How‌ ‌to‌ ‌Raise‌ ‌Your‌ ‌Capital‌ ‌for‌ ‌RegA+‌


Oscar Jofre

CEO and Co-Founder


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


E5A Integrated Marketing

Andrew Corn


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 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.

James Row

Founder and Managing Partner

Entoro Capital

James Row

Founder and Managing Partner

James C. Row, CFA, is the Founder and Managing Partner of Entoro Capital, LLC, a middle-market investment bank based in Houston, TX. Mr. Row has over 25 years of experience in capital raising, deal structuring and energy finance, including project finance, equity and debt securities, risk management and digital securities. He has originated and arranged funding, in excess of $10 billion. Mr. Row is a Chartered Financial Analyst and maintains Series 7, 24, 28, 63, 79 and 99 FINRA securities licenses. He serves as a member of leading industry groups such as the Houston Society of Financial Analysts, Houston World Affairs Council, and Houston Producers Forum. Mr. Row is the author of several oil and gas issues and a featured speaker at global industry conferences.

Oscar Jofre  00:00

So just give it a second here. I think it’s been a rough start [uncertain] for it. I believe it’s just uh, maybe it’s because it’s, it’s Tuesday. So no, all right. So let’s, let’s see if he’s making his way. There he is fantastic. Fantastic. I really appreciate. Are you there, my friend?


Andrew Corn  00:38

I don’t know what the hell’s going on why it took so long but it did.


Oscar Jofre  00:42

It’s okay. Have you know, they do have new computers and we stopped using dial up a long time ago. So it’s okay. You can you can get fiber now.


Andrew Corn  00:52

I’m in the city now, man. I’m in the city. Like I’ve got great internet. No,


Oscar Jofre  00:57

I know. But you know, you keep calling it a city. You keep thinking of population. Three people. It’s a city. We go.


Andrew Corn  01:05

There’s only one city.


Oscar Jofre  01:07

Whoa, Jim, tell me.


James Row  01:11

Hey, you know if we hear a 98 baud modem, then we were in trouble there. But


Andrew Corn  01:18

no, I’m on fire.


James Row  01:19

I may take exception to the one city comment but you never know. We all have our you know, he’s proud of New York. But I love I love Houston. I


Andrew Corn  01:30

love Dallas. I even like San Antonio. But


James Row  01:34

don’t don’t forget about Toronto, and Toronto


Oscar Jofre  01:39

neighborhood. Oh, I love it. I love it. What a great way to start. It’s Tuesday’s rally. Okay, everyone. Thank you. And welcome to the KoreSummit webinar series 2021. Once again, we have some Well, it’s, you can already tell it’s gonna be an interesting topic today, and discussion. So I’m just going to give you the format. My name is Oscar Jofre, I’m going to be going with these two great panelists, which they will introduce themselves to you shortly here. The format is very simple for our core summit. There’s no PowerPoint presentations. Here, you’re going to be able to have an opportunity to listen to great thought leaders. And you get an opportunity that they’re going to take you out for 45 minutes and discussion points. And then we’re going to bring the right back to you for 15 minutes to have questions that they can answer for you to assist you in the discussion we’re having today. So it’s exciting to have them both with us today. Because you know, how to raise your capital for a RegA is a question that we get asked a lot. And there’s no two individuals today that are dealing with that question head on. And we’re going to, obviously, we’re not going to be able to cover everything today, all the different areas, but we hope to be able to cover a lot of those points that will assist you this without a doubt doesn’t mean that our advice is the only advice and we encourage you to talk to you, fellow team members and of course, those who are helping you with your RegA offering. But hopefully today, this is where the begins of your journey because 15th Of March 2021 some great news are emerging and RegA. So let’s start by getting the introductions going. Jim, please.


James Row  03:31

Jim Row with Entoro capital here in Houston, Houston. Entoro is a investment bank where a broker dealer, licensed in all 50 states, the District of Columbia, and sometime this week, Puerto Rico as well, we just had a colleague move to Puerto Rico. So we’re going to be licensed in Puerto Rico as well. We are also an SEC registered RIA registered investment advisor we have that’s because we have registered funds as well. So we have that we have a couple funds coming out here. In the next month or so. We’re having a family of digital asset funds coming out. We also have a valuation company called clear rating, which we’re quite proud about. We do a number of principal investments as well through our venture called Entoro ventures. So we do both principal and agency transactions. So quite involved in the digital and crypto space and knowing the KoreConnects team for two or three years and good friends with Oscar and team so looking forward to the dialogue and happy to answer any questions on the broker dealer side of the equation or anything else in the financial world. But if it gets too detailed, I’ll have to tell you tell anybody that there’s disclaimers and disclosures, so I can only give certain information. So happy to answer as much as I possibly can. Looking forward to it. Thanks Oscar for the invitation.


Oscar Jofre  05:15

You’re Welcome, gentlemen. Andrew.


Andrew Corn  05:19

Good morning, everyone. I’m Andrew Corn. I am technically a managing member of E5A Fund, which is our legal name. But we operate as E5A Integrated Marketing. We are a systematic data driven investor acquisition firm 95 plus percent of our work is aimed at helping people acquire investors, we work across financial products, ETFs, mutual funds, real estate, hedge funds, private equity, and of course, RegA plus, and more recently, as CF is moving to 5 million Reg CF. I am a former multifactor model, portfolio manager and ETF designer. So we have a unique perspective, not only on the math and data side, but also on what investors are looking for. And have managed portfolios succeeding $3 billion. So my team and I work with a variety of issuers. And what we basically are looking for are deals that have a very high probability of success, that have a great team that have a great concept and is not just in the concept stage, but is moving along. So I also have known Oscar for a couple of years. I’ve known Jim for 18 months, two years now. Jim has visited my humble city in New York and stopped at our office a couple of times. And I look forward to the pandemic being over and my going to Houston as well, because they have a great food scene there as well.


Oscar Jofre  07:10

So are you suggesting we’re all moving to Houston? We’re following Oracle. I mean, we’re following. First, we


Andrew Corn  07:16

have to decide if it’s Houston or Housten. But that’s a New Yorkers perspective.


Oscar Jofre  07:23

I understand. Thank you, gentlemen. It’s great. So for all the attendees, thank you for making the time this morning. So let’s dive in. Obviously, the big question in your mind. Today is the the topic you know how to raise your capital for a RegA. So you know, there, there’s a lot of different directions, we can take this. And obviously, they’re just for everyone. That’s here, we have about 72 webinars coming up. So there’ll be plenty of time and different specific topics, the legals and all that, but this one would be more general. But I think one of the things that I firmly believe it’s that there is a because of RegAs, things are going to change. And let’s touch on that. First. There’s a big change coming on on March the 15th. So, Andrew, I mean, you and I’ve been watching of course Jim as well, but this big change who How is that going to affect the the way people raise capital? The ability to raise up to 75 million? How’s that going to change the way the scope of the offering? Well,


Andrew Corn  08:25

I think it brings RegA into a new realm. 75 million is a lot of capital to raise. And I think it puts RegA in more direct competition with traditional underwriting private equity, not just early stage venture. But if 50 million already, it’s a nice chunk of money. But 75 I think is pushing us much more into what professional investors would say as their own turf. We have already been engaged to work on a $75 million offering, as you know, legal filings take as long a three months, and that is those papers are being drawn. And we intend on raising all, you know every dollar that 75


Oscar Jofre  09:17

Yeah, it’s it is pretty exciting. You are right, that it does change the dynamics that we you think about, I mean, up until now was 50. And even then it was but now we’ve raised it up a notch. And we won’t go into the type of offerings are coming. But Jim, I mean, you’re the broker dealer. So Andrew sees it more from the investor acquisition space, how he needs to bring the attraction from a broker dealer does anything change for you dramatically now that it’s getting changed to 75.


James Row  09:45

The dollar amount really doesn’t change because you go through the same process whether or not you’re raising 10 million or 50 or 75. It does change the context of the investor pool. But the process from due diligence filings and everything, it doesn’t really change. Andrew brought up a good point though, you’re going to get a different makeup because it does start to compete differently. And that’s if you’re, if you’re able to raise $75 million, versus where you were able to raise 25, you’re able to spread your cost over differently. And you may, where you were going to maybe go for a reg D, or maybe you were going to go for a different kind of strategy. Maybe a RegA now makes more sense, just from a cost basis of your, of your of your cap rate. So you’ll have a different option, where you’re able to have a greater amount of, you know, it allows you to do something different. So you can it’s a cost basis issue.


Andrew Corn  10:38

And so I agree with Jim there. And just to kind of segregate those two points. First is the quality of issuer, someone looking to raise 75 million is very different than someone looking to raise five, where they are in the business cycle, the whether their management team has put together, hopefully their structure is set where they are, quote, you know, prepared to raise that kind of capital and put it to use for the business and for shareholders. So we’re hoping that will increase the quality of issuer. And then the second is the cost of capital. You know, when we get to CF, the reason my firm has shied away from CF is there’s just a lot of things we have to do that cost X amount of money. And if you plot that against a million dollar raise the cost of capital is prohibitive. So it’s 75. As Jim said, a lot of the processes are the same, we just need to scale more. And to do that will make us an extremely competitive cost capital working with a broker dealer like Jim’s and a firm like mine.


Oscar Jofre  11:47

So that they think it’s I mean, we it’s always the dollar amount will dictate how you raise your capital, what tactics, I don’t think that the overall tactics are going to change. I think we all agree on that. But will it? will it bring a different dimension into the capital raising? Do you think that there is going to now that it’s going to 75, something additional needs to be added to get to that? Because before it was 50, and there was only a few companies that reached that Helm? Now we’re getting them to the 75? You know, it’s having the broker dealers important having the investor acquisition, is there another part that needs to come in, that will fundamentally change this capital? Here’s how it’s done.


James Row  12:33

I think it’s gonna


Oscar Jofre  12:39

say, Jim, first, yes, sorry, Jim,


James Row  12:41

I think it’s going to end up, it’s going to end up, you know, also factoring in how, you know, from also from the sponsors, you know, Andrews, you know, the marketing activity as well, it’s going to change as well, because you’re gonna end up with a greater amount in the market, as you know, you’re gonna end up with different kinds of issuers, for example, in this is, you know, let me give a little sales pitch here from from, you know, our shop, you know, because we can do the broker dealer record aspect, but we also have the ability to go out and, you know, market as well, right. So we don’t, we can do twofold, we can actually do the underlying, you know, broker dealer record function, but then we also have our own platform, we can reach out to our own set of investors, and then we can also work with other other distribution networks, for example, RIAs and, you know, international, so we, we, you know, our own situation is we can actually bring others to the table, when you have larger offerings, you’re going to have a different set of investors that are more interested in a bigger, bigger offering, and you’re going to see a greater comfort and a bigger offering from that all right type of community. So that is much more attractive, you know, to to some of our investors, when you when you have that. So a $75 million offering is going to get a different cause you’re going to, you’re going to see, they’re also going to be much, much more likely to be revenue, positive EBIT, da, you’re gonna have a different aspect and in the face of where that particular company is, as well.


Oscar Jofre  14:15

That, you know, you brought up an interesting point, I think we’re leaning in that direction. I think this is important that we, we for the greater good of the industry, obviously, we’re grateful with the SEC increasing it but it is asking these questions and Andrew, you are going to bring your point there as well.



Well, quality issuer is the number one thing that we look for. And, you know, as you know, and Jim knows, as the industry knows, we say, we say no, we cannot help you to an awful lot of companies. It’s because they’re looking for capital of last resort because they are thinking that it’s easy, or they don’t realize they’re going to wind up with 20 30,000 shareholders when this is Done, and they need a great transfer agent and tech partner for that side of it. So people need to or issuers need to really understand what it’s all about and why, and why other structures have been in place to help people raise money. You know, depending upon what they’re doing from a 40 act fund to the way Reg D was done. So, you know, when I look at the way we used to handle 75, which was Reg D combined with a plus a plus as the retail, and that’s the mom and pop individual investor, 200 $500,000 minimum were the reg D might be 25, or 100, or even a million minimum, with probably different terms. So 75 allows the whole deal to be on one set of terms, but then may eliminate institutional investors who don’t want the same terms as someone investing $1,000, because they’re putting in way more than that. But it’s 75, we’re going to make a lot of publishers a lot of money, because that is who we spend our media dollars with. Along with Facebook and Google and other networks like that. They’re certainly going to benefit. My firm works on a what we call radical transparency methodology where all the media is paid for directly by the issuer with no media markups. So we charge a flat monthly fee. And that works out 75 is going to probably extend the length of a offering because it’s a lot more money to bring in and add a lot of complexity because you can get to audience saturation where how many investors do you really need to be able to get this stock? So that is something that we think about quite a bit.



So you both touched on it. But you did squish the lemon is dope. So I’m going to push it in. So 75 million, I think Jim started touching on it in? And I’m just curious. I don’t know. I mean, I’m putting the question out there because you guys have seen it. Do you think it’s possible that we’re getting to the stage where a BD, a broker dealer or an investment firm, will underwrite a RegA private deal? And, you know, change the landscape? Is that even a possibility? Again?



It’s a possibility, I think we’re, you’ll see it probably in 2021. I think you’re going to see it start to develop as the liquidity of the ATSs starts to become more of a reality, then I think you’re going to start to see see it as digitization and tokenization. Also, I think you’re going to see the convergence all happen simultaneously. And I don’t think I don’t think it becomes a stair step. I think it converges simultaneously. I don’t, I don’t think it becomes a stair step, I think, you know, one day all,


Oscar Jofre  18:02

the only two come together, because that’s it’s not like being dinged, it’s just


James Row  18:06

like that, okay, it’s not sequential, it’s literally going to come, you know, we’re all going to meet kind of broad we’re getting there. You know, and even some of the things we’re doing in our own shop or getting there just by the nature of what we’re going to do and changing some of the things that we’re doing in our own broker dealer to add certain functions and features, we’ll get to that point. And then I think, if you also see,


Oscar Jofre  18:36

I think you’re going to



also see an increase in the size of reggae at some point as well, I think you’re gonna see $100 million number. Battle eventually be a reality as well. I don’t predict it in the next year or so. But that’ll happen as well. But I mean, when you start to see the convergence between the ATSs, the digitization to tokens, all of that kind of coming together. And you’re, you’re, you’re seeing much more to the mean, you’re gonna start to see the reality, the democratization of capital markets come together, because it was talked about, you know, ad nauseum and 17 18 and 19. You know, COVID, tripped it up, accelerated it, and you’re gonna start seeing it much more later 21 and into 22.


Oscar Jofre  19:24

What do you think



is so let’s, I want to take a step back. ATS means alternative trading system and, you know, turning securities into something that’s digital essentially should make it easier to trade. So the trading of private securities, you know, essentially, all markets are based on supply demand. So when you look at the public markets, even something like the New York Stock Exchange, there are stocks that don’t trade for days on end. There are stocks that trade 100,000 times a day Even at 1000, shares, 5000 shares, there’s all sorts of algorithmic programs to increase liquidity and take large blocks of shares, and send them out. So, essentially, if you were doing issuing private shares, is there a market for them? And there’s two parts of that. One is the supply demand. The other part is, is there technology that makes it so the shares can trade hands at a reasonable cost? Is it $500 to make a single trade? Or is it $5 to make a single trade? So the advances going on in ATS, alternative trading, and private exchanges is happening at a much faster pace than I was expecting. And certainly, Oscar, you can probably speak to this as well to better than just about anyone, since you and your company are at the forefront of it. Why don’t you weigh in on this, as opposed to being the moderator?



No, no, you know what, guys? I put that question to the both of you, because you’ve both been at this long enough. You see the cycles and all that. And I agree with Jim’s point, I think. And both of you are correct, I think things are finally coming together, not in steps, they’re coming like this. And I believe that when the SEC increased the limit to 75 million, and I know that we’re looking at 100 million, so to Jim’s point, we are right around the corner of that, that’s going to fundamentally change the type of issuers we get, which were really seen or more, you know, a company that would have gone more of a traditional route and seeing how this is going to happen. And and I believe the bankers are coming and be why because a secondary market we now you’re going to hear it here in the next few panels coming up with Shair Noonan co founder Rialto markets, their very first registered SEC tranche us, sorry, ATS, for digital securities for RegA, I mean, $100 trade this is, you know, it’s not the fact that it’s a digital security. I don’t know, this is not a blockchain thing. What people don’t realize is that the the average individual never see the blockchain and they shouldn’t have to, where they’re going to benefit is when they go, Wow, that was so simple. How do they know how do they do it? It’s all behind the scenes. And that efficiency to Jim’s point, is going to open up the rest, but it’s going to take time, it’s still, you know, every every layer that I keep seeing here, we keep adding to that. So you know, we’re adding a distribution. Under you said, We need publishers, they’re not going to go away, we need them, we need more, we need different venues, or publishers, and now, you know, the bankers that could bring another and Jim, you’re bringing in RIAs. That’s another great distribution channel that has not been made available to companies. So this is opening it up to it’s no longer just crowdfunding to see what I mean. You know, I



think, yeah, Oscar, I mean, those are all I mean, every one of these components becomes an additive to, to the benefit of both crowdfunding and, and the RegA world. But you’re also going to start seeing a large expansion, you know, both in the IRA world and 401k space as well, right? So, you know, is that some of that gets, that space gets trapped, and released, you’re going to, people will start to utilize those avenues as well to take positions and both, you know, A and CF. So that’s going to be an ever increasing Avenue as well. So it’s not going to just be somebody popping down, you know, when I when I in a taxable account, it’s going to you’re going to start seeing things done and a lot more in tax, you know, tax free, or non taxable accounts. Perfect.



So, okay, so we talked about the great thing that it’s going to 75 million, we talked about how it’s going to change from the the investor could bring a whole new venue into it. But the real question is how and the How to is really, and I think, Andrew, you touched on it or were get in touch, but you were really direct on it. Quality companies and quality companies are going to be different stages. I’ve know you you’ve taken pre revenue companies put their quality you see the opportunity to those that our revenue base, but so let’s walk through the steps high level, of course for people so obviously, Jim, I’ll come back to you from a broker dealer side would you need. So Andrew from your side, what are you looking at for companies to how they should do a RegA in from E5A’s point of view?



Yeah, so there’s a bunch of reasons why we don’t accept everyone who can write us a check. And some of that is the industry itself. We want to Make sure that we’re bringing good issuers to market. And that investors have a really good shot at making money by making this investment. We are not doing formal due diligence, we’re not a broker dealer, we’re not an RIA. But I have run RIAs. And as a former Portfolio Manager, I want to make sure that we’re working with what we truly believe are quality issuers, so that what’s this that take, as you said, Sometimes they’re pre revenue, or they’re at a minimally, you know, an MVP, a minimally viable product. But they’ve got a solid plan, they’ve got a solid management team, it’s not their first rodeo. So it can’t be their first rodeo, but then they’re a little bit more further advanced in what they’ve got, you know, why does someone want to do a RegA rather than going the VC route. You know, if you go the VC route, you get three or four analysts a partner, get them in a room convinced them to three more meetings, and bam, you’ve got a nice big check. The reason to do a reggae and we want to make sure the motivation is there is that you don’t want three or four people validating your business plan, you want 1000s of people to validate your business plan, and you want a bunch of them to become customers as well. And you want a bunch of them to become influencers and advocates. And that is a lot of what we focus on is making sure that that we’re bringing that to bear along with the rest of the work we’re doing. So you know, this whole idea of blending is really important. So if the company doesn’t have those possibilities, they’re never going to work and at scale. And if we do too good of a job, but it’s definitely not going to work, I just think that would be a stain on the industry and shame on us for doing that work. So, you know, we are getting tighter and tighter of who we really want to execute for. And,


Andrew Corn  27:03

you know, I’m



hoping the entire industry starts to accept that as something we need to do to make sure we don’t repeat the missteps of when RegA plus started.



Yeah, that’s it. That’s a very good point that because when RegA first gets started, when really high, and obviously, a lot of mistakes can happen. And now we’re being more cautious. That doesn’t mean that we’re saying no to companies or anything like that. This is, it’s like anything else, you got to come prepared, you’ve got to you can be an early stage company, but you need to prepare yourself. So Jim, from a BD point of view, I mean, obviously under touched on some of the finer points for yourself, where, you know, what our company’s meaning as they’re coming to you as well, because, and, of course, what’s the role of being in the RegA in the first place? Right?



Well, Andrew brought up a lot of good points, you know, what broker dealer does is obviously the due diligence, you know, background checks, we’re obviously very concerned with the strength of the issuer ourselves. But, you know, big thing for us is making sure that the issuer can stand up to with the KYC. And the background checks that FINRA and the SEC would require. And that’s always a huge issue for, for me, I mean, that gets checked off a little bit with, you know, some of the filings with the SEC, but that still doesn’t relieve us of making sure we’re, we take our own independent view of it as well. So those are some of the functions for that. So as a broker dealer of record, we’re responsible for also doing an independent analysis of the project. But, you know, on a RegA you know, it’s much more appropriate, or at least traditionally, a little bit more retail focus for a project to pursue RegA, Andrew brought it up pretty good that, you know, these end up becoming this as a marketing piece. You know, you’re trying to, if somebody wants to do a RegA, they may be much more likely to have a retail product than they would a institutional product or something that may never see the light of day in a retail market. So it may be something more appropriate for retail than anything else. So it’s a brand building exercise as much as it is a capital raise. But, you know, the one thing we’re always cognizant of is that, you know, every issuer is in love with their product. And you know, not every baby is pretty, and so you have to always figure out whether or not somebody is in love with their baby and sometimes some baby love my


Oscar Jofre  29:49

kids, pretty well, my children, my babies. Hear him in the background. Yes. You Brooke


James Row  29:58

sometimes not everybody Maybe he’s gonna win the beauty contest, right. And that’s tough for some people on the, you know that they’ve nurtured something or, or they’re ready for they think they’re ready for primetime. And they they’re not. And if you really look at a capital raise, whether or not it’s on the private side, you know, 50% of a capital raise, and I’ve said this many, many times 50% of private raise, and that’s a D and an A, or a CF. And 50% is the management team. And the management team is critical. So there’s a, there’s, there’s a lot of trust, and a lot of dependency that goes into the management team to getting a funding done, and a product launched or what have you. So there’s a lot of soft skills that go into figuring out whether that management team is right for you, as a broker dealer, and right for someone like Andrew to want to work with. It doesn’t make me sometimes there’s just not a fit, doesn’t mean the project’s not going to be successful. You know, I always want to see people be successful, but sometimes there’s just not a fit.


Oscar Jofre  31:08

So I agree.



Jim is lobbing me a softball here to get into data. Because data is the determined, especially if you’re going 75 50 60. Anything north of 10 data is the critical factor from a marketing standpoint. So what do I mean by that? You have, we have a b2b client, who we are hoping to sign. And basically, they go to, that’s going to sound a little boring at first until the end, but they go to domestic dairy farms, and they take all that cow manure, and they turn that into very, very low pollution, jet fuel. So it’s a total b2b play. But who doesn’t get that? Oh, cow manure into jet fuel that is almost zero admissions. So that fits the innovation bucket that fits the impact investing or ESG bucket? So who would want to invest in something like that? And essentially, what we’re looking at is, what buckets does the client fit? How big is that audience? And then if a tiny percentage of them only invested the minimum, are there enough people to fill the raise? If the answer to that very simple arithmetic question is no, there’s no reason to start the project. From my perspective? If the answer to that is yes, then we should take the next step and see what else we want to do as a measurement. But the data is really important, as Jim said, a retail product, how many? How big is that market? How many in terms of number of people as well as in size from $1? standpoint? And do we believe we have a really good shot mathematically fulfilling the race? And then how can we get to them? Are they identifiable? Can we get data on them? We already have data on them. You know, my firm has built almost a million person database. Now that is proprietary. Both email and add tags have verified angel investors, which means they’re accredited, but that doesn’t mean they don’t do CF and a plus as well. So you know, doesn’t mean every single one of them would be interested in every issue or that we’re going to work with. It’s what percentage and why.



Okay, so we, obviously the quality, and I don’t agree 100%. Jim, with your point regarding whether it’s a company’s b2c is more likely to be successful, rather than b2b? Because we are we? I think at the beginning, we saw it just I believe that a b2b company will have to work a little bit harder with their messaging, but I think everybody can. But that’s neither here nor there. It’s, I think you nailed it. There are some people that have a more preference to business to consumer, rather than business to business, but we are seeing both. But here’s one, one thing externally, and this will touch on you, Jim, because you’re doing it. But I’m going to ask Andrew first on it, because we’re now seeing it come in. We didn’t see it in the early days, we know it’s important. It’s going to be part of price discovery. We need it for secondary market. And that’s research. So we’re seeing two different types of research, right? We’re seeing first amendment research. I’m telling it that we’re all laughing and it’s really important for everybody here to listen to this, because we’re gonna have a topic on this in and it’s really important that when you hear first amendment research, stay away, do not speak to them, because as soon as you do, you can change your often so will will. But then there is a regulated research. I hope I said it correctly. Jim, I’ll let you touch it. But how does research fit into all of this on the primary rate and can it be the can it be the catalyst to get companies to the 75 million with the research on do I start with you? Yeah, so



I’m going to let him talk about that type of research. As a former biocide research analyst, published in Barron’s, and across all sorts of financial media, you know, I take research really seriously. But research today comes in all forms, you know, we place an ad on Facebook or Instagram, and the ad itself gets likes, the ad itself gets comments in the comment might be, gee, this looks like a Ponzi scheme. Or, gee, this looks like something I’d really do well with, influences other people. Now, that’s not research, but it is commentary that’s out in the marketplace. So doing real research, is something that my team completely welcomes, because someone with the background in financial analysis and has industry expertise, it’s certainly welcomed for them to do with third party write up, you know, the question is, are they paid for the write up, or they paid by the issuer for the write up and, you know, when you look at the micro cap world, there’s all sorts of very gray things that go on. And I would want to make sure that that stays out of a plus. And certainly way away from CF. So you know, there can be the straight quantitative con, and then there can be the qualitative and then they can be put together. So I know that Jim has more expertise, especially in a plus on research than I do, so I’m going to ask him to jump in.



Well, Oscar, and Oscar brings up a good point on on research this, this is, you know, we have a whole series of webinars on this topic alone. research can be either regulated or non regulated. Under the broker dealer. There’s actually licensing for an 8687 FINRA licensing, you need to be approved by broker dealer to actually issue certain things on Buy Wholesale kind of activity, then there’s the unregulated side, then there’s even insurance but there’s a number of things, I don’t want to go too deep in it. And then there was recent activity, you’re under method two, which basically killed off a lot of the Wall Street research things. Like I said, I won’t go too deep. But for RegA, reg CF. True research is actually difficult to come by because it is effectively private. And it really is, comes from the sponsor promoted side of the equation. We, I don’t want to be a promoter of my own organization too much. But we actually have a division, a subsidiary called clear rating, which we actually do that. There’s a couple other groups that also provide research and will provide third party reviews for RegA and reg CF transactions. Those are actually quite valuable for a issuer. Because anytime you have a third party review for a offering, that’s to me is always a beneficial thing. Even if it may have a certain amount of bias to it, at least it’s another third more information, the more information you can get, at least it allows the reader the potential investor to make a judgment call whether or not it is beneficial or not. So to me, even if slightly biased, or bias period, it at least allows someone to make a judgment call on on that on that piece of research or documentation. A new story may or may not be research, a article of a blog or blog, etc. may or may not be research. To me something that is actually somebody has reviewed the financials reviewed the comparable competitors review the industry that to me is research just making a an opinion that this company is good, bad or indifferent. That is not research. Taking a an intellectual and an honest view of it. That to me is research. And that’s what we do. And we actually do a pretty thorough review of a company. And like I said, most of those are usually sponsored by the issuer to provide that activity. And that is usually something for them to say, Hey, we’re opening ourselves up. We’d like somebody else to do a third party review of us. So we’re not just you know, eating our own message, but we’re actually exposing ourselves and allowing someone else to come in and write about us and And when you have that, to me, that’s always a good sign that somebody is willing to do that. And that usually is a good sign to investors. And when investors see that they’re much more willing to, you know, typically invest in that type of a company in a project, because it usually has that independence to it. So to me, that’s research. it’ll improve, there’ll be more people in the space. But it’s a costly thing. When you’re writing a research report for a private company, when you’re only going to see a $5 million offering or even up to a $75 million offering. That’s an expensive proposition compared to a wall street report on Apple, right? That’s a very different thing to spread the cost over, you know, a trillion dollar company versus somebody raising $50 million. So it’s very, very different mix. You’ll see it, you know, gain strength over the next few years, we ourselves at clear writing, we’re ramping up to have our goal is to have 100 gradings a day. That’s what we’re what we’re shooting for. That’s our first face.


Oscar Jofre  41:11

Yeah, I’m, you know, I’m torn by it, I see more of it coming out. I know that the the goal is to put information out there that’s going to help investors have a better insight into companies. And some of it can be misleading. The newbie, I think it unique in particular, me maybe reg CF is a little different, because it is smaller amount. But even then, I mean, if if we start letting being ourselves the same as the smaller amount, it’s okay. I say any amount is not okay, there should be qualified individuals doing the work so it can provide a report that investors can rely on. I mean, the only question I’m gonna ask you right now, sometimes you’re not. But do you think it can it can have a positive impact in a company with a report, regardless of who does it? I mean, it can it it? Can it be the catalyst?


James Row  42:10

Absolutely, without question.


Andrew Corn  42:13

So I need to agree with that the the word I’m looking for, and it’s a very big undertaking, if you go to something like Yahoo Finance, they look at every single company the exact same way. So there’s a uniformity. And they are not doing research, but they’re presenting you a bunch of statistical things the same way. So if we, as an industry, we’re able to do that and say, here’s a bunch of ways we assess, assess it now, a company just writing research is one thing a broker dealer writing research is another because they’ve got a different standard to conform to. So if we could get things that are, you know, truly qualified people, like anyone can write anything. You know, there’s a company out there called estimize, which crowd funds, earnings estimates and all sorts of other typical estimates. And it can be done by a high school kid in their basement all the way to a biocide analyst at a multibillion dollar hedge fund. But they’ve got algorithms to figure all that out. And they do a great job. They’ve got an eight, nine year headstart off. So you know, Jim, jumping into this, I think is admirable. And we definitely need more of it, not less of it.


James Row  43:34

I just think a bunch of standards need to be created, so that people are looking at apples to apples. It is this is a standardization issue. I’ve been working on this. Since 1992, I can tell you, it’s not an easy thing to standardize. And the amount of efforts we’ve worked on it from our own shop is not an easy thing to try. I mean, given that some of the new tools out there, I can tell you AI and a number of other things is going to massively change the world. And when it comes to ratings and some of this stuff, it’s your it’s going to change. But let me tell you, it’s not an easy subject. It’s not an in not one size fits all. I mean, the way you analyze a software company is a very different way than you analyze a manufacturing or an energy company or it’s a very, I mean, the methodologies are massively different from a retail company to I mean, it’s just very, very different.


Oscar Jofre  44:34

Sorry, I would just the only thing about all this. We’re talking about it. Finally, we weren’t talking about it two years ago, three years ago. Today, we’re talking about it because people are thinking that this is going to be needed. And like anything, whenever you introduce something new, it’s kind of crumbly, it’s a little bumpy, but we’re having the discussion and we’re alerting the audience to make sure they understand when they hear about this what impact it can have because they can have a Positive and negative impact on your company as well, depending on who you’re dealing with.


James Row  45:05

Well, I can tell you from, from our, you know, the authors of our, we will never have someone’s name on a document, because it ends up could be counterproductive to it. But the people that actually work on it, our CFA, CPAs, lawyers, industry experts, finance, you know, subject matter experts. Right. That’s, that’s how you have to have it. And you can tell that by the quality of the materials, because if not, you have no, there’s, there’s no, there’s no value in it.


Andrew Corn  45:35

There’s nothing sorry, under I didn’t mean to cut you off. I just Well, no, no, no, all [uncertain] or have you know, if you look at debt to peer group on a software company, well, there should be any debt. Oh, but it’s so small, it hasn’t convertible note. But you look at debt to peer group on an industrial or manufacturer, that’s a normal thing to look at. So Jim’s point of that it’s all different is and how complicated it is. It was easy for me to build a model on public companies because of reg fd. And back when Sarbanes happened, and everyone had to put out their financials the same way, doing it on private companies is a nightmare. And my hat’s off to you for tackling.


James Row  46:18

Well, the difference between here’s how, you know, somebody knows what they’re doing if they try to compare a lot of private companies, to public companies. And they try to draw those proxies together. As an investor, that’s when you turn around and walk out the door.



Right there.


James Row  46:37

That’s not a good, that’s not a good analogy.


Oscar Jofre  46:41

Thank you, gentlemen. We had a great discussion. I mean, it wasn’t the How to this wasn’t that we wanted to give you kind of the overview of RegA , it’s going to 75 million, the dynamics are going to change. It’s like we’re walking all over again. But the only difference is, we we’ve learned the basics, you know, front, you know, right for walking along. And but there’s new Dynamics coming in that it’s going to fundamentally change the way you raise your capital, you’ve got to think of all these different elements that didn’t exist two, three years ago. And the great thing is we have this ecosystem that you don’t have to go too far to learn, because here’s the experts. They’ve done it. So they’re going to be able to tell you what is working, what isn’t working. So usually what we do now is we leave the last portion of the webinar to you, the attendees that are here, all you need to do is click the button, raise your hand, if you have some questions for our panelists. here this afternoon, that may be pertaining to a reggae you’re looking at doing or some question about the the regulation itself, you have a broker dealer, you have an investor acquisition expert here. So you’re getting it from both sides from the person that’s bringing in the investors to the table to the one that’s processing as well, adding distribution, and so on. Okay, so far, no question. Look at that, guys. You guys must have stumped everybody today. There’s no questions that also wait. Richard Ross has a question. I’m bringing them in here. All right, Richard, you’re on. Can you hear me? Okay? Yes. Okay. Thank you. Um, it seems extending what you’re talking about, by the way, you guys are great. That there’s a new way of funding companies that completely disintermediate VCs, starting with incubators, going to reg CF class and a plus ending with specs. Am I completely wrong? Or is this actually a thing? Thanks, Andrew, let you start first answer that.


Andrew Corn  48:42

Yes, I just don’t know if this back, it could end in an acquisition of some sort. It could end in an IPO. You know, we all want to think about and talk about exits. But we are really focused on the hard work of raising that initial capital. And then it was CF can be round one. And we actually advise companies. So let’s start with I’m not a I’m not a broker dealer. I’m not an investment banker. I did play one to high school play. But that doesn’t really make me one. But I have been around a lot of deals. I got my start writing IPO roadshows for major investment banks. So it’s my first job out of college. So what I do see is that we advise a lot of companies to start with the CF that come to us for an A, now that it’s $5 million, raise the 5 million, accomplish a bunch of things, and then come to us in an A so that you can raise your valuation. If you want to raise $75 million, and your company’s worth 25. You raise 75 your valuations at 100, you know, on 25% of your company, or you and your angel investors on 25% of your company, not a great outcome. So there’s a lot of things still to Think about, it is not like the supply of gold. And then the second thing is, it’s really hard work. So that’s basically my answer. Jim,


James Row  50:13

are you my friend? Richard, I think it’s, I think you’re, you’re correct on the disintermediation, but I don’t think I would go and say that this is the end of VCs, by any, by any stretch of the imagination, for a couple of reasons. It’s kind of like 30 years ago, everybody thought we were going to go paperless. And we ended up using more paper than we’ve ever used. And I think it has a little bit to do with, I think it’s just another option. And I think VCs do serve a function for some companies just need VC work. Some can do reg CF, some can do a, I think it’s more options, I don’t think you’re ever going to say, oh, it eliminates  VCs. So I think it’s just another option out there. There’s some management teams that get kicked out by VCs are just not the right thing. The other thing is, is that VC funds just getting bigger, that has a lot to do with LPs just being lazy and not wanting to do direct deals, but just think it’s easier to do portfolio just make a portfolio investment in a VC group. Because they’re, they’re experts into picking who is going to be the winner. They don’t realize that the average VC fund now is 17 years long, but that’s a different story. So I don’t think I would go ahead and pronounce the death of VCs, I think you’re just gonna see more options for peep for issuers, to raise more direct funds. And as the market matures, as we said, with ATSs, and providing liquidity and some of these other things, you’re gonna see more interesting structures, and you’re gonna see things that I think are going to be more beneficial to the issuers than them just beneficial to the VCs.


Oscar Jofre  52:01

Yeah, I’m, I’m gonna dive in on this one, because I’ve always felt that it was kind of the two buckets, but now I’m seeing something different. I, you know, I’m speaking from personal experience in our company, we were fortunate enough to get three VCs, they’re small VCs, I mean, they’re only managing probably less than $500 million dollars, their portfolios, but the important thing is that they’re starting to see, I think Jim touched on an interesting point, which was we were very transparent and said, Look, we’re gonna do this round, and we’re gonna do a RegA. And, you know, so you’re not relying on them to come up with a follow up on which typically, and we did say no to certain VCs, because not because they didn’t like the deal we didn’t like them is that they didn’t want us to do a RegA. And for us, it was really important that we did that route. So I think it’s just as important. It’s not whether it’s Jim touched on whether VCs are good about it or not, there’s a certain place they fit, they serve 2% of the market, we need that that 98% of the market, you can have a mix and match. And I think we’re going to see that pitchbook said it best with reg CF Andrew recommends most clients is not a bank or anything that you should do a reg CF if you can, because you can raise up to $5 million. Now it’s in a great stepping stone to do a RegA to 75. So it’s you know, but you’re moving down this journey, this is a journey. And this journey doesn’t mean that you cannot include private equity group, family offices, venture capital, quite the opposite. They’re starting to understand, wait a minute, I don’t need to hang onto this thing for 10 years. I’m going to have liquidity to Jim’s point. So I think it’s educational. And I think we all need to work together. Because VCs do bring something quite valuable. They bring validation, they can assist the company to grow. They bring mentorship, things that sometimes companies do not have, you can have 1000s of investors, but you need growth to help you scale. Well, you know, that’s where so it’s, it’s a given day. Sorry, Andrew, my apologies. No, no, no.


Andrew Corn  54:02

All those are really good points. I just wanted to also bring up sometimes when you do the CF, first you find out the answer to an important question. Are you a lifestyle company? Are you a scale company? Because the the business plan may look really good. But it may end up that it’s going to be a very profitable company for yourself and a couple of 100 shareholders because you did it as a CF, but it’s not going to become a $500 million company ever. And in that case, you probably shouldn’t be doing the a plus. And definitely that’s why VCs may have said no is they just don’t feel that the market is ever big enough that you’re going to grow to where they will receive a multiple other investment that will make them feel good, you know or make their LPs give them more money to manage. So there’s a lot of motivation Going from the different groups and a lot of it has to do with, you might have a great idea. And it’s a great company. It’s just not a scale company. So that’s something else to be determined.


Oscar Jofre  55:10

Yeah, agree. Agree. So today, obviously, I hope for everyone, this was a kind of an overview, it’s giving you a different perspective into RegA things that you don’t think about. But they are part of the strategy, in fact that there is another part, we got about five minutes here, but I think it’s, it’s, we were touching on it right now. And we don’t talk about it enough. And it’s given me an idea that I think we need to include it, you know, we, we’ve been used, we’ve been going that you need, you know, you need a broker dealer, you need a lawyer, you need the auditors. But what we’re not talking about with these companies is how to structure your deal. And structuring your deal is to understand, to your point, Andrew, what is it is it, you just want to hit here? And that’s it? What’s the journey, because that is going to help you structure whether you need to do a reg D or a reg CF, to to go there. So there, there’s a lot of questions that need to be asked by the entrepreneurs, and their team and their advisors. And, obviously, we sometimes get involved in that. And yet, we’re not qualified. We’re certainly not we always pushed and said, Listen, you should be talking. So where should that conversation start?


James Row  56:22

Can I jump in on this one? Because this is


Oscar Jofre  56:25

how you want to jump in? I don’t know. Should we let them?


James Row  56:29

Yes, let me jump into this


Oscar Jofre  56:31

key somehow stuff. So we’ll


James Row  56:33

Yeah, we’ll just correct a Houston but that’s okay. I actually used to be head of a structure for major corporation for a while, to me, nameless, but always a sensitive thing to me. And most people don’t understand the concept of structuring. And I would argue that most finance guys don’t understand the concept of structuring. And I would also argue most lawyers don’t understand the concept of structuring. And I would say that most of them do it poorly. And it has a comp, it’s not something that you learn overnight. And it’s usually takes a combination of both legal and financial to figure out what is the best solution for a particular company, and to really do whiteboarding and structure and, you know, brainstorming to figure out what are the what’s some of the best avenues for a particular company. And it may not be something that just gets worked out in the first 30 minutes of any conversation. So it, Oscar, that actually is a webinar all on its own. And it could literally be mean, you could do some scenario analysis and go through. I mean, that if you want to talk about a, a webinar that would literally add a lot of value. That is something that would be no, I agree


Oscar Jofre  57:55

with you, Jim, it would


James Row  57:56

be a great way to do things and bring in case studies and go through it. I mean, it’s a perfect thing to do case studies on what would you do, and it would be interesting to have the dialogue between have a tax person, it’s, you know, a broker dealer per You know, I’m just getting it that that’s the way you have this. And sometimes there’s not a right or wrong answer, there’s, there can be a combination of, of answers. And it all depends. I mean, there’s a number of factors that go into this. capitalization that it can be crazy things that time of the year, the the where the where the company is in its lifecycle. There’s 10 factors that go into, at a minimum of what, what might be right for a particular company.


Oscar Jofre  58:43

No, thank you. And you’re right. So as we were talking about, it just dawned on me that we did Andrew, it love to hear your your, I mean, you and I deal with this all the time.


Andrew Corn  58:54

So I sometimes give a little homework assignment to issuers and say, buy the E myth, the entrepreneurial myth, it’s available as a book, it’s available as an audio book. It’s a very quick read. And it really talks about what it takes to turn a small business into a scale business. And then with that, you can communicate with professionals like Jim and lawyers and really be able to structure a deal well, but the valuation example I gave I think is really important for people to understand we want to go out and raise 15 million, and currently we’re valued at seven had to get that seven number. So if you don’t know how you got that seven number, you need to know that before you talk to a broker dealer so because you know they have a duty to make sure that valuation is fair. So


James Row  59:51

valuations the third question always asked.


Oscar Jofre  59:55

I took a guy so it’s okay, what are the


James Row  59:57

first two questions? What do you do with I see what and what’s your value? Those are the three questions. They never change.


Oscar Jofre  1:00:05

Oh, remember that. All right, everyone. So look, we’ve, we’ve, we started peeling it. There’s obviously a whole series behind this I am we are going to create a webinar specifically how to structure an offering, which, obviously it will be high level one day goal then but to get your mind thinking I think the Can you repeat that book again and do that? I sorry, I think I got it in entrepreneurial myth, e myth. Okay. And it’s available as an ebook and audio, right. Correct. Okay. Yes. So


Andrew Corn  1:00:37

paperback as well.


Oscar Jofre  1:00:39

And paperback. Okay, so, obviously, we’re giving great tidbits. All of you here today, as well, we’re providing you a free ebook as well. It’s equity crowdfunding 101. It’s just the basics. I mean, it, it goes more into detail of due diligence and how to prepare. But obviously, today, we talked about the new dimension of where this is going with RegA is up to 75 million. So I do want to thank everybody for coming out that, you know, today this morning, listening to these two great individuals, don’t worry, we’ll be sending you their details. So you’ll be able to reach out to them and contact them and be able to ask away your questions. We do have another webinar this afternoon at 330. This afternoon. I hope you can make it. We are obviously trying to cover all the items that you wanted to hear and listen to our speakers discuss. And this afternoon, of course, it’s the the infamous topic that we have RegA end to end. So this is a it’s going to be exciting. It’s not it’s, it’s, it’s really to go high level again. But again, we’re touching on the areas. So you get a grasp of all the things you need to be aware. So you come prepared. So when you speak to the lawyers and the auditors and people like Andrew, you have all the most of the information you need. still a lot of work ahead. So I want to say thank you to everyone today. All of this is available on YouTube. Just go to KoreConX, you can subscribe This was on Google live. So the video will be available in about three, four minutes right after this so you can watch it again. So I want to say thank you, Jim. As always, it’s great to see you in Houston. And Andrew, in your small city of three people. We’ll be talking again soon. The three of us so have a great day everyone. Cheers. Thanks, Oscar. You’re very welcome.


James Row  1:02:38

Good to see you again Andrew.

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