Why is Investor Acquisition Important?

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.

Andrew Corn

CEO

E5A Integrated Marketing

Andrew Corn

CEO

Andrew Corn is the CEO of E5A Integrated Marketing, a systematic, data-driven investor acquisition-focused agency that assists firms with raising assets or capital, engaging in outreach to prospective shareholders or clients, and launching new products. His experience spans several industries, including advertising, marketing, software development and investing. Previously, Andy was the CIO for E5A Funds LLC, a firm specializing in alternative investments and after-tax alpha strategies. He also served as CIO for equities at Beacon Trust Company, CEO of Clear Asset Management, and SVP for Corporate Marketing for TheStreet.com. Prior to that he was EVP Digital for Citigate which purchased his software firm MasterApproach and was the CEO/Head of Strategy for the agency Admaster Communications.

Elliot Chun

Managing Director

Emergents @ Weild & Co.

Elliot Chun

Managing Director

Elliot Chun is Managing Director of Emergents @ Weild & Co., a middle-market investment bank and broker dealer. The Emergents team specializes in working with Issuers to raise capital through Digital Asset structures. Elliot brings 20 years of Capital Markets experience across functions (Investment Banking, Buy-Side, Consulting, Sell-Side) and across asset classes (Digital Assets, Equities, FX, Fixed Income, Privates).

Oscar Jofre  00:00

Last time, it was in the year 2019. Back in the day, back in the day Yeah. 2020, early 2020. No for me it

Andrew Corn  00:15

were live. I think Oscar.

Oscar Jofre  00:18

Yeah, we are live. Just give me one second here just trying to get things

Andrew Corn  00:21

out. We remember the topic.

Oscar Jofre  00:25

Oh, I think we’re going to talk about I think it’s about is it? Yeah, I’m already there. Don’t worry, you think you got me or something? Not gonna happen.

Andrew Corn  00:39

It’s an always

Oscar Jofre  00:40

this is a quantum overdrive term, gigabyte storage device. It’s all there. Don’t worry. All it. What’s the what’s your hash rate trading at right now. And it’s you cannot it? You can. Alright. Welcome, everyone. Good afternoon, and welcome to once again, the KoreSummit webinar series 2021. My name is Oscar Jofre. And once again, we’re delighted to have you this afternoon. We’re going to have another great discussion. I hope you got the one in the morning today now was a doozy. I enjoyed that one very much. And this one is going to be another good one. I brought two different opposite sides to a great discussion today. You know the drill. It’s very simple. We have no PowerPoint presentations. We just a nice cup of coffee, juice or water and enjoying the conversation as we have a dialogue regarding this incredible topic that I think needs a lot of attention. So before we get started, I want to give our panelists maybe some of you have already met them but maybe you haven’t. Gentlemen, please start with Los Angeles.

Elliot Chun  01:52

I am in LA today Elliot Chun here all the way out from sunny California. Great to be here, Oscar thanks for doing these important educational sessions. My name is Elliot Chun, I am co founder and CEO of Emergents at Weild & Co. we work with early stage companies that are on their journey through private capital markets and help where we can and we’ll talk about one of those important functions today.

Oscar Jofre  02:25

Andy do

Andrew Corn  02:27

a Hello everyone. I’m Andrew corn. I am the CEO of E5A, our official name E5A integrated marketing if you’re looking for the website, and we are a systematic data driven investor acquisition firm. So we perform many of the same functions of a marketing or advertising agency. But our sole focus is on acquiring investors. We work marketing a lot of investments and financial products. And a couple of years ago started doing reg D into RegA plus, and now reg CF being that it will be at 5 million starting on March 15.

Oscar Jofre  03:15

Wow, thank you, you let it in good song. You know what? You did that before? You got Oscar. Before we get started? Let’s remind everybody. We’re like, two weeks away, everyone, two weeks away from a great launch of the amendments to the JOBS Act, which you know, to you, Elliott, you’re involved with the Father their jobs act. So a great day, it’s going to start off. Great. We’ll talk a little bit about that afterwards. But great reminder, $5 million on reg cF 75 million on RegA. And I think it’s it’s pretty interesting this topic, how that will play out how important investor acquisition, the impact it will have. And the fact the two of you are coming from different sides. You know, Elliott coming from the broker dealer side, and then yourself, Andrew from the wealth marketing, you’ve been in both but someone advantage, it’d be interesting to hear your thoughts on it. So let’s start with you for a little bit. Eliot, I mean, as broker dealers, a lot of them are unfamiliar with the term investor acquisition other than hunting for for investors. But this is very different, what we’re talking about here, so if you could just give us an overview from a broker dealer, and I’ll come back to you, Andrew as well. Because interesting, you know, I get asked this a lot. What is investor acquisition versus a broker dealer hunting for me?

Elliot Chun  04:38

Yeah, I mean, I actually would like to give recognition to the term investor acquisition, I think it is probably the best description that we’ve had in a while because previously this function has been described by many different terms right marketing investor, really lations selling, there’s a lot of coin terms that have been coined to describe this process. And I actually think the term investor acquisition, does it the best in two words, right? So so what are those those? What are those words, investor on one side, that is the who, who is the person that will be financially investing into what you are raising capital for, right. And that profile of the who will go through that is, is very important. But when you think about how you interact, engage, and bring that investor along, through your journey, and through your investing process, is a vital, vital thing to think about in the broader capital raise environment. So, the investor part key second part acquisition, and, you know, note that it’s not, it’s not marketing, you know, marketing is a component of it. And it’s not relations, because they’re not a part of your journey yet. This investor acquisition process is how do you convince somebody that your company slash idea, slash journey is something that they want to be on. And the whole process of showing that you have access to invest? You are an accountable team that is doing it with all the right regulations and compliance. And then finally, that you are the team to execute that vision. It’s very much a storytelling journey that is required to get an investor through that acquisition process. So I love the terminology. And I love the term, because I believe it adequately and sufficiently describes that it’s not just a transaction that is trying to happen here. You’re actually trying to acquire somebody to have them a part of your journey, which doesn’t start and end with wiring of mine.

Oscar Jofre  07:30

Very interesting. Look at that. Can you? Can you? Can you add to that, Andrew?

Andrew Corn  07:38

Well, I wonder who coined the phrase investor acquisition, let me think.

Oscar Jofre  07:44

Hold on, hold on, hold on, hold on. I have notes on that. I do. I even have the email. But that’s okay. I know, it’s kudos, man. Okay.

Andrew Corn  07:55

So yeah, we’ve been using that term for about six years. And we’ve done a lot of work institutionally, and then also through the financial advisor channel, and never really called it investor acquisition. Because what would happen is, especially in the institutional side, there’s a lot of personal involvement. And what firms like mine do is really look for intent when it’s on the institutional side, or intent and real interest with the advisors. Once things move to retail, whether we’re marketing a or, or trying to acquire investors for an investment product, or a RegA plus or reg CF. It’s its scale. And it’s a little less personalized, because you’re not necessarily on the phone with them. Most of it happens in a highly automated fashion. So the same way people use the term customer acquisition, you know, if you’re selling bubblegum, or if you’re McDonald’s is not done through a relationship, the relationship is built through the way they go through their journey of never having heard of you to having heard of you all the way through G, I’m going to try this or in the case of a CF or an A plus, I’m going to allocate money. And actually, there’s two more steps after them even allocating. One is them telling a friend and sharing that information. And then the second is, is continuing them on the journey. And Oscar can speak to this especially in the perks, she sits as in the transfer agent role of seeing people come back and investing a second time and a third time. And that is part of it. So that’s part of the ongoing communications that happens between an issuer or a company and once they’ve acquired that investor. So it doesn’t really Stop once they originally placed money into the company, I invested in a CF this morning, thank you very much. I put $300 into a startup that I believe in quite a bit and happens to be a client, we don’t usually go in and run through the process like that. But having edited a lot of the materials, what really got me was there. And we talked about this yesterday a little bit was their video of case histories. And in this case, there are patients who have been essentially cured by a medical device. So, you know, I found it really compelling, compelling enough to actually invest myself. So there you go.

Oscar Jofre  10:51

Oh, so you, you went through the journey yourself, you experienced it, you click the button you went through you go, Ah, so that’s what it’s like, right? Yeah, I

Andrew Corn  10:59

wanted to see every entrepreneur as well, because our official media launches Friday morning. So I wanted to make sure you know, every, everything every piston is firing properly and in sync. So

Oscar Jofre  11:12

perfect. Perfect. Did you know

Elliot Chun  11:14

that that brings up probably one of the more under emphasize components of the investor acquisition process, which Andrew, you just highlighted the emotional connection, right? You saw something in the videos that struck something within you that you’re a little bit different. But that is that that incited you to take an action to say, I want to be a part of this journey. And I think that is so key in the investor acquisition process today, which is how do you emotionally connect is investing is an emotional thing, particularly within the the more retail space? And so how can you build that emotional connection so that when people are evaluating whether or not it’s the right fit for them, that they’re not just getting the financial alignment to the investment, that there is something else that connects that person to the investment and when you can properly either tell that story or build that connection? It makes the investor acquisition process a little easier? Not a lot easier, but it makes it easy.

Andrew Corn  12:46

Yeah, nothing makes it easy. For sure. Yeah.

Oscar Jofre  12:49

Just gonna say.

Andrew Corn  12:51

Yes. I mean, you can look at is the product viable? Yes. How big is the market size, okay, it’s there. And it’s definitely worth it. This is not going to be a lifestyle business is going to be a real growth business. Do they have a minimally viable product, in this case, they have a completely viable product and over 2000 treatments have been done. So I might as well reveal, its invest in solar. So l a therapy.com. And the official launch is Friday, but the page is up now. And you know, with over 2000 treatments done, you’ve got a video. And it’s a crappy video, because these are live testimonials of women whose lives have been changed. Basically, they have a therapy for chronic pelvic pain. And I can run through all the here’s what the device does, here’s how big the market is all the quantitative stuff and all the selling points. But what really got me was they have a Chief Science Officer, and any company that’s got someone with the same title as Spock, from Star Trek, gotta love that. And then when I saw these women who have basically been cured, I was like, I’d be crazy not to not just help them in their journey of acquiring investors, but also putting money in myself and putting my money where my mouth is. So you know, a lot of what goes in that, you know, we’ve got data, we’ve got nearly a million accredited investors who we use with CF and RegA. But in this case, you know, and I’ve given a little bit about the company, how many ob gyn practices are there? How many people work within them? What level would they be interested in investing in a device on a personal level? What other health care people whose lives are being affected and how how do we locate and acquire data on that. So that essentially is three groups, we have people who just invest in private deals, we have the professionals in and around the industry who may be interested in investing. And then we have the people who it’s helping. So essentially, the customers. So if I were to switch that, let’s say to bubble gum, it would be who, you know, General investors who makes bubble gum and understands the process, and everyone along the value chain, what ingredients go in, and then who choose bubble gum. So we’re constantly looking for data on these different audiences. So that we can start off with that and have a, you know, again, increase our probability of success as we are trying to acquire investors.

Oscar Jofre  15:51

Okay, so the two of you, thank you for the investment journey. That was a nice little plug you put in there, but that was good. That was a good example of all

Andrew Corn  16:02

yeah, it was in context, or I wouldn’t have done yeah,

Oscar Jofre  16:04

of course, of course, don’t worry, you know it. Who am I to go and give you a quick slap, you know, who am I? Nobody know by offering society. So here’s the, the, the key element that here, obviously, they let’s put it back, where we’re why it’s so important, where we started with what we were talking about what’s the messaging and how the messaging could drive a person to it. So we really haven’t gone into in a little bit more detail all the elements we got. You know, Elliott provided his perspective from a broker dealer what he thought I didn’t hear from you and or him, or maybe I misunderstood, did you, if from your view, I mean, exactly,

Andrew Corn  16:51

nothing happens. If unless you require investors, you can build the best product, you can have the best ideas, you can have the best team. But if you’re out raising money, and no one is there to put money in, and you don’t acquire investors, you’re not going to get very far. So you know, you can, it’s interesting, because you can have great attorneys, and they’ll do the best paperwork, you can hire the best broker dealer and they can set everything up. And it’s all legal compliant, and make it near frictionless for people to invest. But unless investors are brought to that story, you don’t really have anything. You know, I think it’s McKinsey who said, nothing happens until something sold. And there’s a correlation where nothing happens until there’s an investor in this case.

Oscar Jofre  17:50

Okay, fair enough. So but we know they, they sit over here, and they sit over here, an array of buckets, right? We see them in one bucket where we use social media to get access to them. That’s one, there’s another bucket where they’re registered investment advisors, which we’re now starting to have a really good conversation around that. And so, because when when I mean, I’m gonna play devil’s advocate here, I mean, if you’re often Oh, by investors, I don’t know about you guys. But every other day I get I get an email, oh, you can buy investors for 10,000, you can have an entire list. That’s not what you’re saying here. I just don’t, because when you said a choir, when I hear the word acquire, I don’t want the audience to think oh, I just got to go out and buy it. What you’re really seeing is I hope I interpreted is that you acquire investors, from the sense that your opportunity itself, and then how it’s then deployed through these different channels to attract them to come to your site. Did I get that corrected from?

Andrew Corn  18:57

I’m sure, Elliot, you want to?

Elliot Chun  19:01

I Well, I do want to echo what you said, Andrew, which this is the most vital part of the process in this is not just for someone that’s going through RegA This is for generally speaking, any private company, the investor acquisition process is is if you don’t do that successfully, and many groups have not you’ve likely incurred some significant out of pocket expenses and not going anywhere else with it. So the this phase is is vital. It’s essential, and every successful company has, generally speaking, done this process. Well, they’ve succeeded in some way, shape or form. And with the tools that are now available to us in 2021. We feel more and more people out there people that are listening Now that you have a passion project have something that they have, they have a strong, strong feeling and sense for solving in the world, you’re going to have an ability to take a shot at building it. And at some point in time, you’re going to have come to the question or to the decision of how do I go about my investor acquisition process. And it is tough. It is it is not easy, right. But there are ways to make it easier. And there are ways to be able to help facilitate longer term success with good investors. And that is, that’s a big focus here of this discussion. There’s, as Oscar had mentioned, there’s shortcut ways where you can buy investor lists and just basically spam that list and hope that you get some responses back. Or there’s the that’s one spectrum, or there’s the other spectrum where you take the time upfront, to properly identify the profile of who you want, as an investor into your company, and facilitate a organized process in terms of going out and building those relationships. So I think that’s important to note here.

Andrew Corn  21:35

Yeah, and a lot of those relationships are built digitally. You know, one of the things that I ask issuers are all ask an entrepreneur, I’m like, why do you want to do a $5 million? CF? Why do you want to raise your $20 million through RegA? Plus? Because the first answer should be is, I want a boatload of investors. If you want a really clean cap table with five people on it, crowdfunding is not the route for you. So if you essentially want to build a big tent or a big boat and have a lot of people go on this journey with you, then crowdfunding is a really great way to go. And, you know, one of the other things we do and you know, I say, we’re a systematic data driven investor acquisition firm. Sometimes I’ll say we’re a systematic data driven investor acquisition, at scale from, because it is all about, you’re not going to have 500 investors, if you’re raising $20 million dollars, you’re gonna have 1000s of ambassadors, you know, if you’re going to come up with a $5,000, minimum or a $10,000, minimum, that’s not going to work in this industry. So there are certain circumstances where it might and of course we can, through data, solicit only people who are accredited, even though they don’t need to be for RegA, plus or CF, it’s possible to do that. And there’s certain times that’s a good workaround. But most of the time, it’s because you want 1000s of investors, and you want 1000s of people to say, Yes, I believe in what you’re doing so much. So I’m willing to put place money.

Elliot Chun  23:25

And it’s not even just investors at that point, you’re, and this is a point where I think we get hung up on terms you haven’t just taken, you’re not just taking an investor’s money, that the success that we’re seeing is not just taking it investor money and saying, Oh, great, thanks, you’re on the journey. It is further embedding them into your process and having them become company evangelists for your mission, and what your vision is, and to help you succeed in that vision. The power in using crowdfunding and RegA plus, is taking those 1000s of people and each of them telling one or two or 10 people about your product or your service, or whatever you’re delivering to the market. And allowing, enabling and embracing what the network effects can be when you financially align the masses to the success of your company. That’s the brilliance of this whole thing. And that’s the whole reason why today, you are seeing so much of publicly traded equities trade on market sentiment. It’s not based upon numbers as it once was before. It’s based on I use this product Every day. So if I’m using it every day, why wouldn’t I want to be an investor into that company and therefore share in the financial success of the products that I’d love to use every day. We’re just talking about doing this at a much, much, much earlier stage. And that is also why it is so critically important to consider a reg CF RegA plus raise for early stage companies that are consumer focused or that are looking to engage with broads amount of broad amount of customers, in order for in order to facilitate success, because this is a genius way to be able to engage that audience and be able to leverage what you are building for not just investors, but also converting them to consumers, or customers or clients of your product.

Andrew Corn  26:09

And I agree with that there are b2b situations where there is ginormous interest in retail as well. You know, we have a new client onboarding, and I won’t mention names. But essentially, they make very low emission jet fuel from either the waste that comes out of a dairy farm, also known as cow manure, they capture the methane turn it into really low emission jet fuel. They also can cap all those oil wells that are just sitting there with methane pouring out of them, and turn that also into fuel. They’ve got a bunch of cases like this. So it’s a pure b2b sale. But who doesn’t want to have that happen? And you know, it

Elliot Chun  27:01

Well, look, you’re now now you’re aligning to where a lot of the themes that we’re going to be seeing successful and investor acquisition, back to the emotional side, the emotional connection, these themes in climate technology, in mobility, in energy in waste innovation, as as Andrew just mentioned, in food, and agriculture, and land use, things that are improving the built environment, lowering greenhouse gases. All of these environmental and socially impact oriented themes are our ways to be able to align to the messaging that we’re hearing in the markets today, which is investors not only want to take Financial Action, but they want their financial actions to have a very specific outcome, which is to, generally speaking, improve the environment, improve climate change, improve health and dress issues that are top of mine, was a very, very, very difficult to do that 10 years ago. You know, people were like, Oh, I’m investing in GE, because they have a, an energy efficiency side. Alright, well, GE does a ton of different stuff. With the accessibility of crowdfunding and RegA plus, and even private investing, you now have access to invest into very specific initiatives that can meet an investor’s generally speaking, they’re investing preferences. And that’s something that’s very powerful. That’s something that didn’t exist 510 years ago, didn’t even it not to the level even three years ago, it didn’t exist to the level that exists now. And that’s part of the reason why we’re so excited about the future of both of these regulations and the ability to engage investors going forward. Because now you’re able to present things that fit into their beliefs and their themes. And these are methods that RegA plus and reg CF are ways that certainly allow for that.

Andrew Corn  29:36

Yeah, so we have some buckets that we look at when it comes to these types of firms, the issuers who we believe are going to be successful. So ESG, the environmental, social and governance. You know, the things that the UN sustainability is looking at things like what we just talked about turning waste into fuel. So that’s one bucket is The ESG another is innovation, things that are just going to shake things up companies that will make a, you know, a seismic impact on industries. And then the third bucket, believe it or not, is just simple yield, how can I get income, because we have bond yields at near zero, they’re not going up anytime soon. We heard Powell speak yesterday afternoon, calm the markets down on inflation and interest rates. So you know, you’ve got an aging society, not just in the US, but around the globe, how are we going to switch from growth to income for the retiring class. So things that are putting out current income, and it used to be, it’s only a hard asset, and I will soon publish a piece, how real are your real assets? I’m about to publish one much sooner on how ESG Are you really, because there’s so little precision measurement in that world. But anyway, when it comes to yield, one of the things we’re seeing in alternative yield are long term contract. Oh, here is a group. And they basically make electricity from the sun, also known as solar energy. And they’ve got a 20 year contract from the utility backed up by a state. And one can basically refinance that into something that’s delivering a, you know, two to four times what a bank will pay you. And it is not secure, because it is not FDIC insured. But there is that long term contract with the utility backed up by a state. So we believe things like that are going to be very good at acquiring investors. And they’re we’re hitting not only the income bucket, but we’re hitting the s3 bucket. And in some ways, you might still say that solar energy is hitting a little bit of the innovation bucket. So we look in those three areas, there are other areas, but when we are vetting deals with issuers, we’re making sure we believe that there is a mass niche audience that is interested in this specific topic, and whatever it is they’re trying to solve for.

Oscar Jofre  32:33

So which,

Elliot Chun  32:34

which is the capital structuring side, right, and Oscar, I’ll let you jump in. But just just a little note on that is why while it is extremely important, to structure the investment in a way that works for issuers, I would argue, and it sounds like Andrew is saying something similar is that you need to understand what the investor demands are in the market as well. And when you are able to consider what is a structure that works for investors today, something that benefits them, it during the investor acquisition process, it is painfully apparent to tell when an issuer went through a process to say I understand what investor demands are. And I am seeking to create a structure that fits very well for them, while also fitting well for us. But But when you do do that, and you do include things like yields, which is I agree a very high demand investment structure or an or an investment component. ESG is, you know, I ESG in my in my opinions, you know, you’re not doing any harm, you’re not really also doing any good, right? I would love to be more active with with that investing. But when you are able to provide that benefit, again, and a lot of it comes in how you structure the investment so that you can allow for a more natural transition into the investor acquisition process. It’s important to think about that upfront. And there’s a lot of different factors that go into that. But it is a very key point for investor acquisition. When you’ve thought about what is best for your investors for future Yeah,

Andrew Corn  34:40

I mean, when someone shows up with a product or service you don’t want to find a product or service that sounds great but is seeking a market because very few people are Steve Jobs and convince something as useless as the iPad that I own six off so you know when I first I saw it, I was like, oh, how useless. There was no market for it. And he invented it and proved us all wrong. You know, I own six of them. So mostly my daughters do, but I do have access to at least one. Anyway. Yeah. So we’re always looking for a product or service that we feel that there’s not just customers for but customers who would also be investors. So because we’ve seen, we’ve had an issuer come to us the 220,000 people on their monthly newsletter, and we got nothing from it, because of what they do for a living. They’re too young. You know, first of all, you have to be over 18, just to invest in the CFO and a plus. And they have lots of high school student says, for instance, on their last, so the question is, are your customers also investors, and you can also say, the converse, will your investors also become customers. But to kind of echo what Elliot said before, even if they’re not odds are they’re going to be advocates for the company moving forward, because they emotionally and financially have bought into your company. And therefore, and you use the word alignment, which is something that we talk about a lot as well. 85 A is, you know, this alignment is what we’re looking for. So, you know, totally agree with you there.

Oscar Jofre  36:33

So, okay, and I’ve heard, you know, I’ve been taking a lot of notes. And in I take them, because, you know, the it’s interesting, when you hear people in the industry talk about it. And I always take the seat back, and I go, why are we spending so much time trying to educate the market about it? So there’s a you know, it, there’s a gap here synthon? Is I let you both in I kind of I you guys went on a kind of process. I feel I know what the the entrepreneurs feeling? I because it’s, it’s so we we were trying to describe something in a way that it, it’s very different than what we’ve done before. Investors acquisition has been dialing for dollars, you’re a VC, they made the target sectors, this is different. I keep hearing the word emotional, a lot of times connectivity to the to the opportunity. So where’s that sentiment being collected? Where it because it’s good that we know that that’s what that connection is going to be? How are where is it coming from that is going to drive us to that is? Is that something that it’s now starting to appear? I guess that’s the question. Because if you’re going to spend this kind of money, you go, Okay, well, this is great. I mean, the traditional way is by less target VC based on these sectors, these stages of funding, that’s not what this is. Right? I.

Andrew Corn  38:12

So I’m gonna jump in and say it starts with affinity. And you know that someone has an affinity tool to or for something about what it is that this issuer does. And that is definitely a data set that we want to acquire. So when we’re looking at DJI they’re doing the raising X amount of dollars, the minimum is let’s do the math. If the minimum is $300, and the median is 500. How many times does 500 go into the number that they are raising? That needs to be a tiny fraction of the number of the total universe of people? So we do some back of the napkin math to see is this even possible to we believe that it’s plausible. So you know, it but it starts with affinity. It’s not just the emotion, but it’s the preponderance of doing that. But then take all that away, because we start with that data. And then we have our data I mentioned on people who invest in private deals. We start with that. So we’re going to come at the offering page with these different data sets, maybe a third data set, you know, I talked about the professionals within something, we’ll just let me finish this one thought, yeah, I will promise to be quiet. But no, throw that out as fast as we can. Why? Because a subset of each of those groups is going to self select, meaning they’re going to raise their hand and say, click. I want to know more about that. And when they hit that offering, And they let the whole page draw up. And they stay there over a minute, they’ve now joined another group or, or they’re forming a new group of people who say, I’m interested in investing in this, they may not become investors. But there are an awful lot more interested than these large data sets that we started with. And we refer to that as building first party data. And there’s a lot of emotion in that first party data, even if it is a bunch of code and a bunch of data. You know, if people watch a video, or they download a PDF, they have invested more of their time, and also of their emotion. That’s better first party data. And if you’re doing an A plus, we eventually will change all our data to just people who we can do attribution analysis on, we’ve clicked the invest button. But as fast as we can, we get rid of our initial data sets. And we’re only doing looking at the attribution on people who have come to the page. So because they have said, We are absolutely more interested. So protect those three original groups. And now you have a mishmash of those who are interested, and you do attribution on them. There’s always an aha moment for us in investor acquisition of, Wow, I didn’t realize they all have these things in common. And that then needs to be scalable for to truly work.

Elliot Chun  41:33

And two things to add to that is, and I love Andrews data driven process, it’s vital. It is definitely a math game. But along with a game is the emotional intelligence component. And when you think about two points of friction during the investor acquisition process, the first is getting somebody to take that action, which Andrew decides is either saying the invest now button or the download this plus. So if we think about that point of friction, how do we alleviate that and remove the friction in order for them to take that action? And either that’s a message a video more in more? How do we communicate the passion and vision component in as either few clicks as possible few words as possible, as little friction as possible. The tools that are available to us now in 2021, are very different than they were before. And so, you know, we believe the medium of absorption of quick data is changing. Previously, it was a PDF in a deck who I would like to see this. Now we’re seeing more engaging techniques. 30 minute 30 seconds, sorry, 32nd describer videos, to catch the attention to build that connection in order to in order to have or incite that person potential investor to take that action. Right. So that first point of friction and trying to remove that and engage in ways where you’re actually your passion comes through is that’s a key part of the process.

Oscar Jofre  43:39

So the other Sorry, sorry, you were gonna say the second friction.

Elliot Chun  43:43

So yeah, the second point of friction is now that they’ve hit the invest now button, and they’ve gone to the page. One of the challenges is, there’s just a lot of requirements that that person must go through in order to invest in the process. And as much as so this is somebody that is Hey, you got me, I am interested in and you’ve done something for me to at least want to learn more. And when that site comes up, and it says hey, you must fill out XYZ information in order to sign in. It is a roadblock. It is a place where we see again, friction turning people away. This is where human communication and a hand holding can be very valuable. And so it’s an age old tool, but it is something that I believe is going to make a comeback because there is a education and training and implementation process that one has to go to, particularly when they’re innocent. For the first time, why do I need to give you this information? What are you going to do with it? And be able to walk that person through the process and say, Hey, this is why you need this. This is how you get here. Let’s get you through that hump, answer those questions, and then you can talk about the investment. So if so how do we solve for that second point of friction, that’s something we’re constantly working with. But we do believe that going old school and picking up a phone and having a conversation, not that you’re going to do it with 1000s, or 10s of 1000s of people. But we do think that that is something that is helpful during this process.

Andrew Corn  45:48

So the digital guys can completely agree with you. You know, the sad truth is that only 30% of the people who click the invest button complete the process all the way to putting their money in the first time. So we have developed a lot of techniques, some of them only in the last six months, to get people to complete that investment. And we can get that to typically between 60 and 70%. How do you get that to 90? The only way that I can think of is but the question is incentives, how do you get someone with a series seven on the phone, who will call these 30% of people 20% of people and convert them. But what we have seen is that when someone from an organization like yours, will do that and pick up the phone, odds are that they’ll close meaning they’ll put their money in, and we’ll actually put more money in because of the type of engagement that’s just happened. So you know, we can let them know that you exist, we can lead them to a page, we can get them to click and vast, but then there is friction that is beyond my control. And those who know me know, I hate things that are beyond my control. But that process is. And one of the great things that can help complete that process is a chat, but more important is someone on the phone. I don’t think that’s replicatable.

Oscar Jofre  47:26

You know, I got a number of questions here that came out of that, as you guys were going on as a company, if I have to, I heard affinity for the very first time, when now it is so is the company that is coming through this process going to need to have that mapped out already? Or is that what you guys are your shop?

Andrew Corn  47:51

Yeah, so sometimes it’s really apparent, we have a product that is aimed at the LGBTQ community. So that is x number of million people in the United States, you can then divide that by age by household income excetera. And we were working on data on that there’s plenty of data on it, and it’s easily acquired data as well. So this is a great thing, until one of my daughters says Dad, you know, what is wrong with you? What about supporters of that community? Don’t they have just as much affinity? So in this case, she said, you know, that TV show, we love to watch RuPaul RuPaul has 12 million followers on Facebook, how many of them are not part of that community, but support that community. So affinity isn’t always extremely obvious, or at least it wasn’t to me in that one sense. And you know, it took a 20 something to remind me I’m not as woke as she is. So to then say, gee, now we have another 12 million people who we can acquire data on. And you know, again, subtract everyone who is under 18, and everything else like that, that we need to do to make sure that we have viable data. So sometimes it’s really apparent but sometimes it’s not you need to think it through. You know, it, it’s it’s if you have a product and it’s aimed at parents, should it be aimed to grandparents as well. Should it be aimed at the cool aunt and uncle? Should it be aimed at you know, it really ones up? Do you really know who the full audience is who would invest in us. So you know, the affinity needs to be there and it needs to be statistically significant size group, but you really need to think it through a lot better than what may be completely obvious.

Oscar Jofre  49:59

Okay, Yeah, we just think

Elliot Chun  50:02

affinity is a great word, we just use a different term and answer resonate. Because maybe I’m not a part of those groups, but does what the message that’s coming through resonate with me. And if there is some sort of resignation, I could fall outside of those initial data screens, but because the message resonates with me, I have interest. So

Andrew Corn  50:31

depending upon the product or service, we may hit a lot of family offices with the RegA plus message. And a lot of people will say that makes no sense whatsoever. People who write checks for millions of dollars, like a family office, are not putting in money at the same terms as someone who can write a check for three or $400. Why would they, but the reason that they might is, first of all they might, it is because it may resonate with Elliot just said, and if it does resonate, they may do it in their personal account. And if they work at a family office, we know they can well afford to do it. But the second thing is, is that they may decide, hey, this is something we want to do. We were doing a RegA plus offering and a casino running Native American tribe saw the ad, went to the offering page, figured out how to get in touch with the issuer, and made a separate deal with the issuer. That is not part of the RegA plus, but if we weren’t doing what we were doing, they would have never heard of this company, ever. So but what we were doing resonated as Elliott said, and that’s what it takes. It’s that aha moment I get it, I need to be a part of it.

Oscar Jofre  51:52

And just to come back to that. So Elliot mentioned a couple of frictions, and I just want to make sure if if they resonate well with you as well. So he’s seeing the free investor acquisition to be successful. It has two friction points. One, obviously to take action, which is that’s where you got to make sure your emotional value proposition coming back to the affinity or the resume has to be well, and the second one is the data, you know, the data inputs? Do you agree with those two, I would

Andrew Corn  52:22

add one more. So I would say first, it’s getting them to the offering page, it’s going to be an ad of some sort, it’s going to be an email of some sort. But it’s going to be a social media post, or as we like to say, it was none of them. And it was all of them. So get to the page, okay, getting them to the page is friction number one, and that can be six touch points, or eight touch points or 25. Depends upon Okay, person, the circumstance. The second one is getting them to click that invest button. So which he said take action. Okay. All right. So the first is the first action is getting them to the page, the second is looking in best. And then you know, they’re gonna ask you for your social security number. How many people want to put their social security number into a webform?

Oscar Jofre  53:13

Okay, so that last step,

Andrew Corn  53:16

that to me, that’s the greatest perimeter? It’s, I don’t want to give my social to anybody.

Oscar Jofre  53:24

No, I know. But as you know, in order for the, again, this is best practices, if the company did the offering page correctly, in clearly demonstrates the broker dealer there and understands that KYC needs to be performed. I mean, people are doing it today. I mean, millions of Americans have already gone into RegA, and we see it, but I’m not getting it, you know, the first two points, that’s I believe, that’s all on the investor acquisition team, they need to do their job, first of all that is on job yet, get them to the page that said that, you know, and the fact that you identified point number three, so we’re going live and testing point number three. So we believe an investor fatigue minus you. And I think that we we believe that, because 30 to 40% of the same investor swing investing, they’re getting fatigue, fatigue, or not, again, I want to invest. So there’s that or the the new one. So. So we we’ve, we understood that that was something that needed to be solved. And it’s good that everybody’s recognizing that that’s and in where people need to start realizing that if the market is too in 33 million Americans that fatigue can get very, very big very quickly. And we want it to get bigger, but if we don’t solve number three, we will never scale any further. Because this is what we’re looking at. We’re looking at more reg CF platforms than ever before. So imagine Oh, I like that one. Oh, go to login again. I like that one. Oh, gotta login again. Right? And so that’s one part. And then, oh, that’s a nice RegA deal about Oh, look at that right deal. And I got to do it all over again. So we did traditional people go, Oh, that’s easy. Oscar just put in the Twitter, the LinkedIn or the Facebook, LinkedIn, no, here. No, that’s not, that’s just to get you in the door with a little bit. What they really need is the rest of the data in order to pre fill it and to carry it and it needs to be in a way that can be trusted and validated. Because whoever’s receiving it, or getting it needs to be able to go through. So we agree 100% on that I didn’t realize that it would tie into investor acquisition, but it is

Andrew Corn  55:46

now and Oscar.

Oscar Jofre  55:47

Yeah, yeah, no, I agree. I agree. I listen, I did. It. This was a really interesting discussion, just watching the two of you. And if I seem like I was bored, I wasn’t I was taking notes. It here’s why. Because the problem we have as an industry, we know the stuff, we know it inside out. And then somebody ask, what is investor acquisition? Yesterday, I had a conversation with a group out of Australia never heard that term before. So it’s not like marketing, what I hear these guys go out and get you eyeball. So but understanding that it as an industry, there’s an education element, educating the people what that what resonate, what resonates means what are those themes that that Elliott brought up? What are the emotional drivers? I mean, we’ve spoken about that before, that’s always been critical. I always, always provide another component to everyone. And they say, look, investor acquisition is a double whammy. And a unit, you said it there with that, with that reserve coming out. And this way, if you weren’t doing what you were doing, the wind have even heard about the company. People make the assumption that investor acquisition is we’re selling shares go out and buy. That’s not an emotional driver, other than a different type of group of people that you may not, but it’s, but it is pretty interesting. We’re getting more methodical about this. I think the key going forward for the industry, because it’s evolving. We there are many different touch points that are starting and we’re all working towards getting better information. So the as that information is being made available, it can be quantified in a way that it can indicate. Okay, here’s a $10 million offering 3000 investors, the affinity was this, you know it this is a that’s a very powerful component that I think we’re going to get to. That’s my excitement about all this. Elliott said, if we didn’t have the tools a few years ago, now we do.

Elliot Chun  57:47

Just a final thought on that. Appreciate you’ve always got great stuff cooking Oscar. So I love I love No, no, but you’ve always known they’re coming. But you’re right, this, this movement that we’re seeing with reg CF, RegA plus, this is a move to more independent self sovereignty and an ability to generate wealth. Right? That is that is what the industry is presenting for investors. And to the extent that we’re able to provide access to quality and accountable investing opportunities, that can lead to individual wealth generation. In that whole embedded in that whole movement is that kind of individual passport concept that you’re mentioning, where I can take my data, and my KYC AML, and walk around to other groups, and be able to with confidence, be able to show that I am a reliable investor, and that I understand how this process works. So you know, that is something that’s missing today. And it’s great to hear you, again, talk about the investor fatigue, and now potentially providing the solution for that, because where what we’re going to be talking about in three years or five years is very different than what we’re talking about, oh, really no one this is going to be you know, right along those, those lines.

Oscar Jofre  59:25

We’ve always believed that. This is our thesis as a company, the whole market or private market is massive. But the the the scope of information we have is some less than 2% of the market. And all of us rate ourselves to that. And that’s all that was available. I get a DA was was available then, but now it’s changing. So but this one is larger. There’s so many different players in standard corn, there’s Elliot Chung, there’s all that and what we didn’t expect or we wanted to but you know, be careful what you wish for. We got it. The advantage we’re having at our company, is that we’re able to listen to all the different audiences. And what’s happening. The broker dealers are having challenges all this because they want to do it in a cost efficient manner. Right? They want to keep the cost down, so rightly so. And I applaud them for that. But now they’re discovering that everything they do has a ripple effect of consequence, right. And then there’s Andrew that wants it more efficient. So he can tell his clients, I brought in 10,000 hits, and, you know, 2000 invested in all that. But there’s the other part where we’re hearing is listening to the investor. And the investor is an interesting one. We thought it’d be millennials very adaptive. They’re not, in fact, the millennials, I’m not the majority of investors, the majority of investors is every day person in accredited. And they’re not just investing once, not just twice, they’re investing multiple times. And sometimes even in the same company. And yet, they have to go through it all over again. I mean, this is the so you’re right. It’s a so everybody’s it. I don’t think everybody’s in fatigue. But we’re now seeing it did was it there three years ago, maybe it was but nobody was paying attention to it just yet. Because people were just trying to figure out one side of it, you know how to get in. And then you know, slowly and slowly. So I The reason we’re talking so much about this is because it’s become a sector, a very important sector. And there are different techniques. Andrew and I did a whole session on all the different techniques. But all the different techniques go to the same three points of friction that you mentioned, getting them to the page, get them to take the action, the invest button, and then please, please fill out the button up. So now that we know that we didn’t know that, then we know that now we can take action as an industry. So yeah, this this is part of the dialogue, every webinar, I do I get something new. So thank you to all of you guys, as always. So listen, I mean, I love the conversation with the both of you, because you both come from different sides, but very similar at times. And it’s refreshing. And I know for most people, it’s very granular, but it needs to be. So I want to thank you both. Once again, any closing remarks, Andrew first, and then I’ll go to you, Elliott. Yeah,

Andrew Corn  1:02:26

I think that we’ve really hit on it. I mean, the title is, why is investor acquisition important? It’s because you don’t have a race without it. And then, you know, I’m hoping that people who have been listening, develop an appreciation for its complex. And yes, thank you that it’s not easy, and that it takes a lot of effort, not only from by, you can’t just wave your hand and hire a firm like mine and a broker dealer and think it’s done. There’s a lot of input, a lot of involvement from the issuer as well.

Oscar Jofre  1:03:00

Oh, yeah,

Elliot Chun  1:03:02

the thing I love to think about is not what the last three years has been. But let’s take a look at what the next three years will be. And the conversations that we’re having now, Oscar said 2%, recently, that number is going to grow as more and more success stories hit the market, it’s going to be painfully apparent to almost everybody that this area of growth, reg CF, RegA plus is the new investing. It’s not a frontier, because frontier signals early stage and not here and still emerging. It’s here today. And we’re excited because more and more investors will be investing through these types of structures. And we’re going to see some fantastic issuers come to market, not just this year, and not just the next year, but in the next three to five years. And and this is just an area of interest, innovation. It’s an area to align with your themes and your passions. And we look forward to being there with you every step of the way. You know, we’re all very approachable. We welcome conversations, so please reach out. And, you know, we look forward to talking to you more on these, as well as in three to five years when we’ll be talking a very different

Oscar Jofre  1:04:38

and thank you for that. And here’s, I’m gonna you touched on that 2%. So obviously, there’s 98% of the market that we haven’t seen. But I’m going to close this off with everybody the 2020 numbers just for reg CF and i and i it is saddened me at this moment that we don’t have it for RegA, but I’m going to give it just a one because to Elliott’s point, we didn’t have Have this visibility before. Now we do. What do we know 1100 companies raised just almost $429 million out of those 1100 companies of 229 actually raised $1 million 229. The average investment by company increased from 270 to $308,000. It 48 different states participated in investing 358,000 new investors came in to invest in these reg CF and there were 51 registered CF platforms. To me, I’m excited just by people go but those numbers are small.

Andrew Corn  1:05:42

When we started, it was small, it was zero, you can throw them all out the window with reg CF going from 1 million to 5 million. A whole new ballgame, I wouldn’t touch a reg CF a year ago today

Oscar Jofre  1:05:56

exam

Andrew Corn  1:05:57

couldn’t get my firm, you couldn’t pay us to work on one literal app and allow you to do it very excited by

Oscar Jofre  1:06:05

exactly, we need to do add reg CF, we need to add reg a and we need to bring the other ones as well. So people can see the whole scope of the private markets. What I’m trying to get at is that until we do, people won’t realize that there’s just as many good opportunities here. As it isn’t those venture back. I have nothing against venture back. But venture back is only 2% of the morrow

Andrew Corn  1:06:31

we’re working on some things that are going to rival publicly traded. So

Oscar Jofre  1:06:36

that’s it’s gonna be fun, we’re gonna have a lot of fun. We all had this, this was a very informative session for me. I’m glad you know, I would have picked your heads on it what you thought it was, but the three, the two of you came back with it, and it validated what we’ve always we heard it from them. We kept it quiet. We heard it from you now and you’re now indicating that’s part of the friction and ldu you thought it was number one and two, you just added another step to it. So looking forward to our next conversation piece for those that want more information. You can get a hold of Andrew or Elliot just simply go to KoreSummit.io and you’ll find all their contact details LinkedIn profile and email address. And of course the video will be available at YouTube KoreConX sorry KoreSummit.io Till next time, Elliot, Andrew. Thank you guys. I enjoyed this one. Take care guys. Thanks

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