Oscar Jofre  00:00

Okay, welcome back. Alright, so you heard about the back office how important that is, right? Well, that back office didn’t happen. And now you understand the importance of the back office and the work that they’ve done. This next panel, obviously, is going to be discussing the data, the research that we need to go on. And most important, the impact of that data that it’s having on all of us. And more importantly, the as you saw, when Sherwood Neiss presented the information earlier, I don’t know about you, but I know I was lit up. This is very first time you’re seeing that it’s working. This is it. This is this is the proof is data. Data is the key data and research is the key ingredients, to bringing awareness to enlighten everyone, and more importantly, to bring confidence to a market. So I’m really excited. I have another colleague of mine, Scott Pantel who’s going to join us here. I know sure what he’s making his way in. But until he does, Scott Pentel it, you’re there. Scott, I just want to make sure that you’re all set up properly. 

Scott Pantel  01:18

Yes, I’m here. Can you hear me,

Oscar Jofre  01:20

I can hear you all make sure that they put a side by side here. So I can so I can see you. Right now you look in that tiny little screen. So I’ll make sure that Carolina fixes that immediately. Alright, so but in the meantime, you know, Scott, why don’t you take a moment to introduce yourself, please.

Scott Pantel  01:37

That’s great. And Oscar, thank you for letting me be a part of this, this event, to been a terrific session, I’ve learned a lot. And I’m just I’m really happy to be a part of the ecosystem. There’s obviously some really, really exciting things that have happened. And the future is very, very bright. And I’m thrilled to, you know, play my role in the ecosystem. Just for a quick background. I’m CEO of LSI. We’re a med tech, healthcare focused market research and advisory firm. So we work with, you know, venture funded startups all the way up to the biggest healthcare companies in the world that acquire companies invest in companies. And so you may be asking yourself, What are you doing here? And the reason I’m here is because, you know, over the last 20 years, I’ve watched some really terrific companies get funded. So I’ve watched early stage companies that are developing medical technologies, get access to capital, bringing their technology to the market, and help patients and change the world. And that’s why we’re all here in my industry anyway. But what I’ve also observed is and watch, unfortunately, a lot of really impactful companies never get to market simply because they could not get access to the capital that they needed. Maybe their deal was too small for venture capital, private equity play, maybe they just had to have the doors opening for them, that others were having open up for them. And so you know, nine months, 12 months ago, I’ll be honest, I was a big skeptic of this whole market. And I’ve educated myself, thanks to you, and a lot of the events you put together. And I am a believer now. And I’m watching medical device companies, med tech companies use Regulation A plus and these other vehicles to get the capital they need so they can get to market. I’m really excited because I get to help with some of those companies. I have a partner, he and I, Steven Brock, are focused on healthcare, and we’re working with companies and helping them raise capital. So we’re just happy to be a part of it. Our role, my role here is to provide research and data to support those companies. And then to walk them through the program and the ecosystem that all the folks here today are a part of it’s really exciting. So thank you.

Oscar Jofre  03:48

Wow, no, you know, I think you nailed it. I mean, that the reason why we’re having this and Sherwood just sent a message to everyone, he sincerely apologizes that he’s just not, he’s, he got double booked because we’re running late. So I do apologize. But his presentation will be available to everyone. Now he’s given me some key points to make sure that I address in here and I you know, it’s great that I get to have a conversation with Scott as well. It would have been great with with Sherwood as well. But you know, Scott, you You nailed it. Almost a year ago, you were a non believer, and I think this is really important for everyone to understand. You come from a research firm, you you’ve done the research. Just curious from the research, was this in your did it ever show up on your radar? Did the Jobs Act or these regulations ever come up? Or was it just kind of that’s crowdfunding? It’ll never work for us. Just curious from that. Yeah.

Scott Pantel  04:44

So the answer is it was on our radar. We were aware of the vehicles. But there’s this perception, I think across the board and especially in our industry, that you know, and that’s an option, that’s an alternative. And that’s really, really changing. And so I mean, to answer your question directly, we knew a little bit about it. We didn’t take it very seriously. There were some leaderships and visionaries out there that have been talking about it. And we just started paying attention nine months ago, and educating ourselves and observing what was going on. And I’ll tell you that today, there are, there are companies that are out there making it happen. Right now we hold an event, my company hosts a big event, once a year on the west coast, where we bring together venture capital, private equity, the big strategics, the folks that are out doing m&a, we vet 100-150 companies that are developing innovations, we talk about the industry, and we try and do deals. And it’s always the traditional venture capital, private equity, maybe some family office, angel investing money in there. And I’ve watched over the years, these companies lose a ton of equity and raise really small amounts of capital along the way. And I’ve watched many not raised capital at all, as I mentioned earlier, so we’re seeing it happen. It’s not just words anymore, we literally have companies that are going through the program, they’re having success. And I think that this is really, you know, we’d like to say it’s a moment in time. And you’ve probably been saying that for a while Oscar, but in our view, in healthcare in med tech, specifically, people are really embracing that it’s a moment in time. And I will also point out that, you know, those traditional venture capital firms that they’ve had it really good for a long time, I think they’re also becoming aware that it’s a new world, you know, and, you know, there’s so many great things that are coming out of this. And I saw some stats that you published, just recently, about female founders, founders of color that are, that are real, that are, they have a better shot at getting access to capital. And that’s one of the great things that I think also comes out of this out of this movement that we have here.

Oscar Jofre  06:53

Well, and you know, one of the, one of the points that Sherwood told me to tell everyone, without the data, we wouldn’t be able to have this meaningful discussion, meaning that we can now show people anybody says all that’s great, but we can show you that we can show you the information. And it’s just getting started. Right. And that’s, you know, one of his projections is that we’re going to do a billion in one month. I mean, I one year, we did a billion in five years. Now, let’s look at the short timeframe. Why because the infrastructure is getting there. But what what is really telling you, it’s this information, I believe, research in this capacity. And obviously, you’ve been doing this for a lot longer, Scott. So I’d be interested to hear your points on research, why it’s so important for an emerging market. I see it as a validator, that it’s indicating that this is in a northward trajectory. That’s because when we started this 12 years ago, we had nothing. I’ll never forget this. I mean, I know Sherwood, Sara, David, we all remember these days where people say all No, it’s never going to work, it’s going to be full. And it’s going to change, you know, we thought it was going to we could show them all the graphs and charts, but it didn’t matter. They were projections that were based on what may happen or so on. But then this came out. So how important is research in what you’re doing? And now you’re going to adapt it to the Jobs Act? Like how, how important is that to get awareness from the companies? And then of course, the investors are at large?

Scott Pantel  08:29

Yeah, so really good question. And we? So the short answer is, it’s really important. You know, no investor is going to invest in a company until they see this, they see real data, you know, how big is the market? What’s the competition? Is it growing? That sort of thing. And, and one of the challenges for these small companies is they’re out trying to raise capital, the investors are telling them to show us the data to prove that the opportunities there. But these companies, you know, by definition, don’t have the capital to to gather the research and retain the research that’s required. So it’s sort of the chicken in the egg thing. And so we’re seeing that change as well. We looked at, we looked at 218 deals Oscar in the medtech space in the healthcare space, since 2020, and is a pretty comprehensive set of deals. And there were some interesting data points that came out of it. And the first one is that the average series A deal was the companies raised on average 7.3 million, they gave up 30% 31% of their company on average for those deals, the average Series B financing was 16 million, and on average gave up another 23% of their company and for the companies that made it all the way to a Series C and hopefully they got close to market or had an exit. They’re raising 30 million on average, they’re giving up another 25% of the company. So if you do the math, these companies that are going through the traditional route, they’re giving up north of 75, nearly 80% of their company along the way. So, you know, we need, they need access to research, they need access to data, so they can prove their opportunity is there. And you know, this is helping them to do that. So, again, it’s critical, they’ve got to have research, we’ve got to have more data in this ecosystem to support what’s happening. I know that Rialto recently published some really interesting data that pointed to, you know, nearly a 90% success rate for companies that were raising 25 million, and the papers out there, you can Google it, and you can find the data. But that’s the type of information that we need and the research, we need to get everybody to continue rallying behind this movement.

Oscar Jofre  10:45

Well, it doesn’t just rally it, I see it as, obviously, it’s encouraging for other companies to say, hey, you know what, this is working. But more importantly, I think it also demonstrates to investors that wait a minute, I better not sit here too long, I may miss out on something. And I think you even said it, I firmly believe this is the time when venture capital, private equity is competing with the crowd. You know, David Weild, always told me, you know, 12 years ago, I’ll never forget, this is still ingrained in my brain, which is, you know, I, as an entrepreneur, I always keep hearing, I’m sorry there’s no more money, Oscar, though it’s dry out there. You know, that’s what we get told as entrepreneurs. And I have no data to to say, No, that isn’t too and I’ll never forget, when I was sharing that story with him, he goes, Oscar, let me put this in perspective, there’s $36 trillion, sitting in this bucket over here. And I just want you to know, it’s sitting there. It’s there. And then there are the entrepreneurs over here. And then this whole thing in the middle here that you got to navigate through. And that’s the there it is. There’s the yes, there are some companies that know how to navigate there quicker with venture capital. And I applaud you this is not to say, venture cap was not good. Obviously, there are different reasons why people would do it. But it doesn’t represent all the companies that raise capital. And this is why I think research and data is so important. When you consider that only 0.000055 of companies who raise capital in the United States are actually the ones that we see visibility to. So imagine every single day when you wake up in the morning, it’s an intrapreneur. And you go, hey, you know, what are my odds of raising capital today, and you see a pitch book report in CrunchBase, of another person, a company raising venture capital money, your only guide stick is that. That’s it? What this is now showing, you know, that is not the only venue for your opportunity. And, you know, you now have choices, and you can navigate them in such a way that you can determine your own path as to how you’re going to get there. Venture capital does have a spot in here, they do bring things that other capital doesn’t bring. But now you can bring them together if you can find the right mix. And but now you got data to validate it. I mean, that’s the support for me, I get excited. These are the two areas that I’m excited about with data right now is that it demonstrated that where the biggest amount of capital that is being injected to by investors are investors that are over 40 years old. So everybody thought, oh, Oscar is just the millennials online? No, it’s not. It’s the 40 to 65. So those who are looking for you know, it, was this the time to become an entrepreneur, well, this is it. That’s number one. And you and you touched on it minorities, right? I’m Hispanic. So being a minority, you know, unless you want, you’ll never really understand it. But when you’re raising capital, you certainly feel it. So this is an equalizer. 

Scott Pantel  13:55

 It really is Oscar and it’s just making me think of some other observations that I’ve made over the years. And that is that, you know, at this event that we hold, and we’re bringing together, you know, accredited investors and big funds and institutional money. And you know, we will, after every event, I’ll have somebody whether it’s somebody from my staff, my family, from the hotel staff, say to me something like gosh, I saw that presentation on that company that’s curing cancer, fixing an orthopedic issue, fill in the blank, whatever it is doing something really special, I sure would love I would love to invest in that company. How can I do that and up until now, you know it there’s the options are limited. And what this does, is it allows everybody to get in on the action everybody to get involved in a company, in an opportunity that they believe in. And it levels the playing field. Like you said, I’ve heard many times over the years as well. There’s not a lot of money out there. It’s never going to happen for you. Well, this completely levels the field. It puts the companies in control, it puts the founders in a stronger position. And you know, I’m an entrepreneur, you’re an entrepreneur. You know, it’s not easy starting these ventures. And, you know, we, it’s the blood, sweat, and tears that go into building these ventures. And so I’m a big fan of giving the founder giving the CEO more control, letting them run with their venture longer throughout the lifecycle. You know, we see some CEOs that are founders that they drop off at a certain point, for various reasons. But these are the ones with the vision and the dream that really can take this all the way if they have the resources to do so. But I just wanted to point out that. And the other comment is that we’ve also seen a lot of venture capital funds, look at opportunities, and the fund will say, that’s not really the right, that’s not the technology area that we’re interested in. But there may be somebody at the fund that wants to invest in that deal. So they can now invest outside of their fund into deals through platforms like this. So it’s exciting across the board. It really is.

Oscar Jofre  16:12

Oh, I agree. And I agree. And obviously, we’re staying in touch with the subject data and research, and we’re excited because that data is there. And look at today that report and of course what you’re doing. Since the day I’ve met you and Steven Brock it’s just been an eye-opener for me as well. And I think there are so many other channels similar to this that are doing, we need to enlighten them to see the opportunity of these regulations and the impact it can have on companies and everyone at large. And you’re noticing in, in one of the closing points that I’ll make here that Sherwood said which really caught my attention afterward, which is he didn’t go to Capitol Hill saying let’s give them access to capital, it’s to create jobs. And I mean, think about that very statement right there. I mean, he showed us that 250,000 jobs contributed to the US economy and taxes. I mean, that it’s not just the capital that allows to dream it, employed people, as well.

Scott Pantel  17:18

Absolutely.

Oscar Jofre  17:21

It’s a very impactful element. So for everyone else, obviously, look, this was we want to recap the data side, the importance of it. Now it’s going to be available, there is going to be some tricky components to it. There are some companies that are doing analysis on this sector, like Sherwood Neiss, who is bringing out reports as a whole there are companies who are doing research in individual companies. That’s where the investor base, that’s not for the companies themselves. Please seek legal counsel before you speak to anyone. It’s always good to get that legal advice before you move on. So Scott, as always, thank you. And, you know, I haven’t stopped jumping up and down soon. I hadn’t seen that report from Sherwood so you can imagine I’ve been getting messages all afternoon. When did you get that report, but you can imagine how excited the people that we’re talking to and med tech with you and Steven how excited going to be about that information. Right. Cool.

Scott Pantel  18:19

Thank you for letting me be a part of this Oscar and keep doing, keep doing the great work that you and your team are doing. Perfect. 

Oscar Jofre  18:25

Alright, everyone, we’ll see you at the next one.