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A Security Token for Full Lifecycle Compliance

ICOs suffer from disapproval from not only the SEC but also several media that have banned ICO advertising. This disapproval seems justified, since many of the ICOs had no business plans, no product, no service, no credible team, and no roadmap for generating value. Of the remaining well-intentioned ones, the problem of passing regulatory scrutiny for a utility token is insurmountable since it is a utility in name while a security in intent and form. The only way out is to re-classify it correctly as a security token.

The Responsible Approach of the KoreToken Security Protocol

The ERC-20 protocol and the concept of smart contracts are steps in the right direction for many use cases and great for many applications. However, for the financial markets, we need a protocol that can meet all regulatory requirements. We have taken an approach that originates solidly from securities law. We recognize the paramount need for safety, security, and risk management. We know all parties in a securities transaction must be protected at all times – these are the investors, issuers, directors, officers, lawyers, broker-dealers, transfer agents, secondary exchanges, and secondary token holders. There must be complete traceability and auditability.

Blockchain, in creating an immutable record, guarantees validity and (perhaps eventual) finality. However, this validity is technical validity and finality is the committing of the block to the chain. In the securities world, validity and finality means a lot more. Technical validity is necessary but not sufficient. Validity should include contractual validity and legal validity. Similarly, finality is achieved only upon authorized approval of transactions. KoreChain, our implementation of blockchain using Hyperledger Fabric, addresses this broader and more comprehensive definition of validity and finality. The KoreToken protocol and specification includes modular methods to implement various aspects of business validity and finality.

A Comprehensive Specification and Implementation

The KoreToken’s specification and protocol address the requirements for data and methods for the complete lifecycle of a security token. KoreConX will itself use this specification and protocol to create its own security token as well create security tokens for its issuers. The protocol includes data and methods that fall into three broad categories: public interface layer, business layer, and governance layer. The methods themselves can be invoked by participants in various transactions.

The execution of security transactions, from issuance to corporate actions to exit, cannot happen in a vacuum. Registered entities are accountable for knowing where these securities are, who are their holders, and the state of their compliance. More than issuing a protocol, KoreConX has taken the unique approach of providing a full operational platform as well as partnerships with other participants in the ecosystem such as broker-dealers and secondary market operators. KoreConX itself is an SEC-registered transfer agent, meaning that we can offer full custodianship services for securities.

The KoreToken architecture is modular, allowing security token designers to compose entire securities transactions and implement various use cases. The heavy lifting of blockchain functionality as well as business-related functionality such as event management, transaction management and process management are handled by the KoreChain.

Please see the following Executive KoreBriefing on The KoreToken Specification and Protocol.

We will release the detailed technical whitepaper shortly.

 

Introducing the KoreChain

The KoreChain is the first blockchain on a serious industrial-strength infrastructure that is focused exclusively on the complex world of global financial securities. The KoreChain is a permissioned Hyperledger Fabric blockchain. This gives it the native advantage of Fabric, a blockchain platform that has been engineered from the ground up for handling enterprise-class applications. KoreChain is implemented on IBM’s hosting platform since it provides the highest level of security as define by the US National Institute for Standards and Technology.

In electing Hyperledger Fabric to be the foundational blockchain infrastructure for KoreChain rather than Ethereum, we made a clear commitment to good engineering, enterprise-class architecture, and implementation with well-established tools rather than new and untested programming environments.

Hyperledger Fabric Strengthens KoreChain

The following benefits of Fabric come to us practically out of the box:

  1. Membership and access-rights management: The securities world has many complicated rules about data privacy, KYC, AML, need-to-know, etc. Some of these vary by region or by exemption rules. In addition to regulatory constraints, the platform also has to accommodate privacy conditions of participants in various transactions. Fabric provides this flexibility through channels.
  1. High levels of performance and scalability: Securities transactions are more complicated than point-of-sale authentication and authorization. While all securities transactions don’t require response and completion within seconds (as, for example, in trading), the sheer volume of multiple transactions and subsidiary events in capital markets requires a robust infrastructure that can stand up to spikes and also support secondary trading.
  2. Security and safety: The combination of Hyperledger Fabric and the hosting infrastructure at IBM provide a protected environment that includes end-to-end cryptography and the highest level of security defined by the US National Institute of Standards and Technology (NIST), the level 4 of FIPS 140-2, that includes, for example, Hardware Security Modules.

KoreChain’s Specialized Capabilities

In addition to these, KoreChain provides a number of specialized capabilities such as several layers of artificial intelligence, event management, and transaction management for securities.

All this makes the KoreChain an industrial-strength engine for KoreContracts, which are true smart contracts for financial services. One special category of KoreContracts is the  KoreTokenContract, which is the fundamental template for KoreTokens. The KoreChain is carefully designed to ensure a safe and secure environment for security tokens and their management throughout their entire lifecycle, including provision for various corporate actions.

More on these exciting developments in subsequent blogs and articles!
Please see the following introductory Executive KoreBriefing on What is KoreChain?
We will release the detailed technical whitepaper shortly.

Capital Raising “Capital markets point of view” dealer

For private issuers, raising capital is the next natural step once you have exhausted other traditional forms of financing. It becomes even more enticing when you read about other firms doing it, and thinking why shouldn’t that be us.

However, being prepared to take the issuer to the next level can be a source of frustration if you’re not ready for it. Nobody is willing to just hand out money; you have to make a convincing case based on fact and incomplete due diligence documentation can leave you out in the cold.

Issuers must prepare comprehensive information which covers who the guiding minds behind the issuer are, who the current shareholders are, business continuity planning, company financials, what is it that makes you unique and a comparison with competitors in the same industry.

Dealers are bombarded by people who claim to have the next best thing, but if you can’t boil it down to facts and figures, they won’t spend much time looking at you. Using up to date technology to gather all the corporate information is critical to your success. Using a platform to house your cap table management, minute book, financials, investor relations and corporate data in electronic format means you can walk into a meeting prepared for whatever they throw at you.

For dealers, having a platform whereby issuers can login and input all the relevant information that you need from them, allows you to control the process and weed out the unprepared ones before you devote a lot of time to analysing potential deals. A controlled mechanism whereby issuers know what information they need to provide and where to put it, saves everyone significant time and effort.

Taking it one step further, for registered dealers to have the ability to easily showcase their approved products online, along with pertinent information about the issuer – corporate biographies, financial information, information about the proposed raise –  helps dealers to bring their proposed offerings to potential investors. From a compliance perspective, it means having all of your due diligence in one place, for when the regulators come to visit.

Taking it two steps further, for investors to b able to view potential offerings, input their Know Your Client (KYC) information to determine their eligibility, answer questions to determine the suitability of the investment, have the platform conduct the necessary AML checks and then provide an efficient method for payment, once approved by the CCO, and you have an efficient and cost effective ecosystem which helps issuers, dealers and investors communicate.

KoreConX has an all-in-one platform to accomplish this and ensures that all parties are acting in compliance with securities regulations. Issuers can effectively connect with dealers who in turn can connect with investors all while ensuring that they have the necessary KYP/KYC processes and documentation in place, should they get audited.

What is Investor Relations for Private Companies?

While Investor Relations may seem like an all-encompassing term referring to the relationship between investors and the company that they invest in, in practice the definition is more precise.

Investor Relations professionals are tasked with providing investors with up-to-date information on company affairs, so that private and institutional investors stay informed on the goings of companies.

Considered to be a sub department of Public Relations, Investor Relations works to create holistic and financially beneficial communication between investors, shareholders, and the general financial community.

Investor Relations professionals’ are always aware of the key corporate information including in depth knowledge of the product and services offerings, the latest updates on the company’s operational and financial performance, as well as its key performance indicators.

This information is then compiled and presented in a coherent manner so that investors understand how well the company is performing. A description of the company’s financial statements, financial statistics, and an overview of the company’s internal organization is made available to investors. This helps to paint an accurate picture of the company’s private internal workings.

Two-way communication, as opposed to a one-way flow, is essential to investor relations in the modern economic climate that is characterized by periods of high volatility.

Investor Relations has been equated with full disclosure – where only important or relevant information is shared with shareholders. But that is no longer the case.

With the rise in popularity of Alternative Finance Platforms like regulated equity crowdfunding, investors now want, need, and expect so much more: consistent and honest communication between companies and their shareholders. In other words, they want to see full transparency.

It is the responsibility of Investor Relations professionals to integrate finance, communication, marketing, and securities law compliance to enable effective communication between the company and relevant parties.

Why is communication so important? Through transparency, investors are able to get a grasp of the true value of a company’s business. Therefore, the primary goal of Investor Relations is to help investors understand true value of the company and its key performance indicators.

For Investor Relations professionals to be efficient and effective today, they must employ a number of tools to accomplish the above goals and achieving effective two-way communications with investors.

  • Excel sheet to manage shareholders/investors
  • Sales automation tool
  • eMarketing tool
  • Meeting Planner

Time is wasted in trying to combine the data from each of these fragmented tools. KoreConX solves this problem by providing Investor Relations professionals one tool to do what normally takes more than 4. Register today https://bit.ly/2izdVf7

Overview of the features the IR Module will include:

  • Manage Current Shareholders
  • Manage Potential Investors
  • Provide free Portfolio Management tool for investors
  • Meetings (AGM, Shareholders Meeting, One-on-One)
  • Reports (Monthly, Quarterly, Annual, Information Circular, Proxy)
  • Media Releases
  • Social Media
  • eVote (ability for your shareholders to vote online)

and much more

Here is what IR professionals are saying:

“I have been providing investor relations services to private and public companies for 2 decades, and for the first time I’m seeing a tool, KoreConX IR Module, that provides me everything I need to manage shareholders, meetings, reporting and media releases through a single dashboard. This is the tool for every person working in an IR position today.” Kai Blache Investor Relations Professional, Digitz, Cray Pay, TicketSocket, Slyde

Register to pre-launch program. https://bit.ly/2izdVf7

StartUp Law 101

Late last year I had the opportunity to collaborate with Catherine Lovrics, B.A., LL.B at Bereskin & Parr LLP, on the inner workings of raising capital for entrepreneurs. Her book, Startup Law 101: A Practical Guide, published last week.

The basis of our conversations surrounded accessing funding at the right time and identifying the the business expenses that are needed most, from capital expenditures to operational costs.

As part of a panel discussion during last Wednesday’s launch event hosted at MaRS Discovery District, I was asked several great questions about funding that I wanted to discuss further.

Q: Securing funding for early-stage companies can be the biggest challenge for founders. What are some of the opportunities that have developed recently in the equity crowdfunding space for early-stage companies?

A: Without crowdfunding, the ability for early stage companies to access capital would not exist in such high numbers.

The emergence of online platforms helping private and public companies access capital from accredited and non accredited investors has literally transformed the investor landscape.Today’s private capital investor can invest as little as $50.00 into a company.  This was not possible five years ago.

Part of this transformation includes the addition of online payments. It has not only increased the speed in which an investor makes a decision to invest, but has changed the perception of how an investor views an investment. All an investor has to do is enter a credit card number using their VISA, MasterCard, American Express, etc.

With this new dynamic, companies need to have a very proactive approach to their new stakeholders.  Your investor relations strategy and tools will be the key to maintaining and growing your company.

Q: What are some of the major changes and challenges we’re seeing in equity crowdfunding?

A: The biggest challenge globally in equity crowdfunding is that companies are not ready.  We see 98 percent of companies stall in their funding process when they engage in online platforms to help startups raise capital.

What companies don’t understand is that nothing has changed from the days of applying to Venture Capital firms, Angel groups, etc.  Sites like like StartEngine, FrontFundr, BankRoll Ventures, MicroVentures, etc., expect you to have your company and critical business documents in order.

The largest barrier and one of the major delays is the lack of up-to-date corporate records. Make a checklist — update your corporate records, capitalization table, signed agreements, legals for the offering, business plan, executive summary, financials, projections, etc.

Q: There has been a lot of buzz this past year with the rise of cryptocurrencies and ICOs. What are we seeing now with the regulation (and potential demise) of ICOs and the rise of token offerings or ITOs?

A: In 2017, we saw the rise of crowdfunding v3.0 with the introduction of Initial Token Offerings (ITO).  For many in crowdfunding, ITOs have proven that people will invest from around the globe if they trust the underlying technology that is managing their investment, i.e. blockchain.  

Out of the gate, many companies took advantage of this type of capital raising and many investors lost billions of dollars. Like any new form of technology, it can be used for good and bad.  

We will see a rise of security token adoption in 2018 as companies begin issuing tokens like selling securities. But, these tokens will also have the capability to trade on secondary exchange.

This just scratches the surface of what we covered and Catherine was generous enough to provide a copy of Chapter 6, “Canadian Startup Funding Sources” for KoreConX followers.

Today Investors Want

The internet changed everything when it was first introduced but it has not been until now that Broker Dealers, Exempt Market Dealers (EMD) are playing catch up to what clients expect from them.

Investor want this today:

They ask for all this because in other parts of their daily lives they are doing their tasks from the comfort of their home.

For Broker Dealers, EMD’s it’s important to not overlook what clients want from a financial services company in today’s market.

What is Portfolio Management?

Anyone that invests in more than one company or investment asset has a portfolio of investments to manage. With global markets opening up and alternative finance platforms such as P2P (Peer to Peer) or Equity Crowdfunding platforms we are seeing a variety of new investments in private companies becoming available to non-accredited investors (non high net worth investors) and accredited investors. Portfolio management isn’t just for the financially savvy accredited investor types, but rather for anyone who invests their money in hopes of making a future return.

For those rainy days, you want to make sure your investments are all kept in check. A portfolio is a collection of these investments . Your portfolio might include investments in shares (including options and warrants), bonds, loans (including convertible debentures, promissory notes), assets, mutual funds and cash.

Portfolio management is not just about managing the amount and types of investments, but it should also provide you the documents, reporting, schedule of shareholder meetings, news and updates from the companies you have invested in. Typically most investors do this in one of two ways: by hiring a portfolio manager who will then charge fees based on the total investment; or the investor manages their own investments using word, excel, and some form of document storage.

There are numerous benefits to working with a portfolio manager. Fiduciary responsibility often tops that list. These managers have a fiduciary duty to act with care and good faith, always keeping in mind the best interest of their clients. However, the vast majority of people don’t use a portfolio manager because they are not economical, they don’t deal with private company investments, or the investor prefers to manage their own investments. The Alternative Finance sector is evidence that more and more people investing in private companies and this type of investment is something that is not normally managed by the traditional portfolio managers.

Until recently, investors have lacked useful tools to manage and track their investments, forcing them to use Excel and filing cabinets. As you can imagine, this is hard to track and manage manually.

A whole new do-it-yourself mentality has people looking for new ways of doing things. With advances in Fintech, Alternative Finance, Crowdfunding, etc. you are seeing more and more pressure to develop efficient online solutions. There are many great advances and new technology solutions being created to assist people in tracking and managing information, and the Portfolio management sector is no different.

Managing your assets can be complicated. This is why we at KoreConX developed our all-in-one business platform with the investor in mind. Recognizing that there are not any good tools for investors to use to effectively manage their private investments, coupled with the new do-it-yourself mentality, we developed a simple to use and FREE Portfolio Management platform. With the KoreConX platform you can manage your investments in private companies whether they are shares, debentures, options, warrants, promissory notes, SAFE’s or Crowd Safe’s as well as all the documents, reporting, voting, news releases and company annual meetings associated with those investments. Through KoreConX you always stay connected to the company you invested in and always have access to your investment documents.

Hiring in the Securities Industry: What you Need to Know

Hiring a new employee can be challenging in any environment, but it’s even harder in the securities industry.  Employee not only have to be the right choice for the firm, but they must also pass muster with the securities regulators who approve registration. In reviewing an application for registration, the regulators focus on three key aspects: proficiency, integrity and solvency.

PROFICIENCY

Securities legislation requires applicants to have the proper education, training and experience in the particular category in which they are applying. Dealing Representatives (DRs) of an Exempt Market Dealer (EMD) must have completed either the Canadian Securities Course (CSC) or the Exempt Markets Products Exam (EMP). There is no requirement to have any previous work experience, just the course completion. If registering through a Portfolio Manager (PM), Associate Advising Representatives (AARs) must have or complete:

  •    CIM or CFA designations; or
  •    CFA’s Level I Exam and 24 months of Relevant Investment Management Experience (RIME)

Advising Representatives (ARs) must have either the CIM and 48 months of experience, or the CFA and 12 months of experience. The course requirements are straightforward in that you either have them or you don’t; interpretation comes into play when examining a prospective employee’s work experience to determine whether she has the relevant experience.

RIME

Relevant work experience is composed of the ability to perform research and analysis, and apply it to portfolio selection. The firm must evaluate a potential applicant’s experience in light of the regulations. Here are some tips for applicants.

  •    There’s a difference between industry experience and RIME. Having worked in corporate finance or as an analyst does not necessarily mean the candidate meets the requirements. For someone like this, regulators may only approve the applicant as an AAR until she gathers the necessary portfolio selection experience.
  •    Letters of recommendation are required from previous jobs. Regulators require letters of confirmation from former supervisors to back up any claims the candidate makes about past experience. This ensures whatever information is filed on the National Registration Database (NRD) is verifiable.
  •    Candidates must apply for registration within 36 months of having taken the necessary courses from when they were last registered in a relevant category, or have 12 months of relevant experience within the last 36 months to maintain the validity of their courses.
  •    There are exceptions. Regulators may entertain exemption applications if the applicant’s industry background does not meet the rules as they are written. But, while many years of relevant experience may make up for a lack of courses, no amount of extra book knowledge can make up for a lack of work experience.

INTEGRITY

Regulators expect that a registrant will act fairly, honestly and in the best interests of their clients—so they must assess the integrity of applicants. This means asking whether the person has ever been investigated by any regulatory body, or been subject to any public proceedings. They also want to know whether she has been involved in any criminal or civil proceedings.

All this information is reviewed in light of assessing the applicant’s character. Further, applicants must disclose whether any non-securities regulators, such as FSCO for insurance and mortgage brokers, regulate them.

This forms part of an applicant’s disclosure about her outside business activities, which may impact how she deals with her clients and the investment recommendations she makes. This includes if she serves on the board of directors of any company, or if she has any other type of relationship with an affiliate.

SOLVENCY

Applicants must reveal on NRD whether they have ever declared bankruptcy, insolvency or are subject to garnishment.

Regulators use this information to assess an applicant’s financial condition. This forms part of the overall process to assess an individual’s suitability for registration, as someone who has had financial problems may not be suitable for registration. Having had this occur does not automatically disqualify someone from being registered—regulators understand that personal events, such as divorce, may lead to bankruptcy. It may simply mean that an individual may be approved but require closer supervision by compliance.

When hiring, a firm obviously wants to employ individuals who will be a good fit, do their job effectively and help the company succeed. However, compliance should be involved in the process by conducting background checks and reviewing an applicant’s education, experience and overall fitness for registration. A firm doesn’t want regulators to unearth problems in the applicant’s past, so make the decision as straightforward as possible.

Proficiency Requirements

Securities legislation is quite clear on what courses and designations you need in order to register in the various categories, but what relevant experience is sufficient is less clear cut. No matter the category you are applying under, the regulators must determine than individual is fit for registration. They look at the proficiency of the individual based on their education, training and whether they have the requisite experience to meet the requirements of the particular category of registration. They also look at an individual’s integrity regarding outside business activities, potential for conflicts of interest – anything which may impact an individual’s ability to deal in the best interests of their client. They also look at the solvency of prospective registrants; a bankruptcy does not automatically disqualify you, but it could.

As for the proficiency requirements, to be a Dealing Representative of an Exempt Market Dealer, you must have completed the Exempt Markets Products Course or the Canadian Securities Course; there is no experience component required. The requirements to be the Chief Compliance Officer have become more stringent, along the lines of other categories of registration. The CCO must now have 12 months of relevant securities experience which includes the training and experience to perform the tasks required of a CCO, such as implementing and maintaining an effective compliance system.

There are only three categories of registration for individuals of a Portfolio Manager: Associate Advising Representative (AAR), Advising Representative (AR) and the CCO. To register as an AAR, you need to have completed either the first level of the CFA program or have achieved the CIM designation and have 24 months of Relevant Investment Management Experience (RIME). AAR’s can meet with clients and can make specific investment recommendations to clients but must be supervised by an AR. The most common qualifications for an AR are the CFA Charter and 12 months of RIME or the CIM designation and 48 months of RIME. The CCO must qualify as an AR and have completed either the PDO Course or Chief Compliance Officers Qualifying Exam.

Where things become less clear relates to exactly what can be considered Relevant Investment Management Experience; this is open to interpretation. Typically, it is made up of the ability to conduct research and analysis of securities in the context of portfolio selection and the ability to manage investment portfolios on a discretionary basis. Just because you have worked in the financial industry does not mean that all your experience is pertinent. You would need to show that you can conduct independent analysis of securities and then be able to create a portfolio according to clients’ needs.

There are many instances where individuals do not qualify, such as someone who works in corporate finance performing take-over bids and mergers and acquisitions. Their ability to conduct securities analysis may not be questioned, but the ability to apply it to portfolio selection is difficult to prove. Registered Representatives of IIROC firms do not typically qualify because although they do make specific investment recommendations and do construct client portfolios, many are limited by their firms to specific model portfolios, which may not involve the in-depth analysis the regulators require. MFDA Representatives also usually do not qualify because they are selling pre-packed products which do not involve the necessary analysis. However, each application is reviewed according to the information provided by the applicant so it is important to highlight relevant experience showing your activities in this field.

For those individuals that do not have the necessary courses to neatly fit into the requirements, there is the possibility of filing an exemption application. However, you would have to have many years of relevant experience to make up for the lack of book knowledge. A simple rule of thumb is that enough experience can make up for a lack of courses, but no amount of courses can make up for a lack of experience. In applying to be registered under a Portfolio Manager, the regulators do ask for letters from former supervisors attesting to your past activities and should match what you have put in your application, so always leave your past employers on good terms because you will need their support when seeking registration.

The Death of the ICO and the RISE of #TAO

The term ICO has been very confusing to the investing market, even those selling ICOs have no understanding of it — when you start asking questions people give you a look like a deer caught in headlights. So, what does ICO stand for?

#ICO = Initial Coin Offering

COIN = CURRENCY = MONEY

The most famous coin in the world is the “Bitcoin” there are many others but it’s the one that started it all.

So, the question is, of the 254 registered ICOs how many of them are COIN offerings vs TOKEN offerings?

Over 90% of the ICO’s in 2017 were actually Initial TOKEN Offering (ITO) but in a frenzy the term did not catch on and the market got misled creating confusion between tokens and coins.

Maturing through 2018:

With the banning of ICOs by Facebook and more organizations to follow, the term has become tainted creating both a perception and image issue.

For companies who are going to launch their TOKEN offering then it’s time for the market to be informed properly of what you are doing. Take the first step.

Education

There are two types of TOKEN Offerings and you must clearly identify this. The market has awaken and you can no longer afford to play coy with the market.

Utility Token

(use the term ITO “Initial Token Offering” to reflect your offering, the purchasers of your token will automatically know what you are selling and what to expect)

AND

Security Token

(Use TAO “Token Asset Offering” or STO “Security Token Offering” this will help investors understand the investment opportunity you are presenting

2018 is the year of the TAO and companies like FileCoin, and KodackCoin have shown that the market is ready and prepared to invest in these tokens that are properly structured and articulated to the market.

Product Due Diligence (Company/Issuer)

Dealing Representatives are only allowed to sell products that have been approved by the Chief Compliance Officer (CCO) — and only after they’ve been trained on a product features, risks and costs. Depending on your firm’s size, product due diligence may be performed by the CCO herself, or by a dedicated corporate finance team.

Here’s how you can supplement your firm’s process.

  1. STICK TO WHAT YOU KNOW

It makes sense to only look at opportunities that fit in with your expertise. If you are expert in mining, it is unlikely that you would be in a position to effectively evaluate the future prospects of a technology firm. If the investor in interested in a product that you don’t understand, you have a responsibility to turn them away or refer them to a qualified colleague.

  1. ASK WHO’S BEHIND THE PRODUCT

A product is only as good as the guiding minds behind it. Research who they are, where they’ve worked and how their experience applies to this venture. You want to do business with a management team that has the necessary expertise and a proven track record.

Also, look for potential conflicts of interest. For instance, if you’re vetting an exempt product, you may want to avoid a car part manufacturer that receives services from a related company (i.e., both companies are owned by the same people). That manufacturer may not look for the best deal on services if management receives compensation on both sides of the deal.

  1. SCRUTINIZE THE PRODUCT ITSELF

Examine the investment’s features to determine whether the product’s structure is overly complex and whether there is sufficient transparency in the product’s disclosures. What are the expected returns and do they make sense given the risks?

You’ll also need to determine the risks to a profitable outcome. This is particularly important when examining an illiquid product, which will offer few opportunities for selling if the investment does not perform as expected.

To do so, look at internal and external factors: if the CEO dies, are their qualified people to take over? If the first product prototype fails, does the company have enough cash to try again? If the Canadian dollar goes up, how would that impact the firm’s operating costs? If you recommend this product to a client, could they lose the full investment?

You also have to look at where the product is situated within its industry. Does the firm have something to offer that no one else does? Why would you choose this investment and not another one? You also have to ensure that the product issuers are abiding by their regulatory obligations regarding appropriate disclosure in their offering documents. Depending on the nature of the product, they may need to produce audited financial statements, file exempt distribution reports on a timely basis and have their marketing material conform to securities legislation. The type of product and how it is distributed will determine what sort of filings have to be done and whether or not they’re public. However, as part of the due diligence process, the issuer must be willing to share whatever information is necessary for you to make an informed opinion on the suitability of the investment.

  1. PUSH FOR BETTER ADVISOR TRAINING

Your firm should be able to provide detailed information to prospective clients about the product and teach you to do a suitability analysis. The training should include specific information about the features, risks, and costs associated with the investment. It should also explain what differentiates this product from others available. The compliance department must document who has attended the training and when, and include copies of the presentations in those people’s training files.

Having a compliance platform in place to manage both KYP and KYC, as offered by KoreConX, will help you to manage your due diligence process. All firms inherently do due diligence as part of their business activities, but one must be able to document each step in the process to show why one particular investment was favoured over another.

Wild Wild West of ICO’s time to move over, Regulated ICO’s are coming (#TAO)

Those that can remember the wild wild west of crowdfunding back in 2010-2011 will have a feeling of dejavu seeing the 2017 ICO market take off.  Not that crowdfunding ever saw the numbers that we are seeing in the ICO market, but that is because the securities regulators stepped in early when crowdfunding launched in order to protect the market.

What ICO’s are demonstrating, that crowdfunding never had the chance to, is the global willingness of investors from a variety of countries to invest in all sorts of early stage companies.  The main reason here why ICO’s are having success where crowdfunding did not comes down to the underlying technology, namely “Blockchain”.

ICO’s have demonstrated that investors are willing to invest in companies anywhere in the world.  Traditionally, it was believed that investors like to only invest locally.  This local investing premise has been the driving force behind the success of Silicon Valley and other hot spots where companies and local investors meet.  

So what is different with ICO’s?  It is mainly due to the underlying Blockchain technology that brings TRUST to investors/contributors who immediately get a token in exchange for their contribution.  

According to the cryptocurrency statistics website Coinschedule, a total of 235 ICO’s have raised over $3.7 billion in 2017.  There does not appear to be any slow down in this market as this seems to be the new flavour for companies raising money.

Going forward what does it mean for investors and issuers alike who are preparing for the opportunity of utilizing an ICO as a way of accessing capital in 2018?

The wild wild west of ICO’s is now done and the days of fluff whitepapers, will not be enough to get your ICO off the ground.  Going forward companies will need to comply with full disclosures, managing, directors, agreements, compensation, financial statements, etc

So where to start:

I won’t go into the merits of which type of token you want to offer: utility or security.  This article will be solely based on Regulated ICO, Security Token, or TAO (Token Asset Offering) in the USA and Canada for companies, investors and platform operators.  But I strongly believe that most global regulators (as we are seeing more and more) will be regulating ICO’s as securities.

What is a Security Token, Regulated Token, or TAO?

The main characteristic of all of these that is important to understand is that they are subject to securities laws.  The token has to be sold through a securities exemption to allow the investor to purchase and sell the token in a secondary exchange.

It’s very important to understand the exemptions you will use to sell your Security Token as each one will have different qualifications and rights to the investor who is purchasing your token.  This is outside of the workings of your token, these exemptions must and should be applied using a smart contract to protect the company, investor and platform who are all part of the crowd sale for the Security Token.

For the pre-sale stage of your Security Token companies are opting for issuing a Simple Agreement For Future Tokens (“SAFT”) to investors, this allows the company the time to build out its protocol and issue the token to the general public under the securities exemptions they will use.  The SAFT was created by one of the leading authorities in the USA Marco Santori at Cooley LLP.  

What is a SAFT?  Simple Agreement for Future Tokens

As outlined in the article, SAFTs are designed to be sold to accredited investors as a means of funding development in a way similar to the way equity changes hands in traditional venture capital. In a SAFT sale, no coins are ever offered, sold or exchanged, rather, money is exchanged for traditional paper documents that promise access to future tokens.

Now we have the framework so let’s look at how investors, companies and platforms operated by dealer can participate in these Security Tokens.

USA Investors, Issuers & Platforms

USA has two main exemptions that investors must fall under in order to invest:  

  • Accredited Investor (AI) 506(c) Reg D

Any accredited investor (AI) who qualifies under the regulations can invest any amount and purchase Security Tokens from any qualified issuer.  The AI will have the ability to also sell and exchange their security token in a secondary security exchange like Overstock Tzero.  Filecoin raised US$150M utilizing this exemption with a SAFT.

  1. Non accredited Investors RegA+

This is for everyone else over the age of 18 who can now invest in companies and also have the ability to purchase Security Tokens.  For companies who have used this exemption it has allowed investors after a 4 month hold to sell their securities in public stock exchanges.  For the same to occur in token’s a new exchange will be required to able to sell or purchase these tokens.  

For companies based in the USA you have two exemptions under which you can sell your Security Tokens.  For non USA based companies you can only used the AI exemption unless you are a Canadian based company in which case you are allowed to use the RegA+.

Canadian Issuers & Platforms

Canada is similar to the USA in that it has two exemptions that can be utilized by investors:

  • Accredited Investor Exemption

Similar to that of the US, and many global jurisdictions, AI’s can invest in private companies.  Any issuer, Canadian or not, can use this exemption to raise money from AI’s in Canada.

  1. Non Accredited Offering Memorandum (OM) Exemption

Canada offers two types of non-accredited investors under the (OM exemption).  Anyone over the age of 18 (with limits) can invest and purchase securities and Security tokens but they are not able to resell them on any secondary exchange.  

Any issuer, Canadian or not, can use this exemption to raise money in Canada.  Issuers can use the OM to sell their tokens to investors which allows you to reach everyone over the age of 18 who can invest as low as $100.  So this exemption gives you the ability to reach the masses.  Any investor who purchased a token under this exemption there is no liquidity, you cannot take his token to an exchange to trade.

Summary

For issuers you need to understand the exemptions that you can use and how it will impact your investors.  For companies based in the US and Canada, you must follow these exemptions to make sure you are not offside with securities regulators.

For issuers from outside of USA and Canada, you need to understand what investors you might be able to sell to and what your regulatory requirements are for accepting that investment in your Security Token.

The best exemption at the moment in both countries and globally is the AI (accredited Investor) exemption. This exemption allows the AI to take their token to a secondary exchange and sell it to another AI.

2018 first company to announce a Security Token is KodakCoin who has also made a follow on announcement that it will list its coins on TZeros secondary exchange for Security Tokens.  

As you can see the emergence of Security Token is already happening so it is time to get your company ready for the new wave – Security Tokens ( #TAO ).

Investor Relations Hashtag #IRPrivate

I know what you are thinking, why on earth do a blog regarding a hashtag.  Clearly everyone knows what Investor Relations (IR) is and how to find it.

I felt that it was time to launch a new tool to find information about private companies online for 2018.

Like any good article I wanted to make sure it had the two elements:

The Problem
Yes it’s true globally we all know the term Investor Relations (IR).  Most companies hire an IR professional internally or externally to perform investor relations functions.  The problem is when you go online and start searching on google, twitter, facebook, and LinkedIn and you search for IR, all you get is IR for public listed companies.  The hashtags they have are all about public listed companies.

2nd part to our problem.  
With the emergence of online investing also known as “Equity Crowdfunding and ICO’s” these private companies conduct themselves like public companies

Although these companies are still private, the tools and strategy that you would apply to public listed company does not work with private companies.

Private companies have one great advantage over public listed companies and that is they know all their shareholders.  Each shareholder is directly connected to their company unlike listed companies.

The industry is maturing and more companies are understanding the value of having the appropriate strategy, resources and tools for performing their IR strategy.

We are also seeing a convergence of IR professionals leaving the public listed companies to take their experience and apply it to private companies.

More investors today are investing in private companies and private companies need the guidance, strategy, resources, experts and tools to be able to deliver.

The Solution
The private companies need a way to be seen and filtered separately from the publicly listed companies.  The introduction of this new hashtag will help the industry, media, journalists, investors and market at large.

Today private companies, professionals, service providers, etc.. can use the hashtag  #IRPrivate

Looking forward to seeing the activity of private companies using the hashtag and those who are engaged in providing services, tools, etc to private companies.

Happy Investor Relations #IRPrivate

2018 The year that Private Companies enhance their Investor Relations (IR) efforts.

The Good, The Bad, and the Confusing Messaging

Think of yourself standing in front of a room full of strangers, about to give a speech on particle physics.  You don’t know if they are experts on the topic, or know nothing at all.  You don’t know what their interests are, what they think you’re going to tell them, what they want to hear about, or even what language they speak.  What if, on top of that, there were rules about how and when you could speak to them.  How would you make your case?  What would you say?  How would you make sure you’re understood? Would you try and say anything at all?

This is the issue most companies face when it comes to shareholder communications. When I began researching this article, it initially seemed that discussions about shareholder communications and tactics only happened during proxy season, or the time of year when most companies hold their annual shareholder meetings.   There’s volumes of material analyzing proxy season trends, pointing to spikes in engagement at that time.

But even these discussions recognize that the shareholder relationships are evolving, becoming more involved.   Increasingly, the powers that be in many organizations are beginning to appreciate the need for proactive shareholder communication, and directly engaging year-round.  If communications are reactive only, then boards and management are opening themselves up to risk.  Shareholders are interested in transparency and being actively engaged by the companies they have invested in.  56% of S&P 500 companies disclosed engaging with investors in 2015.  This is up from a mere 6% in 2010.

Larger companies establish strict parameters for information flow, drafting Shareholder Communication Engagement Policies detailing who, what, when, where, how, and why.  The goal of such policies is to ensure transparent, accurate, and open communications that lead to good governance, and they reveal a slowly shifting perspective on proper governance, and what it means to be a good corporate citizen.  They’re often publicly available to review, and easily searched.

Investors are wary of engagement for engagement’s sake alone, but the fact remains that transparency, quality of communications, and building in mechanisms to keep shareholders in the loop are measures essential to not only reducing the chances of shareholder activism and risk, but also improving overall relations, and creating good will.

Case in point, there are volumes of conversation around what best practices in Investor Relations are.  Under some definitions, these are practices most widely adopted because they minimize possible legal compliance issues, and are standard practice, but investor relations is multifaceted, as is the related discussion.

When Vanguard announced it would urge the boards of companies it’s invested in to  found a Shareholder Liaison Committee in December of 2014, it sparked a conversation about shareholder-director communications, and the idea that directors can and should be shareholder advocates, according to Edelman.  It marks a departure from the, at times cozy, relationship boards have had with management in the past that has left shareholders in the dark, and out of the conversation.  Often the purview of management alone, boards have been hesitant at times to add their voices to the conversation for fear of creating a conflict, but how can they be effective spokespeople for their shareholders if not involved in the dialogue?

What is obvious is that in the age of information gluttony, engagement is unavoidable, and when done right, extremely beneficial.  Over the course of this series on Shareholder Communications, we’ll dive in depth into best practices, dos and don’ts, regulations, trends, and pitfalls of silence.

Compliance Review

Compliance Review

Compliance reviews by regulators follow a prescribed format depending on what has triggered the visit, whether a full compliance review, targeted review or a for-cause review based on information that has come to their attention. But, during any type of review, there are certain deficiencies that are more significant than others. Here’s what regulators look for.

  1. STRENGTH OF COMPLIANCE SYSTEMS

Many firms go through the whole registration process, and still don’t have a solid compliance system in place. This includes: detailed written policies and procedures that actually reflect what the firm does and how it operates; and all staff having ready access to it. Firms must devote sufficient resources to compliance based on their size, complexity and potential for associated risks. Firms can’t expect advisors to do the right thing without giving them specific written rules. These should include how to gather KYC information, explain the products available, what documentation is required, marketing rules and general employee conduct. The Chief Compliance Officer must, on an annual basis, also produce an annual report to the board assessing how the firm is complying with securities legislation, including any deficiencies and how they’re being addressed. Regulators will read this report to get an idea of how seriously the firm takes its compliance responsibilities.

  1. DEALING WITH CLIENTS IN OTHER JURISDICTIONS

Advisors cannot deal with clients in other provinces unless they’re registered there. If your client moves to another province, then the mobility exemption will allow you to continue dealing only with those types of clients, with certain restrictions.

For those clients who live outside of Canada, you have to ensure you meet the registration requirements of the foreign jurisdiction. The rules vary greatly from country to country, and regulators will expect you to have taken steps to confirm you’re not contravening foreign regulations. Their view is that if you contravening the regulations of another jurisdiction, then you are not taking your compliance responsibilities seriously.

  1. OUTSIDE BUSINESS ACTIVITIES

Advisors must disclose all OBAs on the National Registration Database (NRD) and detail what policies are in place to mitigate the potential for conflicts of interest. This disclosure includes items such as: if you’re licensed to sell insurance; have a holding company; coach junior hockey; and are involved in a charity or a religious organization. It’s best to over-disclose to ensure you’re not accused of hiding anything.

Regulators will review OBAs to determine whether you’re using your position unfairly and to the detriment of the client. This is particularly important when you are promoting a product from a related issuer as many EMDs do. You have to be extremely careful to show that, even though you have a vested interest in promoting a particular issuer, you are still acting in the best interests of the client. A fulsome suitability review and backup notes must explain why the investment was appropriate for the client. This includes a detailed KYC form containing information about the client’s current financial position, their objectives, investment knowledge and risk tolerance. In recommending a particular product, advisors need to explain in writing what makes this investment appropriate, as opposed to similar products. Simply ticking the boxes on the KYC form does not demonstrate that you have had a meaningful discussion with a client.

  1. DELEGATING KYC AND SUITABILITY TO A THIRD PARTY

In some firms, relationship managers, account executives or other third parties fill out KYC forms. Regulators have repeatedly stated this does not conform to registration requirements, nor does it ensure that an advisor will deal fairly, honestly and in good faith with a client. The view is that these third parties are not qualified to have the type of meaningful conversation that a registered individual needs to have to determine the client’s financial needs. Further, it doesn’t give the advisor an opportunity to explain the firm’s investment strategies and what the client can expect. This leads to client confusion about who is actually managing her account, and leaves an advisor open to claims that certain investments were inappropriate if the KYC is deficient. So, you must make every effort to meet clients face-to-face. If that’s not possible, at least speak to each client via phone or email. And ensure compliance doesn’t sign off on an application until they’re confident the client information is accurate and investments are suitable.

  1. SELLING SECURITIES TO NON-QUALIFIED INVESTORS

The current rules surrounding distributing prospectus-exempt products can be confusing and don’t easily apply to clients’ real-life situations. However, if an advisor cannot clearly show that a client qualifies as an accredited investor, and that the investment is suitable, compliance has a duty to reject the trade. You need to ask detailed questions and take copious notes to explain the client’s financial position, and why you’re recommending a particular investment over another. The sale of securities to non-qualified investors is a serious breach of securities legislation, and can lead to having your registration terminated, the trade being unwound and even the firm’s registration being suspended.

A compliance review can be a useful tool to determine how effective you are in adhering to securities legislation. Perform an internal review, which includes an annual review of your policies and procedures manual, all NRD profiles, and a random sample of client accounts. Having a compliance platform in place to manage both KYP and KYC, as offered by KoreConX, goes a long way to preparing your firm in case the Regulators come knocking.

Happy 2nd Anniversary KoreConX !

We are so excited to be celebrating the 2nd year anniversary of the KoreConX all-in-one business platform launch.  It’s amazing how fast the past 2 years have gone by.  We have made friends all over the world who have shared their stories of how they use KoreConX to manage their investments with our Portfolio Management tool and how managing their companies corporate information is so easy.

We want to thank you for making our journey an amazing one and to let you know we are just getting started.   Our goal is to help the millions of companies around the world, and their stakeholders, to better manage, organize, share and communicate their information.

To achieve our goal we provide a free all-in-one business platform that provides (among other things):

  • Structured file management with access level sharing;
  • Boardroom management tools to schedule meetings, manage committees and ensure compliance;
  • Deal Room feature that we will continually update with third party financing sources you can apply to;
  • Captable management to manage all your companies securities; and
  • Portfolio management section allowing you to keep securities holders connected and up to date.  

By providing this platform, companies can finally move their businesses out of the dark ages and onto a platform that will keep evolving by adding new features and third party services that may be of use to you while you run your business.

In keeping with our plan, we will be introducing additional functionality over the coming months that you will be able to utilize on a subscription basis but without affecting the features you already use for free.

So what is in store for you in the coming months?  Here are some of the new features and services we are adding (or have already added):

New Investor Relations Module (subscription service):
This is going to help companies stay connected to their securities holders by providing:

  • Online reporting in a secured environment, ensuring your private information isn’t at risk of being intercepted via unsecure email channels

  • Plan your Annual General Shareholder Meeting (AGM) directly in this new module

  • Messaging securely with shareholder and track their engagement

  • Use our eVoting tool to tally votes in real time

We have been busy testing the IR Module and we will soon provide you with the opportunity to take advantage of this new enhancement.  For more information, or to be one of our first 1,000 subscribers eligible to take advantage of our early bird 50% special for the first year, please click here…

Transfer Agent (subscription service)
For those companies that need a third party custodian to manage your securities, we at KoreConX are now offering this service at a much reduced rate than other providers in the sector.  But not only are we doing it cheaper, we will give you full transparency at all times through our dashboard.  In light of USA securities rules that require companies with 500 or more shareholders to have a transfer agent, we felt it was time someone helped out the small to medium sized private companies with the right solution.  So for those companies about to do a capital raise and are considering crowdfunding please consider our transfer agent services to help you out.

Personal Dashboard
Some of you may have already noticed and for those who have not, please login you see your new Personal Dashboard.  We simplified the dashboard to help you navigate and find what you need faster.  We look forward to your feedback.

Company Dashboard
The company dashboard has also received a major facelift that will help companies manage all their activities more efficiently.

Portfolio Management
We have done a major rebuild on your personal portfolio and corporate portfolio pages.  Now you will be able to see your security holdings information, the company details, reports, meetings, and any eVoting items that you need to deal with.

Yes ONE login Yes ONE platform

The All-in-ONE platform

The promise land of technology since the early days (going back to the 80’s) was to have one platform to make us more efficient, bring us online to collaborate and connect to a variety of other technology services like Fintech, InsurTech, LegalTech, RegTech, etc.

The internet changed a lot for businesses and how companies operate.  The emergence of online applications became the way for most of us to manage our business with such companies as Quickbooks, FreshBooks, Zero that provide you online accounting; Hubspot, SalesForce, Agile that provide you CRM online; and the list goes on and on in an attempt to automate different departmental functions of your businesses.

The challenge most companies are now having is how to manage all these applications which are all standalone online.  First came NetSuite, the perfect platform to manage the daily operations of a company (Accounting, Sales, HelpDesk, etc..).

What NetSuite has done for the day to day operations of a business, KoreConX is doing for companies corporate, boardroom and investment activities.  The KoreConX all-in-one platform helps companies manage their non day to day operations such as: BoardRoom, Cap Table, Shareholders (all securities holders), DealRoom, Portfolio (Investments), Investor Relations and so much more…

The 21st Century is about ONE login ONE Platform                          KoreConX

 

 

Shareholders = Customers = Ambassadors

Each interview I’ve had in the past two weeks has asked a question about how some companies or outsiders believe that having a large pool of investors is not good for a company and is distracting. I pondered my response on a number of occasions and then I reflected on comments from the founders of the JOBS Act (Sherwood Neis, Jason Best and Douglas Ellenoff) that crowdfunding is the democratization of capital and the “publification” of private companies. They went on to state that when investors invest in companies through these equity crowdfunding portals, the investors become the best ambassadors to the company.

So the creators of the JOBS Act envisioned what really was going to happen, and for it to work, the relationship between the company and its shareholders would change. Since the entire world is being disrupted by this new crowdfunding sector, it makes sense that even the roles of companies and the relationships they have with shareholders would fundamentally change.

Let’s Look at the Attributes of the “Customer” from a Company Perspective

A company cannot survive without customers. In fact, it’s often said the first customer the company receives is really investing in the company. Wow – “investing”.

So how does the company go about getting this customer, attracting new ones and managing them? The company employs a sales and marketing team to attract and maintain customers, and will also provide customer support. I only need look at our own company. At KoreConX we have invested heavily on attracting the best for each of these roles.

These individuals are responsible for learning about the needs of the customers today and tomorrow. Understanding what customers are looking for in a company and where the customers can be found is crucial to effectively marketing to them. It is important to demonstrate your thought leadership in your sector and why your product or service is better or unique.

All the work we do to attract customers and maintain them is truly amazing. All of these activities are being managed by a number of tools such as HubSpot, Salesforce and Lynkos that can manage all your activities with the customers and documents you send, tracking tools to see if they read it, etc. Companies around the world spend billions in this area because they understand that the more automation we add, the better we are at serving our customers.

The justification for the cost or investment by the company is simple. Companies do all this so the customers will keep buying, in essence re-investing in the company.

Great companies like Google, Inc. ($GOOG) have shown the world that every person is a customer and a shareholder that can eventually become your ambassador, and that is priceless to your brand and company.

The New View of a “Shareholder

The first investor in a company is often a customer who sees the great opportunity and vision the company is building.

The problem is that companies see shareholders as a burden, and make no effort to apply the same logic or business sense as they do for their customer acquisition and maintenance. In reality, shareholders are even bigger brand ambassadors than customers, and should be afforded the same care and consideration. Since shareholders identified the company as being worthy of investment, and they have a vested interest in the success of the business, they will always be the best brand ambassadors.

Yes, I said Shareholder = Customers = Ambassador!

Think of a time when you have either heard from a friend or told a friend the following: “Wow, Apple ($AAPL) iPhone and Apple Watch is a great combo, and see all the great things it does? If you use it so often and talk about it so much you must own shares.” This implies that if you are a true brand ambassador you must be a shareholder.

Equity Crowdfunding and the Growth of your Brand Ambassadors

In today’s social media driven world, people are connecting on a much more personal level to businesses and/or products that they are interested in. The emergence of equity crowdfunding presents an amazing opportunity for companies to capitalize by turning their loyal and dedicated ambassadors into shareholders and vice versus.

Because in today’s world, they will be connected with you and your company and your team using all the social media properties that they can find you in so they can feel connected. They want to be cheerleaders for your company because they believe in what you are doing.

The interesting thing that companies have severely overlooked with shareholders is that these individuals invested in their company and did not receive a product, and that these individuals will sell more of your products/services than any new customer you attract to your business.

Companies need to apply the same principles they have for operating the front lines of their business to the way they deal with their shareholders. Spending time cultivating, converting, empowering and managing shareholders will yield exponential returns. Which means you need to see both customers and shareholders as equally vital to the company’s success and be vigorous in using tools like KoreConX.

KoreConX provides you with the missing piece to efficiently and effectively bring the companies together with their shareholders, to manage them, empower them, connect them, and make them the best ambassadors of your company. Equity Crowdfunding is about disrupting how things have been done, not just for raising capital, but for creation of legal documents, due diligence processes, and most importantly how you manage those valuable new shareholders/ambassadors.

So embrace the 50, 100, 1000, or 4000 new shareholders! I’ve never known any company that does not want customers to help them grow their business. What is great about equity crowdfunding is that the more shareholders you have, the more ambassadors for your brand, and the more new customers they will drive to you to help you grow your business.

I say welcome and embrace equity crowdfunding, and make it work to your advantage.

Register today to manage your new ambassadors:

https://koreconx.com/user_signups/new_signup

Who is KoreConX

Welcome to the KoreConX blog. You are probably wondering who we are and what we do?

As our first blog, we wanted to start by telling you our story, explaining what we do and our target audience.

First lets start with our company name. For us, it was important to select a name that would to speak to everyone that would use our platform. We faced major challenges since the audience we serve is global and have similar but different requirements. See the info-graphic below to understand the attributes, stakeholders, and eco-system our platform supports.

At the Kore of our business, is the legal entity that needs to reduce their regulatory risks. Our secure patent-pending technology platform was developed to help entities manage their corporate records while connecting them to valuable tools and services in the capital markets, private equity, mergers and acquisitions (M&A), and crowdfunding industries. The infrastructure platform we provide connects (ConX) the eco-systems together for entities to effectively and efficiently manage their business while maintaining proper governance, transparency and compliance.

We are at the Kore of the eco-systems where our platform ConX all the pieces…hence KoreConX was born.

“I believe that KoreConX provides real value to our company and our shareholders. For us it provides an integrated, secure, transparent and efficient way for the management of WAFU to interact with its shareholders and its board of directors. The time and costs saving alone make it a no brainer for a small company like ours which currently has 20-30 shareholders but which is expecting to expand to more than 50 shareholders as a result of our upcoming equity crowdfunding round.” per Gil-Michel Garcia, CEO, WAFU

To understand KoreConX better let’s start with the users (the people) we support in our platform. Each entity or organization is run by key people such as the President, CEO, CFO, CCO, COO, Corporate Secretary, IR (Investor Relations), Partner, or Executive Director (collectively known as the “Management”). To make effective decisions, the Management works alongside the external users (people) such as the Lawyers, Accountants, Board of Directors, Members and Shareholders. Together the internal and external users make up the Stakeholders of an entity.

Each of these Stakeholders will want to use the KoreConX platform for different functions that are inherent to their position within their entity.

The one thing that all our users have in common is their connection to an entity (in our world an entity is our “Client”). An entity is governed by a legal structure that all users must work within. The types of entities that use our platform are Private Companies, Non-Profit Organizations, Public Listed Company, Associations, Condominium and Strata Corporations.

The legal structure of each entity is represented by the articles, bylaws and minute book that dictate how the Stakeholders are to run the business; how to conduct themselves in their organization; and acts as a historical record.

Stakeholders engage the KoreConX platform for the ability to: Manage their information more effectively and securely; Organize it so it can be understood and easily accessed by all; Share in a collaborative manner; and Communicate with all key Stakeholders in a secure environment.

KoreConX allows organizations to demonstrate that they are citizens of good governance, maintaining their compliance and being fully transparent to relevant Stakeholders.

Why is this all important? Our Clients need to appropriately manage corporate records because they may need to access capital via equity/debt investment; they may need to prepare for an M&A transaction; and/or they may wish to seek a public listing for their stock. It is also very important to properly manage these records to avoid regulatory risks or financial damages.

KoreConX is a multi-jurisdictional eco-system connector that facilitates efficient and effective management of corporate records in a secure online cloud. We are here to save our Clients time and money and facilitate good governance and compliance.

We are delighted to say that the CROWD helped us in the last mile of making our decision with our name “KoreConX”. Just further validating the power of the CROWD when you need help. Entrepreneurs not only can use the CROWD to access money, but could utilizing them to access new clients, partners or in our case feedback on the company name.

We are happy to present to you our new venture:

Facebook News

Visit us at www.koreconx.com to “Be the first” “all-in-one” (#BeTheFirst) to partner with us or to register, or see how we can help you.

Don’t Let Compliance Become Chaos

Are you spending too much time on compliance and getting frustrated with all the paperwork? Compliance Officers have to deal with compliance and regulatory issues on a daily basis, but it does not have to be a burden or paper shuffling affair. The smart Compliance Officers take control of their situation and find effective and efficient tools to make their lives easier.

Kore Platforms, in partnership with KoreConX, have developed an elegant automated solution to make your life easier. Imagine a system that is automated from beginning to end for all of the investor, issuer and the Compliance Officer. That means automated due diligence and investment process that includes ID Verification, AML checks, KYC and suitability as well as managing the payments using VISA, MC, AMEX, VISA/MC Debit, eCheque, TFSA and RRSP. As a Compliance professional wouldn’t it be great to manage all your work through one convenient dashboard that tracks all your historical work and keeps you audit ready at all times?

If you would like to learn more, click below to see a demo.