The Secrets to Building Your Community of Investors

Speakers

Oscar Jofre

CEO and Co-Founder

KoreConX

Oscar Jofre

CEO and Co-Founder

Oscar is currently one of the Top 10 Global Thought Leaders in Equity Crowdfunding, a Top 5 Fintech Influencer, Top 10 Blockchain and a Top 50 InsureTech. He has published an eBook that has been downloaded in over 20 countries, and been distributed by partners worldwide. Oscar is a featured speaker on Fintech, regulated, equity crowdfunding, compliance, shareholder management, investor relations, and transparency in the USA, Australia, UK, Germany, France, Netherlands, Canada, Singapore, Indonesia and China. He speaks to audiences covering alternative finance, RegTech, insurance, banking, legal, and crowdfunding. Oscar also advises the world’s leading research, accounting, law firms and insurance companies on the impact Fintech, RegTech, LegalTech, InsurTech and OrgTech is having in their business.

Jonny Price

Director of Fundraising

WeFunder

Jonny Price

Director of Fundraising

Devin Thorpe

Former Candidate for Congress in Utah's 3rd District

Devin Thorpe

Former Candidate for Congress in Utah's 3rd District

"Devin was the 2020 Democratic nominee for Utah’s 3 rd Congressional District, focusing on public health, climate change, poverty and social justice. A bestselling author and new-media journalist, he calls himself a champion of social good. As a Forbes contributor, with over 500 bylines and two million unique readers, he became a recognized name in international development circles. His Your Mark on the World YouTube show and podcast, featuring over 1,200 luminary changemakers—including Bill Gates—gives him a recognizable face as well. He frequently focused episodes of the show on reversing climate change, eradicating extreme poverty and improving global health. The intersection of these issues represents the nexus of his work in international development. As an author, Devin has focused on helping others use money for good, writing about optimizing personal finances to allow for public service, crowdfunding for nonprofits and corporate social responsibility. His writing for Forbes generally looked at addressing problems through social entrepreneurship and impact investing. He has helped nonprofits raise millions of dollars via crowdfunding. He twice hosted a 24-hour livestream via YouTube on #GivingTuesday, featuring dozens of interviews with nonprofit leaders. Having lived on three continents and visited over 40 countries on six continents, Devin brings a global, hands-on perspective to his work. He has been invited to speak to international audiences—including twice at the United Nations. Prior to launching his second career focused on sustainability, Devin had a successful 25-year career in finance where he served as the CFO of the third largest company on the 2009 Inc. 500 list. He also founded and led a FINRA-registered investment bank and as the treasurer of a publicly traded company doing business on five continents. He previously launched and led a residential mortgage company. He earned an MBA from Cornell University after completing a degree in finance at the University of Utah. Today, Devin is a Rotary Club president, serves on several nonprofit boards and, volunteers whenever and wherever he can, with the loving support of his wife, Gail. Their son, Dayton, works in San Francisco as a data scientist."

Jonny Price  00:03

Hello, hello. Hey, how’s it going?

Devin Thorpe  00:06

Great, Johnny, great to see you. Yeah, you too. I think Oscar’s just making this live now. So I think you got here just for the just for us to be live. So I think I think people are watching us now. It’s very exciting.

Jonny Price  00:21

The nick of time, as they say, yes. Yes,

Devin Thorpe  00:24

There is so much good stuff for us to talk about today.

Oscar Jofre  00:28

Oh, we are gonna help a lot. Yeah, we are. Well, good afternoon, everyone. Welcome once again, to the KoreConX KoreSummit webinar series 2021. As always, we have great discussions, and today is one that’s a little different than others, because our guests today are really going to bring a different spin to the whole thing of bringing in a crowd, a community of people, together for a greater good that always isn’t the same objective with just raising capital. And I wanted to put that in, because when I first got started in the crowdfunding space, Devin Thorpe was one of the first people who ever interviewed me, when he had his show. And I waited this long, because well, he’ll tell you his journey. And so I’m excited about today’s topic, because it’s so different than everything we’ve ever done before. And Jonny, I thought you were perfect for this. Because your background, I think you’re going to relate to this. And I, I’m looking forward to the two of you. But first, before we get started, Devin, if you could please introduce everyone, yourself to everyone, we’d really appreciate that.

Devin Thorpe  01:35

Well, let me just start by saying thank you very much, Oscar. It’s a thrill to be here. I’m especially honored to be on with Jonny. I’m really excited to hear what he has to say, because he’s got some, there’s so much exciting stuff going on right now in Jonny’s world that he deserves and will get all the attention. That’s great. I have been advocating for, talking about, writing about, working in, helping nonprofits with crowdfunding for almost a decade. But as an old investment banker, I am especially enthused about crowdfunding, equity crowdfunding, and, you know, I contributed to Forbes wrote hundreds of articles, including many, many articles on crowdfunding, again, oftentimes with the focus on equity crowdfunding, drawing on not only what I was seeing, talking to people like Jonny, but in drawing on my investment banking experience, which is, you know, as Jonny can tell you as a registered firm, it’s sort of like being a light broker dealer. And so as an old broker, dealer guy, I relate to, to the situation, Jonny finds himself in at Wefunder, but I put all that aside last year to run for Congress. I’m not a congressman. So you can infer what happened in that race. And now I’m on to other things, and trying to sort out what my life will be. But it’s great to be back with my crowdfunding friends today. So thanks for having me.

Oscar Jofre  03:12

Great. Great to have you. And Jonny, it’s always great to have you back again. Thank you. Please take a moment to you know, but he put yourself on a pedestal. Can you say anymore?

Jonny Price  03:22

Yeah, thanks so much. Always a pleasure. And yeah, I lead the fundraising team at Wefunder. And so we’re, you know, leading reg CF platform. And my job is to help great startup founders, I guess, learn about Wefunder and regulation, crowdfunding and then decide to raise part of their round or all of their rounds from their fans, and Wefunder investors.

Oscar Jofre  03:49

Well, that’s perfect. Thank you. And look, the conversation today. Obviously, it has everything it’s it’s in a monumental week, right? Everything get any now getting an increase to 5 million on the regulation CF. It’s, it’s interesting how time goes by right then. And you remember the days are just 1 million now we’re talking a five times increase to 5 million on reg cf 75 million to RegA. And this topic cannot be more important than ever, building your community. Right. And I thought I would do bring the two of you together because we’re, you know, we’re bringing it to from two different points of view. And so let’s start with you, Devin, because you wrote a book on this, you? Well, you didn’t just write it. You lived it. And then you applied it when it came to journey [uncertain].

Devin Thorpe  04:43

Yeah. So yeah, I’ve done a ton of crowdfunding over the last several years, including from my congressional campaign. So this is kind of fun. But one of the things that I want to focus on is that Wefunder just launched its own campaign last week, or earlier this week, Jonny, I’m losing track. But you can tell us but it one of the key things that intrigues me is there have been a little bit of changes in the rules around what you can say off the platforms, it’s still pretty limited. But it’s, it is expanded to include a little bit more information. And so I think we have a really rare opportunity to let Jonny tell us what the Wefunder story is, as much as he can, to demonstrate what it is that we can do as we communicate with our communities, because that’s one of the key issues with building community is what we can say to them off the platform to get them on to the platform to look at look at more information.

Jonny Price  05:51

Yeah, the new laws that rolled out on Monday have liberalized your ability to communicate in, for example, demo days off the platform. And you’re, you know, supposed to link back to the platform. And, you know, you definitely not supposed to talk about the terms of the offering off the platform. But yeah, it’s been pretty, I think, obviously, one of the great things about regulation crowdfunding, is that yeah, now you can talk about the offering publicly, you know, everywhere. And so I can, I can talk about Wefunder. And we have our own offering, we’re partnering with Honeycomb credit, which is a reg CF platform based out of Pittsburgh, I’ve known these guys for a couple of years really great guys over there, more fixed on and oftentimes small businesses, but we’re partnering with them to do that Wefunder raise and say, Yeah, you can go to we funded.com/we funder and invest in a reg CF campaign into we fund the minimum investments, 100 bucks, and it’s been a really exciting few days, we launched it on Tuesday. And we’ve raised several million dollars from 1000s of investors at this point. And it’s been so fun, we have an investment Slack channel, where we see all the investments come in. And then all these investors are putting notes on why they invested in Wefunder. And it’s been so fun to just read all those comments and read these reasons why people people are investing, like we believe in your mission to save capitalism, or no, I’m a founder and I raised money on Wefunder and had a great experience. And so now it’s cool to be an investor in the platform. So I was extol the virtues of investment crowdfunding, not just as a great way to raise capital, but also as a way to recruit an army of customers and brand evangelists and ambassadors. And obviously, that’s kind of what we’re talking about here today with building your community. And for me, if there’s like one company, for whom, that will be incredibly valuable. It is Wefunder, right. Like if we can recruit 1000s of investors to invest in Wefunder. And hopefully, you know, if their founders, they’ll choose to raise money, when Wefunder if they’re, you know, angel investors, they’ll choose to, you know, invest money in campaigns, and Wefunder or bring us, you know, founders that they know, who are considering raising money themselves. So yeah, it’s really exciting for us to be eating our own dog food. So say,

Devin Thorpe  08:23

yeah, that that is exciting stuff. And I appreciate you talking both about the offering and about these new rules that kind of expand what you can say. And I think that demo days rule is an especially important rule, you know, because there are all kinds of platforms that are at organization, schools, etc, that are doing demo days kinds of things. And the old rules kind of seem to say you couldn’t do that. And so it’s great to have that clarity that you can.

Oscar Jofre  08:54

No, sorry, I, you know, I, when I hear your voice, Devin, I feel like I need to remind myself, hey, wait a minute. I’m gonna wonder. No, no. So yes, it goes, actually, a lot of our colleagues, by the way at around our ecosystem are investing in Wefunder for to do to go through the journey experience. I mean, a lot of people who have been doing Reg As and Reg Ds traditionally didn’t, but now they’re, it’s amazing what it’s changing. Right. But through that change, I think it’s important that people realize that, that trust they have with their community didn’t come overnight, that that that community, they build in, they’ve earned it, and that’s why they’re successful. Their raise is the way it is, is because of that community building. And that’s the word I I, I feel like that that’s one area that companies need to still understand. I’ve I’ve been talking all lately regarding the fears that I have about the increases and they’re not fears that they’ll The Fraud Act so that he has nothing. That’s not my fear. My fear is that are we going to leave the smaller companies behind because they’re no longer big enough? Because I’ve been, we’ve had a number of platforms talking about this. So I want to give people an opportunity to understand what it takes to build a crowd. And I’m coming back to you on this Devin. And because look what you did you you would never a politician before and I people go politics and capital raising, trust me, they’re both equally the same. Right?

Devin Thorpe  10:31

It’s right. The politics in America is sadly politics is crowdfunding.

Oscar Jofre  10:38

Yeah. So you so you, you went in there. As a newcomer, brand new, you know, you you had a show, you wrote a book. That was a you were a broker dealer, but that being a politician is a totally new and you went in, just like an entrepreneur goes to the journey. And the first thing you started doing was building a committee that I noticed immediately. So how important in building that and what steps did you take? Because I think this applies to everything. Because the success of Wefunder today is based on this, I’m sure but please.

Devin Thorpe  11:10

Yeah. So you know, the I think the fundamental principle, and this always surprises people. And Jonny will demonstrate, you know, I think some great insights about how you grow things huge. But crowdfunding always begins with that inner network, right. So as I launched my, my personal, you know, congressional campaign, as I’ve helped other people with their crowdfunding campaigns, it always starts with your personal network, you got to bring those folks in, if you can’t get a little bit of momentum from the folks close to you, you’ll never expand outside of that network. So there’s a temptation in crowdfunding to start with the crowd thinking that the crowd is somewhere over there. And there is no crowd over there unless you bring in your family and your friends and the people who are close to you. And, and so that’s kind of thing. One thing, too, is trying to get media attention. And that’s a little bit tricky with Reg CF. And I really want to have Jonny talk about that. But one of the things that Wefunder has created that is, I think, maybe still unique but if not unique, it’s uncommon, or new, at least, that is they’ve created this idea of a lead investor, that gets a carry and at the ideas that implicitly or explicitly creates an incentive for a lead investor to join in and also for them to help raise the money. And so I’d love to hear from Jonny, if that’s working, if that’s and how it’s working. And there are also some regulatory questions that come up about that in terms of incentivizing you know, giving someone a financial incentive, that’s not a broker dealer to be helping with the ratio. I’m really curious about how that’s working out. Hope, Jonny, tell us.

Jonny Price  13:06

Yeah, absolutely. I can talk to that. And it is timely, because yeah, we wrote out lead investors about this time last year. So then every company that launches publicly on Wefunder has a lead investor, not putting in a huge amount of money, not like a lead investor, VC, lead investor and series a already got a $2 million check. But you know, average on we funder is 25k, and some lead investors putting in 50, 100k. And there’s kind of two primary roles of the lead investor, I would say the first is help to negotiate the terms of the offering. And so obviously, main focus of this webinar is like building your community, which is super important determinant of success of a reg CF campaign. And but another determinant of success is making sure that the terms of your investment are compelling to investors, right. I think one of the risks that I’ve seen, and I’ve seen this on Wefunder, and over the last few years, as well as other platforms as well is, you know, if if you should be valued at a 5 million valuation cap, let’s say and you go live with a 50 million valuation, then that’s just not in the right ballpark. Right. And so, you know, if any investors do invest, then they’re getting a bad deal. But probably the bigger concern is no one’s going to invest, because that valuation is much, much too high. So partly, one of the roles of the lead investor putting in their own money into the deal and what our CEO was says, unless you’re putting money into the deal, then your opinion on valuation in terms doesn’t really matter. So they’re putting their money into the deal and then negotiating on valuation. And is it priced down under a convertible note? Or is it a rev share deal? So that’s the first roll of the lead investors help set the terms and then the second is around voting for the shares of the individual investors. So again, And I think it’s relatively unusual, maybe unique. But the investors in Wefunder deals actually have protection, so that they can’t, or at least they can be, you know, vote as a bloc, and not less risk of being pushed around by VCs and a follow on round, let’s say. But the the the shares are voted for not by individual investors, which will be a nightmare for the founder to have to collect 1000s of signatures in the event of a full on financing, but the individual investors shares are voted for by the lead investor. So that’s the second role that the lead investor plays. So the founder only needs to collect one signature logistically simpler for them. But individual investors have protection. And to your point, then we had hoped that a lead investor would be able to earn carried interest on the reg CF round. We it’s been made clear by the SEC that that is not possible for the reason that that you mentioned, we were disappointed by that, I would say, because for us, if you can incentivize people to bring high quality deal flow to reg CF platforms, eg three carried interest, then that will bring better deal flow to Wefunder and, you know, ultimately, that will have better ramifications for investors returns. So that had been our hope in in potentially looking at compensating lead investors who with carried interest but at least for now, that’s been made clear by the SEC that we can’t do that. So maybe that will change down the line. But but for now lead investors and not not being financially compensated for playing the role in terms of carried interest. The the, you know, Oscars, we think about expanding the community after we we talk about, you know, the lead investor, and starting with friends and family. You know, one of the things is, as you develop a list, and maybe it’s a list of customers a list of of past investors, one of one of the things I’ve learned that I think is surprising to people, and I’d love to get Jonny’s take on the regulatory guidance around doing this right. But I think you’ve got to get on the phone. And that will surprise people but nothing works, as well as calling someone one on one and saying, hey, I want to tell you a little bit about my deal. I’d like to encourage you to go to the website and check it out. Text me email, Congressman Devin, that speaks of congressman.

Oscar Jofre  17:33

Yeah. But you know, the interesting thing is I look I agree with it. And people would say, Well, hey, wait a minute, but that’s all school. Why am I doing crowdfund if I have to pick up the phone? I think they’re missing the point. But I do agree with that. But I think the bigger picture here is that. I mean, recently, I noticed something I were just chit chatting with a few other lawyers, I said, you know, I noticed something very interesting. The last couple of weeks, I’m starting to get emails from reg CF issuers cold calling me or over email. And, and I’ve been collecting them. And I said, what was interesting about it is that they don’t know me from a hole in the ground. They just know me as Oscar with my email address. And they immediately went right to the, hey, we’re a great company, we’re listed on this platform, click there for our reg CF offering. And it’s, I mean, we’ve gone to that, that that that stage, which is they got to be careful with that. Because, you know, it’s not even an issue of privacy. I don’t care about that part. I’m sorry. I do but I I mean, that’s more of a regular I’m talking about how people will perceive this rather than that part. That’s not building that’s not I don’t think I don’t see that as community building. I see what people like companies like Wefunder are doing, creating a community of people bringing the greater good, I mean, they didn’t do their offering. You know, before they did it, now they have a large enough crowd, they’ve earned the trust, they’re not going to get everybody that’s just the the nature the thing is you need a fairly significant crowd to get you started. And I I believe that we’re we’re almost leaving that behind. I know it’s gonna sound really weird. There are companies now selling crowds. How do you feel about that? I’ve finally met a company that is actually selling crowds. And I say, you got to be kidding me. No, no, no, we’ve grouped them into different subject matters. I’m sorry, I don’t even know what they’re called. I great for crowd funding.

Jonny Price  19:39

Yeah, I mean, I would say I think there’s the balance right? So I totally get where you’re coming from and I agree and 100% agree with Devin said as well right? Like no one like and at the very least, like if you on a spectrum between you’re talking to your mom, right and your sister and your close friends which is the kind of inner concentric circle that Devon’s talking about right? And then you you’re doing kind of like Facebook ads, right? Like, at the very least, the return on your ad spend of spending money on Facebook ads, if you have $0 in your campaign, that’s going to be very, very expensive way for you to raise money, right? Whereas like, if you’ve got momentum from your customers, and your family and friends and LinkedIn connections, and angel investors, and then you spend $1, on Facebook ads, there, the return on that ad investment is going to be way, way higher. So, um, so I 100% agree with what you guys are saying. But on the other hand, I do think there is a role to play in what you might say cold outreach, like oftentimes, I think, if companies are running reg D round, and they’re raising from angel investors, they’re saying, Okay, what an angel investors might be the most interesting for me to connect with in order to fund you know, my company in this round. So that’s one example even in conventional reg D fundraising, but then with within reg CF, you know, like, Chattanooga FC went on the on the TV, right on the local TV, they raised 900 grand, from three and a half 1000. Local Chattanoogaian, and probably a lot of people in Chattanooga, not not known as one of America’s great soccer towns until, until Chattanooga FCs became the Green Bay Packers of the USL. And so you know, maybe people in Chattanooga hadn’t heard of the company, but then they got on the local TV. And in this sense, that is kind of cold outreach, right. So the people that watched the local news in Chattanooga that night didn’t know them. So I think there’s, there’s a balance. And one of the awesome things about reg CF is the ability to market publicly promote, get the word out to people that have never heard of your company before. And the ideal obviously, as with all marketing, right, if you can try to target the right audience with the right message, then, you know, maybe you know, you can sell your product to them in regular marketing, or here, you can sell your investment opportunity to them in investment investing, so I certainly don’t mean to, like, you know, push back at all on what you do if you guys are saying, but I do think one of the benefits of reg CF is you can do but

Oscar Jofre  22:13

Yeah. I’m not opposed to email marketing, because we use it.

Jonny Price  22:18

You know, and social and PR. Right? Like all sorts of marketing. Yeah.

Oscar Jofre  22:23

100%. What I was saying is, well, maybe it can’t, it can’t substitute it can’t, and they should have chose me from the they should have approached me on. Hey, here’s my company, this is what we’re doing. Would you like to learn more about my company first? And then the second email when they seem as abrupt? Not not sorry? Not abrupt? I’m odd. Because I don’t know you didn’t want to me.

Jonny Price  22:48

Oscar, given that we’ve now you know, known each other for years had many, many conversations. Let me tell you about let me tell you about Wefunder’s raise, wefunder.com/wefunder.

Oscar Jofre  23:01

But you know, that’s no thank you. Thank you for that. And I look, I brought this topic back on because not that it disturbed me. But it under the wrong hands, it is disturbing, because they will never understand. Okay, so I go to a group that’s got 100,000 groups for me, or you don’t have to, I’ll build it for you. We’re ready to build great. So now you’ve got 5000 shareholders in your company? What are you going to do? What do you mean? They’re just shareholders? No, no, that’s not what they bought into you. You said it, they bought into the vision, the products that everything in your company, so you have a I believe we got such a great duty to these individuals, because we’ve been given the privilege to allow them to invest as one. But as owners as entrepreneurs, we need to understand how to nourish that relationship beyond the I’m a company, you’re my shareholder, you know, I’ll do quarterly meetings with you. And that’s it. We go that path that we might it will just become pubcos, you know that I come from that world. And David always says it’s destroyed because there’s the little guy doesn’t have a chance.

Devin Thorpe  24:12

One of the one of the things Johnny mentioned in passing that I think is really important is PR and media attention. And you know, Jonny’s offering was just launched a couple of days ago, there was a great article in crowdfund insider about the about the raise highlights the valuation, it’s a nice little valuation, Jonny, congratulation, 160 million.

Jonny Price  24:39

So we’re gonna talk about the terms of the offering. So you get a nice try, Devin, nice try, but I’m not falling into your trap that you’ve laid for me.

Devin Thorpe  24:48

But I think there’s it raises an interesting issue because of the regulations around what you can say on and off the platform. Jonny, I’d like you to give us some guidance about best practices for getting media attention, because I’ve done a lot of crowdfunding campaigns over the years. And the difference between moderate basic success and blow the doors off is media. That’s what happens. It’s it’s the it’s hard to pay for at any price. At the endorsement value you get from having someone in the media talk about your deal in factual or favorable terms. It’s just, it’s really high value. So given that, Jonny, what can you tell us about how to do that, in a best practices compliance sort of way?

Jonny Price  25:40

Yeah, I mean, I, I’m gonna be the contrarian on this on this call, obviously, because I mean, I will say, I might push back a little I on both because I’ve seen, I’ve seen it both ways. I’ve seen companies that have raised, you know, a lot of money. And Wefunder very quickly with no media. And I’ve seen companies that have I there was a company that was in the New York Times for though, we fund a campaign that didn’t really do anything. It wasn’t like front and center. But it was certainly mentioned in the New York Times article, it did very, very little. So. Um, but having said that, I mean, to answer your question. I mean, I, you know, at the end of the day, I think like, it’s about an amazing story. Right. So. And I think it’s maybe almost easier to get that media attention during the campaign, if the campaign is like explosively successful maybe then before it. But you know, if the company is a very, very exciting company, if the founders have a very, very exciting story, if it really makes sense for them to be, you know, doing that themselves. But I think, yeah, I, I’m, I’m not sure that that kind of media attention is necessarily or conventional media attention is necessarily kind of quintessential to, you know, raising even 5 million.

Oscar Jofre  27:15

Yeah. I have somebody here who wants to ask a question. So the one thing about us here is that when we have, because we do have a great, I mean, Jonny has been on the show on webinars before and it somebody would like to ask a question, Henry, you got a question to ask.

Attendee 1  27:34

Oh, hello, my name is Henry. I had a question about what you can and can’t say, you know, off the platform. So you’ve you’ve kind of made it clear that you can’t talk about your terms. But can you just be a bit more specific in terms of what you can do with online or digital advertising? Or print advertising? Or TV, whatever it may be? what can and can’t you say?

Oscar Jofre  27:55

Great question. All right. So Jonny, you’re Jonny’s background is probably getting a little quick. I mean, with REG CF, as Devin was alluding to, up until Monday, there were a lot of restrictions, there still are restrictions on certain things. And television is definitely one of them. That is a again, I just want to make sure, if you’re promoting your company, everything’s ago, you can do TV commercials, you can do ads, you can do videos, and you’ll find it that a really good example for you to see how it’s really done. Well, is when you do you watch companies on Reg A, a good to have you back joining in bright gay, you’ll find it that no company is ever selling the security. And the reason for that is, because what they’re doing is they’re telling their every ad is about telling you about the company. And that is all. Now, for them. They have the same issue that as long as the deal is live, television is still off limits to them. It’s off limits to all of us. That’s just the SEC. But there are other forms. But Johnny, he was asking, I don’t know if you heard the question that was very similar to what Devin had asked what you can and cannot say on on the while you’re on the platform, and excuse me, what forms of types of advertising not advertising. But you know, what can you use social media advertising, television, so on. So I touched on the issue of television. And then of course, just letting them know that you’re not limited to what you can say about the company. But once you start talking about the offering, there are certain terms you can and cannot use, please.

Jonny Price  29:41

Yeah, I think so until the new laws changed. I mean, I think you couldn’t talk technically you couldn’t say anything that wasn’t on the platform off the platform. And if you know if you do like an event, I think we were told by FINRA that You need to record that event and uploading a recording of that event to the campaign page. And then you also needed to link back to the campaign page as well. And so those were rules that were in effect until March 15. And they’ve been liberalized with the demo day point that Devin mentioned. But yeah, beyond that, yeah, I’m not I’m not sure I.

Devin Thorpe  30:37

There isn’t an explicit prohibition on television ads, right?

Oscar Jofre  30:43

No, no, it’s more. So the way the with the way it’s occurring right now is, so there’s a company out in California, right now that does it. And the rule is, you’re allowed to use television to promote the company. And not that you’re raising capital, or anything like that in anywhere. And you can use that to draw, you know, attention to your company, when the deal goes live. That’s what the SEC comes in. The SEC says, and part of that is that, in order for you to do that, the investor needs to have access to the offering document in which on television, it’s not possible. Yes, the new televisions do but the SEC is going by everybody’s television. Not everybody’s got a 4k TV with the built in everything. So until then. Now there are people monkeying around, playing with it, I caution you to please speak to the Wefunder, to your lawyer to get clarity on it, get clarity on the messaging that you’re sending out. Whatever form you’re working with, that’s doing your marketing. There are companies that specialize in this. They’re called investor acquisition. And they’ve done this before they work with the Wefunders, they work with the law firms, they understand what cannot be said and said to protect you. So the good thing where we are today in 2021, is not where Devin and I were in 2012 and 2015, where we were all in a room asking questions. I think it’s going to be like this. Do you remember the answers? Everybody answered the question? We think it’s going to be like this, we think it’s going to be like that we think we think we think what we’re telling you today is we don’t have to think it we do know what you can and cannot do. But it always starts with your so the professionals or their lawyers who do this, the platforms are there, the investor acquisition firms, are there anything outside of that kind of playing with a in a playground? That not to say that they can learn Please don’t misunderstand that. But you are playing in a playground that could be a little bit dangerous for you. So you really need to be because the SEC is monitoring things. Make no mistake. They are monitoring things.

Devin Thorpe  33:07

Yeah, that they’ve sent it set an interesting booby trap for us, I think. And we had to talk about that because it relates directly to building a community. But the the new regs allow for issuers, entrepreneurs, to test the waters in advance of an offering. And so Jonny, this is brand new, you guys didn’t do that. And as I understand the rules, and the the issuer cannot indicate that they intend to use reg CF, they can only say that they intend to raise money at under an exemption from traditional registration. That is they’re not going to go public in the traditional way. You’re interested in raising money? Are you interested in donating, they can put that message out to the community. And that’s quite different from the testing the waters rules for RegA, which sort of required that you say we’re going to use RegA to raise money, maybe let us know if you would be interested in investing and it seemed to be a helpful tool for RegA. Jonny, how do you see this working now with RegCF? I’m curious.

Jonny Price  34:25

Yeah, actually, what you just said that I didn’t know I didn’t know you can explicitly say we’re looking at raising money for REG CF. So and should disclose that, you know, I’m not a lawyer and we you know, Wefunder can’t give legal advice, etc, etc. I mean, I think like in principle, we’re very excited about testing the waters and we think, you know, rather than an issue, you know, going through the rigmarole of getting financial review done and you know, spending weeks to file a Form see before they can Talk about it, you know, enabling them to feel like invested in mind at the outset, I just think there’s going to be better actually on both sides of the spectrum. So for the long tail of, you know, smaller companies raising Oscars point about looking out for the little guy, I think this is a great one for the little guy. Because, you know, you can just kind of try to see if there’s a there there before investing the time and effort to launch a campaign. And so I think that all kind of reduce the risk of failure and like, misspent time and expense on the part of like, a, you know, a small business owner that is resource constrained. But then on the other side of the spectrum, I think, you know, the very fastest, the very best companies, right? Like, if if you’re saying, Well, you can’t raise the money for, you know, six weeks to file a Form C and then 21 days, even if you’ve, if you raise the million dollars on day one of the campaign, then like, it’s 21 days before you can, you know, close on the money, you know, to be kind of two months before, you can write a check, and then you’re not getting into the best deals coming out of [uncertain]. Right. Whereas now, with testing the waters, you know, being able to move a lot more quickly. I think it makes Wefunder lot more competitive. And so you can get into better deals. And again, going back to what I said earlier, for us, like investor returns, I mean, sure, it’s about, you know, kind of getting, you know, good terms for the companies that are on the platform, like negotiating for better deals for investors. And sure, it’s about like, can we then help those companies to do well and grow and is is like raising money from the crowd, actually adding value to them in terms of the capital and the customer space and helping them to grow into big companies. But also, it’s deal flow, right? And if we can’t get the the next Uber the next Airbnb, because because of the power laws and venture returns, and there’s other types of investing, Wefunder other than just like venture investing. But within venture investing, return, there’s a power law to returns right? So Uber and Airbnb return the whole fund. And so if you can’t get into Uber, because that runs super hot, and it’s taking two or three months for them to launch, and so then they don’t go the reg CF route, then, like the biggest power law winners are not going to do reg CF, and that’s bad for investors. And so I think on both sides of the spectrum, we’re really excited about and testing the waters.

Oscar Jofre  37:26

I got William, who’s got a question here. William, please ask a question.

Attendee 2  37:32

Thank you. I think I’m unmuted myself. Can you hear me? Yeah, we

Jonny Price  37:36

can hear Yes,

Attendee 2  37:40

Hi, Johnny better while. Devin, Can I mention? Yeah, connection?

Devin Thorpe  37:47

Yes, please.

Attendee 2  37:48

Devin is on our team. We have we plan to relaunch here in the near future? Here’s my question that I’ve read the inspiring language on that Wefunder charter, which is wonderful fact. I’ve borrowed it from time to time. And in my opinion, and this is a question what percentage of Wefunder the equity crowdfunding? We found her campaign was set aside for the equity crowdfunding investors? Do you know? Or can you say?

Jonny Price  38:27

Um, as in off the we fund a campaign that we’re running right now?

Attendee 2  38:33

Yes.

Jonny Price  38:35

Um, that’s all open to to the crowd. Actually, we haven’t taken any institutional investors or at least maybe there are some institutions in the crowd, but the whole thing’s Open to open to the people.

Attendee 2  38:50

I didn’t mean institutional like, here’s my question was most equity crowdfunding campaigns set aside? 10, 20, maybe 30% of most of their company’s total ownership for the equity crowdfunding investors? Am I in the ballpark?

Jonny Price  39:08

I can’t really get into terms, I’m afraid I just for legal reasons, that that would be kind of implying evaluation in terms so that you can on the on the website, we show the terms of the offering. And so you can you can kind of put together you know, kind of equity percentages.

Attendee 2  39:27

I’m sorry, I was I was segwaying. Away from Wefunder out just saying in general, most equity crowdfunding campaign platforms campaigns set aside 10 to 30% of their total ownership, their total equity for the investors, the equity crowdfunding investors, less than 50% Would that be accurate?

Oscar Jofre  39:52

No, I yeah, I think so.

Devin Thorpe  39:54

I think Bill, I think the answer to your question is yes. more narrowly, I’d say closer to 10-30 in the past, because the raise amounts have been so small, right? If you’re capped at a million bucks, if you’re going to raise half a million or a quarter of a million, you’re not as likely to to give up 20 or 30% of the shares in one single round. So I think it’s been closer to 10 than 30. Typically. Now, that is now that it’s $5 million as a cap, I think we’ll see that rise. Now. Jonny can’t talk about their terms. And I’m certainly not an expert. But the evaluation referenced in the inside crowdfund insider article suggests they’re giving a lot less than 10%. In in the Wefunder round right now, and again, I don’t want to put Johnny in a difficult spot, but I think,

Oscar Jofre  40:55

with the five minutes, but that’s not been fixed,

Devin Thorpe  40:58

but 20% More typical, I think that

Oscar Jofre  41:02

but that’s just saying, because they’re only raising 5 million, right? But if they would have said we’re gonna raise 10 million, it would increase the number, the number of shares, look, any given company. There have been others that are raising, I think what Wefunder is doing is is great I, their community on, I think you guys are a B Corp as well. Right? That’s a big sorry, a big part of it. So I don’t think you can look at it, I at least I’m going to give you my get what I see. It’s not a matter of how much you’re allowing, is this what you need, you need 5 million. So for 5 million, they said, but if you needed 10 million, you would give up more shares, which would be more the crowd. Right? I applaud you for that. Because most platforms, you know, it’s interesting, some of the new ones that I’ve been dealing with. They go Oscar, you know, you know, some private equity or go, I don’t get it. The very essence of this business is the crowd. So why don’t you go to the crowd? Yeah, you know, it’s too early. But wait a minute, I never understand the logic of that, right. And I’m a big, I’m a big advocate of that I am. Jonny already knows, I’m my plan, our plan has been on the works to do a reggae why because, and it’s, and I’m gonna keep doing reggae as until I’m not allowed to do it anymore. Because I see the power of it. They there are companies that really understand what it means to harness the power of the crowd. And I think that’s the one of the thing and I, over time, if the crowd can own 70% of the company, it’s no different than the means that you’ve raised X number of dollars, and you will scale it, you know, just like a VC round. You know, the first one was a 10 million. The next one is that 100 million, the third round. So it’s the same thing. And each time you’re given a certain percentage away of the company. As you keep growing. The only difference is that it’s not one person anymore. There’s some 1000 of you. I mean, isn’t that exciting? 10,000 20,000?

Devin Thorpe  43:05

That’s exactly right. That’s exactly right, Oscar, that’s exactly how it’ll work. And

Oscar Jofre  43:11

and we’re seeing that, Devin, I mean, look what we couldn’t do in 2015. We couldn’t have a discussion about what it may look like hypothetically, but you know, at KoreConX we see, we see it from an anonymous level, we see the impact this is having. We already know that it’s not the millennials that are jumping up and down investing. It’s it’s me and Devin, the parents were the ones investing and guess what we’re doing. We’re then transferring it to our kids who are then flaunting it and saying they own it. That’s I see that every day, being from a back end. I also see that we got unicorns in this sector, nobody recognizes them. Why? Because the market only sees 2% of the companies that are venture backed and what you guys are doing I mean, look, I didn’t want to make this into a Wefunder section. But it’s great. Because seriously, I Jonny, your timing was good. Because you are harnessing the community you brought it in, of all the of all the platforms. This is hopefully is a good example for everybody, regardless of what percentage there’s a valuation, there’s amount of money you need. That’s what it is if you need more money.

Jonny Price  44:32

100% agree with you.

Devin Thorpe  44:35

so of course we funder has an extraordinary position, because it has been aggregating people whose mission it is to expand the net their own investor networks onto their platform. And so most of those people like what they’re doing, like what they see and Wefunder they want to be on the Wefunder email list and so now that email list is a million or two 2 million people long, you know Wefunder isn’t in an extraordinary position for doing crowdfunding. Relatively few young companies have that kind of email list of people who are subscribing and want to invest in your bot

Oscar Jofre  45:18

unless you bought it. So William is back again. He’s got another question, William, you’re on.

Attendee 2  45:24

I’m sorry, I don’t know if I was got from what I was trying to say. It seems like most campaigns use this simply as a fundraising vehicle equity crowdfunding. And it would I had my dear, idealistic self wants to believe that it was created to create this more democratic and equitable business model. And so that’s why I’m hopeful. And our company that we seek to launch wants to make sure that the majority of the ownership of our company is owned by the equity crowdfunding people. We don’t want to use equity crowdfunding to just create to just just as a funding vehicle. If we’re truly going to revolutionize how we fund companies, and how we own companies, this JOBS Act equity crowdfunding legislation is, is wonderful.

Jonny Price  46:21

And I think that’s, that’s awesome. And we’ll be super supportive of that. I do think, yeah, like, if you look at the numbers, the vast vast majority of startups using platforms like Wefunder are using we fund as startups are normally using angels or VCs, I, you know, raise, you know, give away, give up 20%, you know, 10 to 20%, of equity for company each round. And to raise the capital, they need to accelerate growth. So, I think your example is unusual, Bill, but it sounds like a really awesome and noble use cases, these rules.

Attendee 2  47:05

Thank you.

Oscar Jofre  47:05

I think it’s gonna be really interesting. I do agree with everyone, everyone who’s is looking at the regulation in a different way. Look, I’m a Canadian, and I’m all in on the JOBS Act. All in. I’ve been in all in I’m 11 years in probably Devin is probably a little bit longer. I’m immersed deeply. And in fact, I’m so in that I’m now supporting JOBS Act version 4.0 that David Weild is launching called the jump coalition. And I’m going to support it and why because we’re not done yet. We we’ve done a lot of great work. And if we want to keep supporting smaller companies, you know, David always reminds me he says, Oscar, when I got into this when I met David over a decade ago, I will never forget this. I mean, here I am coming from the public markets and hearing a person talking about democratization of capital. And why cuz there’s all this money over here. And there’s all these companies over here. So what the problem was, we were blaming it on the intermediaries. Remember that Devin. Oh, yeah, the broker dealers were outdated, and, okay, they’re not outdated anymore. So what’s the real problem? So the the, the key is that we were just getting great momentum. But one message is always clear. The key to recovery in the situation in the US, that is today, always has been and always will be the small businesses. They’re the growth of the economy, the United States that he made perfectly clear to me, it’s embedded in my head. Dr. alamin della wits is another one of the co founders of data frame, once again, comes from the bank. And the key to the United States is the Small Business Enterprise. That’s what we need to support, we need to create jobs, and it can’t be just throwing money at it anymore. Right. And that’s why it’s, so I commend everybody, the JOBS Act was to balance the balance was allowing people the ability to participate, giving owners back the ownership. So you could feel that you have a responsibility, ownership comes with responsibility, and then to provide in a market that’s free, but with the safety nets to protect, and we’re getting there. That’s the we’re finally that we can say things like that. Now we can, we can say things like there’s a company with almost 400,000 shareholders in a private company 400,000 400,000 They raised over 130 million today. And it excites me every day. Right. And you and I Johnny have another one that’s shooting for 1 million shareholders. 1 million Devin. 1 million could you imagine a million shareholders in your company but they don’t call them shareholder? [uncertain] And so it’s really exciting times in this journey And you’re seeing for all of you that are listening today, you’re seeing the work what community build means. When you see it, not only from the theory of the academic side, this would be good to do to constructive. Just go to Wefunder, forget about they factor their a funding portal. Just watch what they did. Watch what they’re doing, and watch how it’s being repaid by the crowd, because of bringing everyone together. I mean, that’s my Devin. I don’t know if you echo those words, but I’d love to hear your comments on that. Oh, yeah, for

Devin Thorpe  50:33

sure. And, you know, I think there’s no question that global economic recovery requires a focus on on small business, I thought it’s a shame that that Woody Neiss had a brilliant idea that didn’t get captured. And one of the reasons I was excited to be in Congress was to put this idea forward. But he suggested that stimulus money be allocated to matching funds for crowdfunding campaigns. Yes, yes. Yeah, brilliant idea. To accelerate the impact of crowdfunding. I think the frankly, the the $5 million limit will create a similar enthusiasm around this because it makes this whole economy work, right, the business of Wefunder got a lot easier. And all the other platforms too. We keep highlighting we’ve under because Jonny’s here, but it’s, but there are a lot of platforms, and we should acknowledge that. But the the business of being in the the crowdfunding, platform space is a lot easier on March 18, than it was on March 15. And that’s exciting. That is really exciting. It’s good for small business, it’s good for America, it’s good for the world, because a lot of people around the world are and will emulate what we’re doing here. Thank you. Very nice. It’s working.

Oscar Jofre  51:57

Exactly. Thank you. And that’s one of the interesting things about the JOBS Act that a lot of people don’t know is that it became the this kind of let’s call it a tsunami because it was great. Every country around the world side calming that going. We got to open it up. We got to open it up. And so Sherwood, Jason best Do you remember it? Douglas Allen off everybody. We’re all going from country to country to country and country. And they were educating the regulator’s Well, we’re educating the ecosystems and look where we are today. So it is exciting. And you are right, if it wasn’t for the first frontiers, their first evangelist, the Wefunders, the Republic, start engine, seed invest, micro ventures, and many, many others, next seed. I know a lot of them didn’t make it, though, for different reasons. But we are so excited. And obviously we welcome the new ones, because the 32 million privately held companies in the United States have a path now that it’s proven track record, that if you do it a certain way, and you follow the steps, the success is there. So Johnny, I’ll leave the last words to you. Because I mean, today’s Wefunder day.

Jonny Price  53:12

Well, yeah, I mean, I I’m just really excited about the future of this space, you know, these new laws, the 5 million cap and testing the waters, the SPVs, which I don’t think we even had a chance to talk about I just think like, you know, we fund has been growing about 5x Over the last year. We’re 5x bigger than we were this time last year. And you know, that’s only going to accelerate now with these rule changes. So I think it’s really exciting times reg CF, you know, over the last five years has been a drop in the ocean of reg D 506. B funding has been very, very small. And you know, the best companies have not been using reg CF some notable exceptions, but that I think now is about to change. So I was on clubhouse on Monday on the day that the laws change. And there was a guy who came in and joined it was about 1am for him. He had this amazing Liverpudlian accent scouse accent, and he worked for Crowdcube which is the biggest investment crowdfunding platform in the UK. And he was saying that investment crowdfunding has become the dominant way of funding if you’re an early stage startup in the UK, and that, you know, I asked him the biggest lesson of the journey over the years. A crock even he said that, you know, initially the thought was that is about the money. And over time it emerged that no what was really the game changer for companies raising, like Monzo curve, you know, go Henry, revolute, BrewDog you know, these big big names that raised through through investment crowdfunding, and it’s like the brand ambassadors and the Evangelists it’s the marketing the customers and that for me it’s like if we can deliver on that for founders that are raising through through reg CF and reggae as well and to your point Oscar, you know, larger sums, more investors If we can deliver on that, then you know, not only will that solve the deal flow problem question get all the best companies will just be a no brainer for them to use reg CF alongside conventional investors, right, like angels and VCs. But also then that will help those companies that do raise through reg CF to grow into bigger and better companies that then delivers returns to the retail investors that funded them in the first place. And that is really when it starts to, firstly grow and take off, but also generate the returns for investors that we all want to see and are working towards. So I think the future is very, very bright for all of us, working in the sector. And it’s been a just exhausting, frenetic, but ultimately, really, really exciting and fulfilling week.

Oscar Jofre  55:57

Yeah, it definitely was. And to close up the week, the one part that I’m going to drop today for everyone is that for the JOBS act, we now have for the very first time, what we call the true end to end, where we can offer the shareholders the ability to offer them, and monetize their investment. Because we finally have a secondary market that can trade turn dollars, that is a game changer in the market that will fundamentally change. They’re only supporting Reg, CF, RegA and REG, these individual investors. And I know the funding portals are very excited to be partnering with this secondary market. This is a this is a way again, the success of the company obviously if you if you want to stay there for the whole journey, and and but if you need to monetize your investment, and there’s a vehicle now, they’re not that we didn’t have the vehicle before now the vehicle exists, see every everything every time we keep adding more to this, and it just adds another thing that Wow, another reason why we’re all getting excited, Devin, I I’m so excited to see you. I I know we started talking about your run at Congress, I hope like everybody else, you get back on it and you do it again. There’s I think it’s a it was a great journey watching you build your own community. Online. I watched you through Facebook. That’s where I did it. And I supported you as much as I can. In sharing your story. It was wonderful to see that. And that’s why I asked him to I was really excited because if anybody ever watched politics, it we see one party and I’m not really talking but this was grassroots watching you in your yellow car. Yeah, I literally V. Cruiser was beautiful. You’re at the gas station, you’re and that made it real. You know what I mean? And this is a lesson for all entrepreneurs make it real, make your story real. Real is a perfect way. So thank you for being here today. I look forward to having you and participating in this and looking back again, because I’m sure a year from now. It’ll be amazing what we’ve all accomplished. And thank you everyone today for joining us at the KoreSummit webinar series 2021. We still have just over 30 webinars left. We’re going to be busy. There’s a lot of education to be done. There’s still so many different parts to keep you updated a lot of moving pieces, but till then thank you to Devin and Johnny till next time. We’ll see you guys soon. Take care

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