the jobs act. You know, we we were a company of to myself and Jason foodco, when we first jumped, jumped on board to the all of this even before the Jobs Act got started. Today, we’re a company almost over 50 people. And all of that is because of so the evidence is there. I see it, I see the ecosystem. I see new companies forming everywhere, new participants being created. And that means jobs jobs are part of the jobs act as well. And but more importantly, the intrapreneurs that are building their businesses. I get excited about the one that raises 10,000 People often ask me Oscar, there’s got to be a sweet spot for you and I go there prism, my sweet spot is, I want to see everybody have a chance to build rooms. And I’m not here to judge. I don’t judge. Yes, I have favorites because of my prejudice towards I like technology. Do I understand med tech? 100%? No, but can I understand that the answer is yes. Is it even possible? Yes. And same thing with every other sector, the Jobs Act doesn’t, you know, discriminate whether you’re from, you know, the cannabis or construction or oil and gas, if there’s a market for what you do, and there’s an audience that appreciate it, and they can have an opportunity to participate in your company. This is it. So thank you for the last 10 years, thank you. And I know, you’re starting something new. And I encourage anybody listening in today, if you want to assist and help in the next generation of the Jobs Act, because we got to get this thing going. We We are from a business side. But as I said, and as David indicated, at the beginning, it takes two sides here to take real change,

David Weild  1:01:00

it takes an army, it takes an army and I asked her, you know, I adore you, you know that you’ve been a walk the talk human being since the day I met you, which was at least a couple years before the Jobs Act, okay. And, and, you know, I think that if there were more people, like you, you know, in, in the free world, and hopefully you’ll inspire people to do more of what you’re doing that, that the world would ultimately be a better place, you know, we’re going to solve climate change, because of engineers getting funded, you know, entrepreneurs, somebody’s going to figure out hopefully how to, before it’s too late how to take co2 out of the atmosphere, you know, if you look at what’s going on in the project finance area. So I mean, I’m just saying this stuff is so critically important, because anybody will tell you that the rate of innovation is much higher, with smaller companies than it is with the behemoths, you know, the fortune 500 for a wide variety of reasons, they become sclerotic, and risk averse, because they have so much to protect, they can’t take the risks. And it’s the young, it’s the, you know, young bucks and lasses that you know, that have, have entrepreneurial instincts and education and, and access to capital, that are going to really, you know, pave the way to a brighter future and you can’t take it for granted. It’s, we just gotta get, we are all part of this echo system. You know, if there’s always a fight an ongoing fight, it’ll never disappear in Washington to preserve what’s important for him for for all of you, and, and also to make your contributions as, as entrepreneurs. And so anyway, I want to thank you, Oscar, for being such a leader in this space. You’ve been awfully terrific. Wow,

Oscar Jofre  1:02:52

I was I was gonna say thank you. But thank you to everyone as well. I mean, it’s, it’s, you know, thank you, everyone for being here. Today with us. We went longer than expected. But this is a conversation that I kid you know, we could go on for hours, because there’s so many different parts to it, but you kind of got the high level. And again, if you want to reach out to David, he’s very easy to reach out to go to LinkedIn, he’s there you can find him. He’s not a person that will shy away from a conversation opportunity to continue the journey. So until next time on KoreTalks from KoreConX. Thank you, everyone. Have a fantastic week and happy 10th year anniversary for the jobs act. Cheers.