Oscar Jofre  00:24

All right, then Well, good afternoon, everyone. And once again, welcome to KoreConX KoreSummit webinar series 2021. My name is Oscar Jofre. And I’ll leave it at that, once again, they were excited. Obviously, we are only 11 days away from one of the most wonderful periods of obviously 2021, where regulation CF, you’ll be able to raise up to $5 million regulation A $75 million. Everyone’s pretty excited. Lots of great things happening today, we’re gonna have a great discussion around all this. And I am joined by some panels that you have seen here before, you know, our format. We’re here to chit chat, argue, [uncertain], of course along the way. And hopefully, you’ll get something out of it that will be educational. So first of all, let’s start with our new guests that we haven’t had you here before. Brian, please introduce yourself.

Brian Belley  01:22

Yeah, thank you, Oscar, it’s great to be here. My name is Brian Belley. And I founded crowdrise.org, which has primarily been focused on helping investors in the equity, crowdfunding space, learn everything they need to know to get started, as well as helping the issuer side. So I also sit on the board of the Crowdfunding Professional Association, and my background’s a little interesting because I actually came not from a finance, not from a startup, you know, basically, completely outside of this industry. My formal background and training were as an aerospace engineer, but you know, I was always interested in investing in alternatives. And so when the JOBS Act, you know, kind of went live finally, in 2016, as a non accredited investor at the time, I was very interested in learning about that, and figuring out, you know, what is this ability to be able to invest in early-stage companies, and kind of when I got started, you know, basically was kind of frustrated because there wasn’t a lot of educational material at the time. And, you know, the industry has been coming a long way in recent years. And, you know, Oscar and KoreConX are doing amazing things on the educational and putting on content and webinars like this. So kudos to you guys. But basically, where I’m at today is, you know, looking at it from the investor side of things. I’m an investor in over 130 reg CF companies, as well as a number of reg A and a few kind of sprinkled reg D deals. So have looked at just, you know, tons of pitch decks have been very involved in the space and continue to put out, you know, educational content myself through CrowdWise. So it’s great to be here. Thank you, Oscar.

Oscar Jofre  02:57

You like [uncertain], you never saw that coming?

Andrew Corn  03:03

Yeah, Brian is invested in 130 deals.

Oscar Jofre  03:06

There you go. There you go. This is, uh, this is the dynamic. And you should leave with that, Brian, because I think people need to, we need more people. We need to hear from people like yourself, and But please, Andrew, before we get started.

Andrew Corn  03:18

Well, it’s funny that I’ve invested in a bunch of deals in the last month or so testing the processes. But when I hit the invest button, I have the intention of going through and investing. So if I go on a platform, I have to find a deal I actually like, even if I’m only gonna throw in 100 bucks, I don’t want to just like completely throw it away. So essentially, critiquing the technology is my initial purpose of going but I have found some decent deals. So I am happy about that. Now I generally find really good deals. And the deals that I believe are really good are deals that my firm is working on. So there’s a definite prejudice there. We look for deals that we believe are not fundable, but we’ll raise 100% of the money, whether it’s 75 million in reg A plus, or 5 million, the reg CF. So I’m Andrew Corn like it says on the screen. I am the CEO and founder of E5A, we are a systematic data-driven investor acquisition firm. It is our job essentially to bring not eyeballs to the offering page for people to then assess a company, but the right eyeballs to that offering page. So we actually have a ton of data on affinity groups. And we have internally our own database of about a million angel investors. So when you hear angels it’s like, oh, so they’re all accredited. It’s like yeah, I’m an angel, I’m a fairly active angel in the New York City area primarily in FinTech. And I’m actually a qualified investor. So none of that, though, prevents me from going into a CF or an A plus, which I enjoy doing. And the beauty of the CF and the A plus is that I don’t have to prove it, I don’t have to go through a lot of paperwork. It’s a really easy onboarding process. So that’s something I’m really enjoying.

Brian Belley  05:33

Can I just kind of add one thing to what Andrew was saying, I think that’s one of the amazing things with CF and A plus now is, you know, while I say I’ve invested in, you know, 130 plus deals, that doesn’t mean I’m investing at the level, you know, that a traditional Angel would be writing a 25k, a 50k, check, right? It’s a lot easier to get in to get, you know, a little bit of skin in the game before you kind of get comfortable. And you want to start writing if you want to start writing bigger checks, but if not, it’s a great way to diversify. And, you know, as we know, with early-stage investing, diversification is key because you know, the types of power-law returns that early-stage companies will have. So I think it’s, it’s really interesting, what it’s unlocking.

Andrew Corn  06:11

I agree. And actually, because of the pandemic, I asked my wife, I had to find the right words there, asked my wife to look over my shoulder so I could show her the folder where all of our private investments are. And they range from, I made one for $100 yesterday, to, you know, six digits. So it all depends upon what the opportunity is, and what makes sense at the time, but diversification and the ability to go into multiple deals. It’s one of the beauties of why reg CF works for everybody. There we go, Oscar.

Oscar Jofre  06:53

I do hope it does. And I believe it does.

Andrew Corn  06:56

Well, I almost hit the other side on it a couple of times today.

Oscar Jofre  06:59

Yeah, of course, we will, obviously. So first of all, I think it’s important for, you know, regulation CF is getting a lot of conversation right now. I mean, this morning, I was doing one in Europe, the equity crowdfunding over there. And it is amazing how we still have a misguided view of how these regulations work. And I just want to touch on that a little bit, because I think it’s important that we touch on that. So the audience listening can understand the benefits of it. That it’s not a wild wild west, it does have a regulatory regime to it, which is really important that companies need to go through. Andrew, you’ve had now a few companies, you didn’t work with reg CF before, and now you have and you know, what they need to go through. So if you could just touch on a little bit of that, because it ties into the benefits to everybody else when the investment side.

Andrew Corn  07:58

Yeah. So you know, reg CF is a much simpler process than reg A Plus. The auditing requirements are less, the legal requirements are less, there’s no back and forth with the SEC. But if you are going to do a reg CF through one of our favorite platforms, you’re probably going to go through a due diligence process, and it’s going to be way more rigorous than you were expecting. And that actually is a good thing. If you do that in order to earn that badge of honor. And potentially soon t-shirt because my firm is putting together some t-shirts on this. I have to embarrass the law firm, right? So you know, if you go through that due diligence, and you get listed, it’s not just like anyone with any business can just say, gee, I’m going to go and raise $5 million on a reg CF platform. Now let’s start with you have to be on a platform, you can’t just go to a broker-dealer or just go on your own webpage and say, I’m going to do a reg CF file some documents, there’s a bunch of things that one needs to do, there are now upwards probably of 100 of these platforms. Maybe it’s only in the 80s. Oscar probably has a better feel for that. But I know that there are actually platforms that are doing the CF right now. So people are raising money to have their own CF platform. So there’s a lot going on. And there I believe is a lot of confusion of what it takes, what the criteria are, and what it will take to really have a successful raise. And should you know, then there’s the question, should I raise $5 million? Because that’s the limit, or should I be raising two and a half, and why? And you know, what’s the right number for me and thankfully, I’ve learned only this week about Brian and I read his website and was impressed. So thankfully, there’s a bunch of education out there.

Oscar Jofre  10:04

Yeah, it’s great. I mean, he, unlike many investors out there, he took the other initiative, he figured that as he’s going through his journey and what we’ll get him to speak of it, but and he started creating Crowd Wise, I believe that’s the name of his platform. But I think it’s important, you touched on it, a company needs to go through a due diligence. So it’s taken that, not taken it away. It’s taking that extra notch that you don’t need to deal with, to say then what are the benefits. It’s that you can now look at an offering knowing that it is through a registered funding portal, meaning that FINRA, you know, went through the qualifications, and all that to be able to place the offer. And so when you, Brian, landed there, you only need to look at the merits of the opportunity. Well, I mean, I’m really curious, on your first investment, did you know that? I mean, did that even crossed your mind where you just said, I like that, and I’m putting the $100 in without knowing,

Brian Belley  11:08

You know, it definitely was a learning process. And there was a bit of a learning curve to it. Because even depending on each of the different portals out there, they all have different approaches, right, in terms of how much due diligence they might do, or whether they’re curating deals or not. I think as an investor, one of the most important things is really identifying what your investment goals are. Because going back to your point, Oscar, some of my first investments were investments I was making, because I was excited about the idea, the product, I wanted to be a part of it, you know, while still trying to figure out what is a good versus maybe not as much of an ideal, you know, investment opportunity from a pure ROI perspective. So people invest for a whole bunch of different reasons, right. And I think, again, that’s one of the reasons why reg CF and, you know, reg A as well unlock so many different opportunities, because there’s going to be the investors who are looking for that, you know, financial diversification for potential ROI, you know, perhaps investing in higher potential growth companies. But there’s people who want to invest in their friends, there’s people who want to invest in causes and ideas and businesses that they believe in, and reg CF unlocks and makes all of that available. So, you know, going back to your original question, I think it was a mix of reasons when I was really starting out investing, and even now, on a deal by deal basis, you know, it does vary in terms of when I’m assessing an opportunity, am I investing in this purely because I think there’s a lot of, you know, upside business potential, and everyone likes to make money, right? We don’t want to invest in something that’s, you know, gonna kind of go broke or not do well. But at the same time, there are just a lot of those other reasons to invest. So it’s really important to understand that on both sides as both the investor and the issuer.

Oscar Jofre  12:49

You know, I’m curious about something, what I didn’t here, and I’m curious, from your point of view, is that I didn’t hear you were looking at the opportunity to you, did you think in the back of your mind in the early days, is this a platform I can trust? Or was it really the issuer? Like, which were where was it drawn to where and now compare that to where you are today? Because I’m curious, I mean, look, to talk about the benefits, you got to be in it. And, you know, Andrew said it, but he’s doing it for a different reason. He’s testing, you know, investment processes at a cost at $100 each. Come and test mine, please. So I’m really interested to hear your point of view on that. Brian?

Brian Belley  13:35

Yeah. So, you know, I think the the answer is, for me, personally, I wanted to invest to diversify my portfolio to expose it to kind of a different asset class, and that might hold, you know, through public market stocks, bonds, real estate, that type of thing. So I really took on a lot of that burden of the due diligence and wanting to make sure and verify that a certain opportunity was up to a level of standards. And again, starting out, I didn’t know, you know, which of these portals and platforms had the different processes in place. So I really was kind of just looking at it a on a deal by deal basis and trying to assess, you know, do I think this is a good investment opportunity. Now, having, you know, the bare minimum checks, they’re kind of required through reg CF, you know, kind of the bad actor checks and anti fraud, that type of thing. It was good to know that I didn’t have to go and pour through different volumes of you know, their legal paperwork and look at their incorporation documents and a whole bunch of other things. But what I really was then able to focus on was what’s the business opportunity here? What’s the investment opportunity? I think, you know, one of the other unique things that reg CF especially unlocks if you think of just comparing reg CF versus maybe you know, a private placement or something done under reg D is that you have this crowdsource due diligence available to you now, I think these Q and A’s with the founder that are available on the funding portals is such a crucial part of you know, every campaign page because instead of having perhaps, you know, a handful of angels who were investing a deal and probably doing, you know, kind of their own due diligence to figure out if they want to invest, you know, have hundreds, if not 1000s, you know, of potential investors from all walks of life you got, you know, people who, perhaps from the industry, people who are users of the product, people who you know, are coming at it from different perspectives, and just being able to see all the questions that they asked the founder that has added to my knowledge, and that is something that’s really been important when I assess a deal for sure.

Andrew Corn  15:27

I want to take the other side of that. So I have been on the three four big portals, and I have used them all. And I’m kind of appalled by the whole process. I’m like, so let’s take a step back. I started my career writing IPO roadshows for major investment banks, that was my first job. You know, I’ve run an RIA, I’ve designed exchange traded funds, and I’ve managed billions of dollars as a portfolio manager. So I have a whole different perspective on due diligence, etc. And one of the things that happens is on these portals, there’s not a lot of diligence done. And, you know, nefarious, people could easily put stuff up and get through some of these portals. So my company doesn’t really want to work with any of those portals. And for a variety of reasons, a lot of it has to do with technology, that won’t work with outside marketing as well. But when you go through a portal, that’s actually run by a broker dealer, then the broker dealer is all of a sudden responsible for all sorts of background checks way beyond what the portals are doing. So when I go and I see one of the big advertised portals, and I see a company there, I’m assuming, hey, you know, that’s a seal of approval, but is it? You know, a lot of them, they are bringing your own investors and until you hit a certain level of money coming in, we’re not going to help you bring get any investors. And I think that’s not the best business model, I think they should be helping companies to get investors, that’s what they came there for. So there’s a lot of things I don’t like about the portals. And you know, there are some anti portals out there, meaning where a CF can list on its own. And as long as it’s hosted by the broker dealer, and the broker dealer is certified to do CF, A Plus, etc. And then they’re going to go through due diligence that I think a now I don’t have to worry about it. And I can just look at the investment thesis and the management and traction. And also believe the numbers, you know, without having to worry about was anything fudged. Because the books are only reviewed, they’re not actually audited in the CF. So some of those things are pluses as well. I mean, don’t get me wrong, I think it’s great that you can get a CF launched way faster, and it costs less. And all those things should be true, because odds are, you’re raising way less money. But I do have my concerns. We will be launching four $5 million CFs on around the 15th of March. But these are companies that have gone through extraordinary scrutiny by a broker dealer and others doing due diligence.

Oscar Jofre  18:29

I wonder, yeah, that’s an interesting point in that, you know, the whole idea of the funding portal, a lot of people think that it was to be kind of the gatekeeper, or the due diligence portion. In actuality, if people actually understand the funding portal is not allowed to do that. So in many ways, the only part that they’re, they’re required to do is, I don’t even want to call it KYC. But to make sure that Brian is adequately enough to invest in the company and hasn’t exceeded his limit. And I wonder, now, as you say, we’re increasing this to 5 million, this is real money. Now, not that 1 million wasn’t, please don’t misunderstand that. And now, the broker dealers are getting involved, and they’re gonna do that because they don’t get a pass. Like, I’ve learned a lot this weekend, when the broker dealer wants a funding portal/ Oh, yeah, you know, I’m just gonna operate like, you know, WeFunder and Republic. No, no, no, you are a broker dealer. You don’t get a pass on due diligence, you don’t get a pass on KYC, ID and AML. So in one part, it’s going to be better for the investor because it’s going to provide that additional due diligence and I wonder if the platforms are going to recognize that otherwise they’re going to be only getting the deals that do up to a million and then the deals that are doing up to 5 million, they take on a greater risk. I’m wondering about that, obviously, this is to benefit everyone. And the important thing is the market is opening. I mean, this is the bigger part is. So let me ask you that, Brian. I mean, look, this is an interesting scenario, you are actively involved, you’re an investor. That’s how you and I met. And so for you, it the attraction to the company, if it was all on its own, like a reg, reg, airy, so try to imagine a reg CF now, like a reg A, and you know, there’s a broker dealer in the background, there’s your level of confidence to invest, make it better, does it give you that extra confidence, and I’m just looking at the merits to what Andrew was saying, or is, is the platform, the height, the activity, that’s the part that you need to be part of?

Brian Belley  20:50

Yeah, it definitely, you know, having a broker dealer or some more rigor behind the deal, first, sure, remove some of that, you know, potential concern and the potential additional due diligence that an individual investor would have to do on their own. There are, you know, a lot of kind of different resources out there for people in potential investors as well, right, from kind of investment newsletters, where they might kind of help with some of this or different, you know, reading services that are just additional resources and tools. Again, nothing should be, you know, making a specific recommendation for a specific investor, because they can’t do that. But what they can do is, you know, provide additional ways of scaling some of the due diligence, let me give an example, right, again, going back to if we’re thinking about like a private market investing example, if you’re writing a bigger check, you probably expect slash demand require an in person meeting, or in today’s world of COVID, at least, you know, maybe a zoom interview, right, but you’re probably gonna want to meet with that founder, talk with them one on one kind of get to know them before you make an investment decision. Unfortunately, you know, for the most part, something like that isn’t possible when you’re doing a reg CF deal. It’s just not, you know, reasonable to expect that a founder would be able to meet with hundreds of potential investors. So how do you kind of get that same, you know, assessment of like, without being able to see this founder, like, talk with them? How do you kind of be able to assess them as a person when so many angel investors will say, team, you know, that’s one of the most important things. So I think that there are some of these resources now, where, for example, you know, if someone happened to do an interview, and as part of like a an investment recommendation, or you know, kind of a newsletter service, you can have one kind of interview with that person, and then perhaps publish it to the audience, and it allows it to scale a little bit more, right. So I think there’s kind of ways around some of these, you know, due diligence, common pitfalls, or just differences in reg CF. But another important thing you said that I want to touch on Oscar, too, is yes, you know, when when this cap goes up to 5 million, we’re probably going to be getting increased additional scrutiny right on this because kind of up to a million, you know, it’s, it’s a good, it’s a good chunk of change, but now that we’re going up to 5 million, that’s some real money. And you know, we’re going to be attracting a lot more potential people who will want to leverage that from the issuer side. And, of course, whenever there’s kind of any, you know, money in the market and stuff to be gained, there are potential bad actors who might be kind of around that. So how do we prevent against that? And you know, not to kind of like use a trite saying, but you know, from Spider Man is, with great power comes great responsibility, right? We’re gonna have to go into Oscar, I think you guys say this, but we’re gonna have to level up as an industry. And in terms of how we’re looking at companies, the investors are going to have to level up as well, because, you know, the stakes are going to be raised. So you just got to kind of add that due diligence to your process, I think.

Oscar Jofre  23:31

Yeah, it’s, I think it’s a big. I mean, I don’t think people realize it, but there’s even classes they say, once you reach a million dollars, that’s one, but to go to 5 million, it’s not the same. And you know, it’s funny, I was actually reading a book about this, just to remind again, that even in sales, I mean, in revenue when they tell you’re scaling your company, these are different. It takes a very different approach, though. You’re right, I believe we all need to level up, you know, Andrew and I and the ecosystem that we have created for not only regulation C, Regulation A, it’s now including regulation c up we believe it’s equally the same. That’s one competence that I see from the outset, is that the broker dealers are going to be adopting the same style of investment process to the investors they do in reg A. I think that’s exciting. To me, it gives a kind of standard, which means that for people like yourself, Brian, who a I invested in reg CF, like I know, and then reg A well, equally the same to ask me the same information, except that in reg CF, there’s a calculation there regarding my limits, but in reg A, as you know, you can keep investing in investing. It’s not a problem. And so I’m pretty confident but I agree. I think it’s a great benefit for everyone involved as investors And customers of companies to be part of this. The reason I started this way is because I want people to based on the conversations I’ve been having lately, it seems like we’re all so happy over here, we’re forgetting to tell people what it took for them to get to here. And, and that’s not to say that this isn’t a benefit, why everyone benefits when it does, you’re benefiting from all of these parties that are getting involved, and to allow you to freely invest. So I, you know, it’s interesting to me, to be honest with you, because, you know, since I’ve been involved in this 11 years, five years ago, it six years now, when reg CF finally got launched, or in a way it going. A lot of people dismissed it, you know, they a lot of BD said, This is not for me, it’s not my cup of tea. It’s kiddie land. And now they’re dropping down boy.

Andrew Corn  26:01

It’s, it’s very true. And I will admit that on frothing, we actually have an issue or we’re doing the CF and an A plus, will launch weeks later, because it’s a backdoor way of raising 80 million, you know, the five and the 75. So, if you have a truly qualified issuer, and they could really put all 80 million to work, then actually, it’s a great way of doing it. And for this particular issue, where it’s just test, if it works they’ll raise at every year or more when they raise the limit. But I want to go back to one thing that Brian said is that there’s a bunch of third parties out there that are assessing deals. And I would love the investors who are watching this to be very careful and find out what the relationship between the issuer and the newsletter is, is it a pay to play? Did they pay them to write about it? You know, how independent are they? What’s their background? Like? You know,

Oscar Jofre  27:04

are they using the First Amendment? Are they actually qualified?

Andrew Corn  27:07

Yeah, you know, there’s a website in public equities called Seeking Alpha. And I’ve got about 190 posts there. But none of them in the last 10 years, I used to post all the time when I was a full time, money manager and ETF designer. And I remember one time, they didn’t instantly post what I wrote. And I emailed them, and they said, we’ll we’re reviewing it to make sure I forgot whatever it was. And I said, I manage billions of dollars, the average person here manages four or $5 million from their basement, like people may want to know what I had to say about it being that we might move the market on this particular stock. So know who the author is and where they’re coming from. So I want to flip that though, because there’s a company out there called estimize, that does estimates of things like earnings estimates. And they’ll have some kid doing it from his basement who doesn’t even have an undergrad degree. But maybe it’s aerospace and his dad’s an aerospace engineer, and he is going to be an aerospace engineer, and knows everything about the industry inside and out and actually has great insight. So the size of something isn’t necessarily it’s the expertise is what you should be looking at. And then of course, what the motives are, are they aligned with you as an investor? Are they aligned with the issuer? So anyway, then I want to get to the 5 million Yeah, firms like mine completely ignored. Reg CF, at a million dollars, it was a great way for people who don’t have friends and family have means to be able to do a friends and family round, kind of like a big seed round, and maybe you’d only raise three 500,000. And that’s great. more power to you. I was thrilled about it like that. But not something you’d hire a firm like mine for because your cost of capital will be too high. At 5 million. Now we’re at a place where it can really make some sense. But as Brian said, you know, with this comes great responsibility, which is why we say no to more deals than we say yes to, even though they’re hiring us. You know, we believe most of the time when we accept the deal that they’re going to raise all the money. So we want to make sure what’s the path to liquidity and what will investors truly get and is it a deal that is something that will make the industry proud that it’s been funded, and I don’t care if they make organic vegan soup, or something in aerospace which we happen to be involved in one but it’s an A plus, not a CF. You know, to essentially ways of investing in what would be a venture capital fund, which has access to that, unless you’re a qualified investor or an institution, which you can now do for $1,000. So Oh, and it can be all ESG, as well. So, you know, these types of niche investments and what it’s being open to, it’s all great. But then one last thing, also investor beware, someone may have a great idea and understand what the trends are right now, doesn’t mean they can execute. So you need to really look at that team and make sure that there’s an org chart, and there’s a person for every box, and they’re all capable of doing those jobs. So, you know, most early stage companies fail. But what I love about the 5 million is that 1,000,001 of the things for me as an investor was, you’re not raising enough money to make it to a milestone, you’re going to be raising money again, too soon, it can be a full time job. So that 5 million, or even 2 million, or 3 million, whatever the right number is, you can fund and be part of funding the company where they can really get to the next plateau. One more point, and then I will turn it back is companies will come to us that we’re going to do an A plus. And we say, take a deep breath, your pre money valuation is going to be 15 million, you can’t justify more than that. So they’re not super early stage, right. But there are 15 million, you don’t want to go raise 25 and sell well north of 50% of your company on this one offering. So we now are advising to do a $5 million a plus. Now your pre tax, your pre raise money was 15, your post is 20, right? Because we just raised five, go and build your business more and make it so your valuation is 50. And then let’s go do a $75 million reg A plus, or whatever the number is that you need. And maybe it’s not 50 it goes to but hit milestones and raise your valuation. So it can really, really work there.

Oscar Jofre  32:21

That’s great, guys. I mean, it, it does give this that language, everything is going to change, I believe the value proposition is greatly gone to the more companies, we go through both the funding portals more funding portals arriving, and we’re going to see some more data coming out of it. But I think I agree with you. And we’re still in the early stages, we need to be very careful as to when you read a report aggregation of information that’s already there, you haven’t touched it that step when I’m all for that, because that’s all that is, is aggregation. You know, making it easier, like crowd tide brings everything into one site, they don’t provide an opinion. It’s just a link back to their platform. So it makes it an easy landing spot for an investor to go to. And we’ve been talking about research at the door with a couple of providers already in the space. And it’ll be interesting to see. We don’t know yet we know already. And reg A the consequence, we already know that we already felt that immediately. So the question will be how this will be utilized on the reg CF because we do see it there. And when we have very naive young intrapreneurs on one side, who could get on it and be at home. So it’s a benefit to everyone in this regulation. But there’s still a lot of areas we’re all working through in the kinks. And those kinks are getting better and better. I mean, 3600 companies have gone through this already. So it’s a testament that it’s just getting better and better. I mean, I look back in 2015 or 2012, when people were first designing the platforms, then nothing close to where they are today. So it just goes to show you momentum creates change and change is good. And because we’re constantly assessing the market, so let’s change the dialogue a bit now. Because we’ve been we talked a lot about what it takes in the values, but obviously, the conversation is around the benefits, right? Who will not so much a benefit who all benefits. It’s not just Brian. Right. So Brian, I mean, you benefited from an investor. But there are other benefits to using regulations. Yep. Beyond that, and if you could share some of those comments as well.

Brian Belley  34:46

Yeah, so I mean, I’ll just add on a few other benefits from the investor perspective, but then yeah, we can easily talk about the benefits to the issuers and those raising capital and the benefits to society and, you know, from having all this additional innovation that we didn’t have before But so go back to the investors, right? There’s, in addition to the capital investment, you know, some of these companies offer some perks. So perhaps, you know, it doesn’t always have to be a high-growth startup to you know, who’s looking to be venture-backed in the future. Some of these deals, maybe rev share deals, where it might be, you know, a microbrewery down the street, that they want to turn their patrons and their customers into investors. And maybe you get a discount. So you know, there’s kind of, sometimes there’s going back to the reason, there are so many different reasons why someone can invest, right, it’s not just always a purely financial ROI, do I think this company is going to have a liquidity event or an exit, you know, down the road. Now, in addition to that, too, you can think from an investor perspective, being a part of some of these companies can be a great way to network and you know, kind of improve your business acumen, right. So let’s say I have an interest in, I’m an aerospace engineer, but maybe I’m going to invest in a neuroscience company that, you know, maybe I didn’t know much about before, but by being a part of that team, as an investor, you know, getting the updates, I’ll be learning more about the product about the industry. And it’s a great way to really kind of what we were saying before, just get a small amount for a small amount of skin in the game, you know, $100 $500 $1,000, whatever it is, you can really kind of help you focus your attention and improve your business, your networking is different things in different areas. Now, so you know, kind of talking to the investor side, there’s obviously a whole bunch of benefits the investors, the issuers have just so much to benefit from reg CF and reg A plus, right, so we always throw around the term kind of democratization of capital, right, and access to capital, it’s, it’s unlocking, you know, new sources of capital from non accredited investors that either wasn’t possible before, or may have been possible, you know, through some different regulations, but really was more the exception than the norm. So it really just makes it more mainstream accessible, I will say, Now, think about what that means long term, right. So these invest these issuers, excuse me, are not just getting capital, you’re getting brand ambassadors, you’re getting brand champions, you’re getting people who are going to be helping you kind of get some of that early traction, a lot of them will be your customers or a lot of them will be people who invest in you. But what is bigger, you know, basically, investor what’s like a more positive sign than having someone say, I’m going to invest in this company, because I believe in what you’re doing because I believe in the long term potential, you know, that’s more than just a transactional, I’m gonna buy your product, this is saying, I believe in you, I believe in your idea. And like that, itself is a great source of traction for issuers. And you know, they can not take advantage of that. But they can leverage this in a whole bunch of different ways. I’ve seen many of my investments, reach out to their investor bases and say, Hey, listen, we need an introduction to sell. And so we need, you know, what do you think of this idea? What do you think of this new feature, so you can use them almost as a crowdsourced specific source of feedback for your product for your business, for a whole bunch of different things? So tons and tons of benefits, obviously, for issuers, you know, I think I could continue going on but to just take it one level past the issuers. Now let’s talk about the potential benefits to society. So we’ve all you know, seen the different statistics about VC backed companies, and whatever, whether it’s 97%, white male, or the different stats, right? What this does, by kind of opening up, basically, the kind of private capital markets and the ability to invest in some of these early-stage companies, is the few people, these venture capitalists, which have, you know, very good impact on a lot of areas. And there’s, I don’t have anything against venture capitalists. But these unconscious biases come into play. So instead of having a small group of people who are kind of controlling which companies do or don’t get the chance to try a product, right, and market and see if they can make it, you now open it up to the world of all these different investors from all these backgrounds and perspectives and cultures. And I’m just really excited when I think about, you know, what this looks like five years from now because we’re going to see companies that perhaps didn’t look like that, you know, Mark Zuckerberg or anyone else, you know, that we use these pattern matching to try and see all of these types of companies were successful in the past. But what if it’s a completely other company that wasn’t even on anyone’s radar, and that ends up becoming a huge company tomorrow. So that’s why I’m really excited about reg CF. And as you can tell, you know, there are just benefits all across the board.

Oscar Jofre  39:20

No, no, I agree. I think we’re just scratching the surface. And I think this is one thing that we continuously try to outgrow, to educate everyone. The visibility we have into the private markets, the entire private markets, is on less than 2% of companies. And that’s pretty disgusting. I have seen that really, it’s pretty disgusting. Because it’s it doesn’t give you the scope of all the companies it only gives you that and I remember when I first reached out to these two providers that only two providers provide this data for the private markets. They wouldn’t track this space because they can’t validate the funding. And I’m like, You got to be kidding me, right? I mean, the platform is registered. So you know, the industry data, but that’s just reg CF. What about the, you know, the reg A is? What about that? If it wasn’t venture backed there when and that’s unfortunate, because there are unicorns, and not every company needs to be a unicorn. This is another aspect of it as well, it we’re going to have the unicorn. I know we are we already have. And now but the question is do you need to be you don’t you could be the local, dry cleaning shop that Andrew corn relies on that if he doesn’t get the next $200,000, during COVID, to survive, and he’s gonna have to walk another 30 blocks are these little dog named Jennifer to take this laundry instead of downstairs. So my apologies. So it makes sense for Andrew to, you know, come in and provide that. And here’s a mechanism that so there are many I agree with you, there’s a society gained by it, where you window. This is not a type of business that I would typically invest in, but it’s affecting my personal life, in my way of living. I like it. And if it helps, great and I get a return, that’s even better. And then No, of course, there’s the bigger upside. And What I believe is the beauty of the JOBS Act and Regulation CF is that if you can see for its grand scale, it doesn’t stop here. It just it’s a journey going on to the next stage. And so for me that that’s my takeaway. Obviously, Andrew, love to hear your takeaway on that. Yeah,

Andrew Corn  41:42

well, there’s a bunch of things that were said that I want to either expand on, or underscore and one of them is going to the benefit to society that Brian, I think very eloquently said, but I can take that all the way down to community and to the dry cleaning example that I’ve used before that Oscar just it because if there’s a dry cleaner, and they want to have three of them, that’s a lifestyle business, that is not something that’s going to be a unicorn and go public and be a billion-dollar business. But that doesn’t mean that they’re not going to that the woman who’s running that isn’t going to turn that into a thriving business and share the profits with the people who invest. And if it’s part of making a local community or revitalizing a downtown. Where would they get the money from that except the community itself? So you know, I think that this is absolutely fantastic. And you know, one of the things I’ll say because you know, you know that some races have really been done, and some sizable races have been done, I’ve gotten some calls from the wall street guys. And I’m like, Yes, Stay out of this, you don’t want to have anything to do with this. And the reason is, is that they’re used to going to six companies, pension funds, unions, whatever it is, and getting something funded. Well, the first thing I say is, you know, your cap table is going to have, if you have $100 minimum or a $200 minimum, do the math on five $5 million, you’re going to need a bigger boat, you’re going to need a killer transfer agent, or you’re not going to be able to manage this. So the first reason why you want to do a CF is you want a lot of shareholders. And I love that. And I say it slightly differently than Brian, but I’m seeing the same thing. Do you want three analysts at a venture capital firm to say, Yes, we agree what you’re doing is great? And write your check for $5 million? Or do you want 5000 people to say we all think your business is great. And we’re all going to write you a check for $1,000. So depending upon what your business is, I would rather have the font I’d rather have, you know, 1000s of people. So to me, that’s a great thing. And I have been viewing this and loving it with a plus, not every company wants that. And by the way, none of the people in the CF are asking you for a board seat or pre-emptive rights or any of the other things that VCs will ask for. VCs serve a great promise. And I can say this and it’s not even a joke. One of my best friends is a VC. But they’re not for everyone. Just like CF an A Plus is not for everyone. If you want to do an A plus and you don’t want 10,000 investors, you’re in the wrong place.

Oscar Jofre  44:39

Yeah. You walk in the wrong door. It’s Yeah, totally.

Andrew Corn  44:43

Yeah, yeah. Yeah. Your name tags the wrong color. You need to leave and go across Italy. No, I

Oscar Jofre  44:51

agree. I think it’s, you know, it is interesting. Sometimes you know, we talked about it, the benefit So the company and all that, but there’s another benefit, none of you touched on it, but I’m just going to bring it up. I mean, think about it. Here’s a company that it was a, you know, to intrapreneurs getting started by using this regulation all sudden, they are able to hire more team members to grow that business. So that job creation, what’s the multiple of that? Meaning? I, there was only two and now there’s 10 of us. And I know we’re going to be tracking it as a KoreConX word tracking from our seed round to our series A and then doing a reg A what the impact does, because that’s the true impact, right? Because that brings, you know, coming back to give it real, he drove it up to my head this morning. And it’s just it’s so true that the JOBS Act if the economy can only be in stimulated for growth, and growth only comes from small companies, because they create jobs, fortune 500 companies are great, right. But that’s not where the economic growth is. So So what’s important about that is that there’s another great social element that people will be employed by these intrapreneurs in be able to grow. And I, you know, today I was talking to one of our other clients, Legion M. I mean, I believe Andrew, you know them, they are a client that went from reg CF, and then reg A, reg, CF, reg A, reg, reg, CF, reg A seven times, I mean that, and they’re growing a community of ambassadors. And, and, you know, they probably started with a small group of staff and look where they are today. I think that’s wonderful. That’s, that’s also impactful, along with what they’re doing. Isn’t that interesting? I mean, can you say that

Andrew Corn  46:52

Legion means strength and numbers, but also, they’re in the entertainment business. So if they wind up with a million shareholders, which I know is their long-term goal, and I love this company, by the way, they, you know, when they put out a new movie, how many shareholders are going to go see it? How many of them will burn a friend, how many of them will buy popcorn, you know, this will stimulate I mean, enormous, enormous amounts of growth. And as you said, I believe all three of us are job creators. You know that is one of the fun things about running a company is telling someone that they got a job or a raise, or a bonus, I mean, it’s one of the most fun parts. So, you know, knowing that you’re part of an industry that’s creating jobs is definitely very fulfilling from my perspective. And not something I ever lose sight of, by the way, even if not brought up. No, no, it,

Oscar Jofre  47:51

it’s great. I mean, obviously, did you look at that part? I mean, Brian, from your perspective, like, even though your check was only $100. But if everybody cumulated, what did he do? It lifted this company to hire another person, right?

Brian Belley  48:06

Absolutely. And I think there’s another aspect to that. So there’s the capital, right, that’s allowing you to hire someone else. But the number of these companies that also reach out to the investor base that says, Hey, we’re hiring for a developer role for a biz dev role for something else, you now have, you know, kind of 1000 plus job boards through all these connections, who have a vested interest, right in helping that company out. And if they have a really good friend or a, you know, a brother or a sister or someone who meets that role, they’re probably gonna reach out and you know, refer them to them. So I think it helps from the actual talent acquisition hiring process as well.

Andrew Corn  48:40

Yeah, join our social media retweet us, I mean, you’re an owner participate. And you are I think people lose, it’s so not personal that I own 1000 shares of Apple. You know, I just don’t think that Tim Cook knows who I am. So it’s very different. Now, if there are 10,000 investors in reg A Plus, they won’t know me personally either. But there is definitely much more of a community because you’re, they will be communicated to regularly. And if the issuer does a good job, everyone will feel connected. So that’s part of the job of the issuer is this. They call it Investor Relations, but it also could be community building, because you’re building that part of your community because that’s going to be key to your growth in the future. If you get 5000 investors in your CF, how many of them are going to come in on your A plus A year half later, when they’ve watched you from where you were to hitting these hurdles, jumping over them, and getting to where you are when you’re ready to do the a plus. So it’s also kind of a joke because all the time people say I want to use a plus two go public. And I’m like, don’t do that. You don’t ever want to be public until your market cap is big enough to be included in an index track, buy an ETF so that you have volume. And you’re on a real exchange anyway. So, you know, with that, I say, No, no, no, no, you need to keep building your company up. And getting it to the point where one day, you may want to go public, but you can do a lot of private rounds between now and that. Even Facebook waited quite a long time to go public and a lot of the mega-cap companies did, and then to direct listings. So but if your Legion, the company that you were talking about, and they wind up with even half a million shareholders, going public is not going to be all that difficult when the time comes, they’ve already got 500,000 shirt, you know, assuming they already have 500,000 shareholders?

Oscar Jofre  50:57

No, great, it’s, it is interesting. As these companies go through these journeys, and the impact in so many different ways, and I, you know, it reminded me once again, what I need to do, it’s funny that you, you were in the middle of Iran, and it just thank you for reminding me, I gotta go back to them. You’re right. And, you know, we, and I’m, I’m, I’m trying to take away those reminders. Meaning, I remember when I first developed one of the corporate governance tools was, the reason we had problems during Enron was that people didn’t know what they needed to do at that moment, they can remember. So instead of trying to get them to do that, just put it in a trigger effect. This is just one of those triggers, hey, it needs to come more, it needs to come more fluidly. And look, I will tell everyone that we are in the process of ourselves. we’ve embraced crowdfunding from the beginning, but now internally and externally with our shareholders. So it’s a journey, right? And you need to be we have the tool, the tool is only one part, the tool is that the delivery mechanism, now you need to make sure you have the other two, which is the content and how you’re going to approach it to make sure that it’s meaningful. And it’s also continuously, right. That’s the other element. But I, you know, this conversation has been really important for me, because we uncovered I think for everyone listening in that there’s a lot of great benefits to it. The industry is evolving, there’s a momentum, things are going to change. It’ll be interesting, what this conversation will look like. And we’ll all have it back. I’m gonna make a note of it. And I’m talking about around September of 2021. And there’s a reason for that, well, two-quarters of the 5 million, it’ll be interesting to see how we will be addressing the benefits then, with what we have. Because right now, it’s no different than in 2012 when we were discussing the benefits of reg CF, a wonderful utopia. Now we have more substance to it. And I wonder if that will change. I wonder if the fact that broker-dealers are getting involved, like Dalmore with direct CFX. I wonder if that will have an impact in all of this. Right. I wonder? Exactly. I wonder if the reports that King’s crowd and others are doing clear writing? What are they going to have an impact on and all this?

Andrew Corn  53:42

Well, I want to ask each of you a question. Who doesn’t? Who doesn’t benefit for reg CF going from one to five? Oh, I

Oscar Jofre  53:49

have an answer for that. But I’ll let Brian go first.

Brian Belley  53:55

It’s a good question.

Oscar Jofre  53:55

Okay, I’ll go first and do that. So for me, it goes back six years ago. Well, actually, yeah, six, seven years ago. So when I wrote an article about where entrepreneurs were investors or customers ambassadors and accompany the VCs, me, Well, you know, who in their right mind would want to have 5000 investors in the company, but the real, my answer was 5000 customers so the real people who don’t want this to happen, make no mistake is the status quo that keeps making money. And the status quo is the venture capital space which now we’re a threat. This momentum is finally a threat to series A Make no mistake series A is under attack with reg CF. This is without a doubt a game-changer right there in itself. That is the momentum going forward. Why? Because reg a is now a threat to the investment banking. Would you not agree Andrew?

Andrew Corn  54:59

I’m Not at the high end. But yes, definitely at the middle market and at the lower end. So here is my advice to series A VCs. Or Series B would be looking at the companies put up a reasonable amount of money to guarantee that they will raise the full 5 million through a CF, and take ownership with them and be their partner in raising the money through CF, and benefit from having 5000 shareholders or 10,000 shareholders. Because ultimately, it will be really good for your fund as well. And I think there are ways that we can work in partnership rather than in competition. But I agree with you Oscar, that there’s going to absolutely be competition, and I’m already there. So, you know, with some of the 5 million ones we’re working on, it’s like, wow, they could have gone and gotten VC money based on their pedigree and the idea and what stage their companies are in. So, you know, I think that’s great. And I love working on deals like that. So

Oscar Jofre  56:12

Brian, the floor is yours, my friend.

Brian Belley  56:14

Yeah, I wasn’t gonna say that they wouldn’t benefit from it. But you know, if we get all of this increased action that we expect, right? The regulators are going to have a lot more to keep an eye on, there’s just more and more portals coming out, right, as we mentioned, we’ll probably be at a Who knows, maybe we’ll be over 100, you know, by the end of 2021. But then again, going back to the 5 million is, you know, a bigger chunk of change. So it’s going to be attracting a lot more people and potentially, you know, bad actors. So I think that the industry, not that it’s a bad thing, but we will be challenged right to just continue executing as we have been really kind of improve and mature. And again, using our words level up, right, we got to level up as an industry. Kind of the venture capital point, I mean, so again, I’ve never worked at a venture capital firm, I can’t, you know, speak from inside knowledge. But as much as it could be seen as competition, I would think that a lot of that really has to do with their mindset around it as well. Because while it could be seen as competition, I think looking at the right way, it could actually be a potential opportunity, right? Where there are now all these other ways where you can maybe just get a little bit of skin in the game early on to follow a company that you’re interested in, instead of having to leave that round or, you know, be able to diversify, be able to get Think of all the data, right, all this data is now going to be public, it’s complete transparency, all this stuff, which really hasn’t existed at this scale before for the private markets. So what are the venture capital is going to be able to do with that, you know, they can build all their machine learning models and everything else they want? Probably from that. So

Oscar Jofre  57:51

yeah, it’s gonna be You are right, Brian, it, there is a lot of public data, but it’s still not accessible to the public the way we want it to, for those who know it, is there. I do believe that in certain groups within the existing structure, markets money, they’re going to be feeling threatened. Those who are smart enough, like we were fortunate enough to see, to VCs that did see the late, they realized that this is a good thing, it’s not a bad thing. It’s a way to diversify your risk and get in, I don’t need them to write the whole check. I just need them to write a bit of it. Let me get the rest from the crowd. Let me move forward. I still need their guidance, they bring value. But I like the analogy that Andrew always says, sometimes I say it incorrectly, but it’s so true. I mean, would you rather have one person tell you about your company? Would you rather have 1000 10,000 a million? I mean, if your business is a business of serving a market, whether it’s a product solution or anything, I’ll take that one any day. It’s a true testament. So it’s, uh, I’m really looking forward to, you know, what’s to come in the next few months for us and how it’s gonna push all of us to level up. That’s the big thing that you hear all the time from us now because internally, I keep reminding our team that we got to step it up whether it was a year ago, it’s no longer the case. We got to make it better. I know, Andrew, you got that. So last point from each of you for you know, the benefits and the reg CF would undo our call to you and then Brian.

Andrew Corn  59:34

So I think we’ve touched on the bulk of them, that it basically is helping it can help communities it can help towns definitely is going to help all different types of businesses. And it’s interesting with the CFO, I’ve now seen deals that are not software and are not things that are looking to scale $2 billion companies, you know, they’re looking for an exit at 50 Do million or 100 million. And I think that that’s great. And I’m really happy to help them and to, you know, work with someone who is sourcing organic produce, it’s to then make the food. So there’s a food company that we’re not hired by, but that we’re looking at really carefully, and I’m actually gonna have some of their soup tonight. So yeah, nice. Very data sample the product, right? Yeah. Right. Because either I’m going to be part of that crowd, or I’m not, or you’re not. Thank you.

Brian Belley  1:00:35

Excellent. Yeah, again, just echoing everything that’s already been said. And that Andrew said, you know, there are so many benefits for the investors for the issuers for the community for society. I think going to what Oscar said earlier, though, we’re still really just scratching the surface. If we think of where we are today. You know, the regulation updates are going to be going into effect on March 15. You know, that’s another good step. But all of this is really still, when you look at the long timescale of how long all this has been going on, it’s still just a small, small part where we’ve been having a lot of change. So we probably can’t even envision some of the benefits and ways that this industry is going to continue to evolve. Just, you know, kind of building off the foundation and the platform that we’re at today of where we are so, you know, in short, I don’t think there’s any sugarcoating. I’m very excited about you know, where we’re going. I’m very kind of bullish for the industry and for everything else. So thanks again, Oscar for having me on today. It was a pleasure speaking with you, and as well and you

Oscar Jofre  1:01:31

know, guys, listen, we’re gonna be back. This is an ongoing education, we all need to do it, we need to do it a crowd wise, which I know you do. And you’re doing it with the CFA, which are a board member and, and I think all of us have to remember that it’s not an issue of, there’s no, I don’t see anything in this market is gone. But I see everyone working together, because the common goal is the same. We want to make this as exciting. So thank you to both. I made a note here. We’re going to come back here in September, we’re going to have it and we’re going to reflect back on this. And the good thing is this has been recorded. So everything you said, we’ll be held against each of you. Until then, have a wonderful week for both of you. Thank you so much for being with us today. For everyone else. Thank you very much. We welcome your comments, feedback. You can reach our speakers, you can go to KoreSummit.io. You can see the video there. You can see their contact details completely transparent. You can reach out to them ask the questions you like until their next KoreSummit webinar. Have a great week. We’ll talk to you soon. Take care, guys.