How to Raise Your Capital for RegA+


Etan Butler


Dalmore Group

Etan Butler


Etan Butler is Chairman of Dalmore Group, a FINRA registered national Broker Dealer Investment Bank, founded in 2005. Dalmore provides a full range of investment banking services, and specializes in assisting companies that seek to raise investment capital from individual investors through the SEC’s Regulation D, Regulation A+ and Regulation CF. Dalmore is among the most active Broker Dealers in the world for Regulation A+ offerings, having served as Broker Dealer on more than 60 such offerings in the past 12 months – including some of the most successful Regulation A+ offerings in history. Mr. Butler and Dalmore Group also provide business planning, development, and capital introduction services to public and private companies in a range of industries, and have participated in various capacities in significant investment, development, and other structured transactions. Over the course of their 15 years of investment banking activity, Mr. Butler and his team have been involved in the development of cutting edge and regulatory compliant approaches for the management of business development and the oversight of complex due diligence activities in the heavily regulated area of U.S. and multinational transactions. Mr. Butler is also President of EMB Capital, LLC, which invests in early stage ventures with a focus on real estate acquisition and financial services. Mr. Butler is a graduate of the Yeshiva University's Sy Syms School of Business. He is married with three children, and lives in New York.

Jason Fishman

SVP Digital Strategy


Jason Fishman

SVP Digital Strategy

Growth Marketing expert with over 10 years of experience leading Marketing Agency, Ad Network, and in-house Brand Marketing Teams. Jason is an expert in digital channels including Search Engines, Social Media Platforms, Programmatic Ad Exchanges, Influencer Networks, Email Automation, Content Marketing, and Partnerships. Jason’s accomplishments in these disciplines include surpassing industry performance benchmarks with both Fortune 500 companies and scaling startups, alike. Over the past 6 years Jason has worked with over 400 brands, many of which in the FinTech vertical and over 175 focused on Investor Acquisition initiatives associated with 9-figures of funding. DNA has developed unique first party investor data that has been instrumental in the success of these campaigns across Regulation A+, CF, and D raises. Jason has been showcased in Panel and Individual presentations at a high volume of Tech and Marketing conferences, along with his “Test. Optimize. Scale.” Podcast. He is also committed to a number of Thought Leadership content projects for 2020, including the Forbes Agency Council. Jason manages a Los Angeles team with experience in all aspects of the user journey.

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.

Oscar Jofre  00:00

[Uncertain] presentation to be doing here.


Etan Butler  00:01

You know we have, we have these we talk about this every day anyway. So it’s together, there’s no preparing. It’s more just you know, you speak from the heart you speak what’s really going on? Right, Oscar. That’s what you’ve been creating.


Jason Fishman  00:14

Yeah. And back when we see physical conferences, I would get pulled on stage all the time, all different types of personalities on there. But, you know, I reference Etan regularly with the amount of Reg A plus campaigns that you guys do. So again, as soon as I saw the speaker graphic was excited.


Oscar Jofre  00:32

Alright. It’s 1130 on the dots. So let’s get started. People are going to be starting coming in. But it won’t stop us from welcoming everyone. So welcome to the KoreSummit webinar series 2021. My name is Oscar Jofre. I am excited that some of our panelists are just finding out but that’s okay. They know this inside out. We’re going to be having a great conversation today about Regulation A I mean, it’s a hot topic for various reasons. And for most of you, the format is pretty simple. We’re just going to have a discussion. There’s no PowerPoint presentations here. As as it turns out, at best, we’re speaking from the heart. We’re talking from real experience. So you can and of course, you can reach out to the panelists at any time, you’ll be getting an email as well. At the end, we’re going to leave about 15 minutes for you to ask questions, put your hand up, there’s a little button there at the bottom. And as well, just so you know, all these series are being recorded. They’re available on the YouTube channel. They’re available on LinkedIn, and Facebook. So we’re making it simple. So everybody gets the pieces so but before we get started, I would like for our panelists to introduce themselves. So let’s start with Etan.


Etan Butler  01:47

Etan Butler, here. I am the chairman at Dalmore Group. We are a FINRA and SEC registered broker dealer headquartered in New York. We were founded in 2005. And we specialize in assisting companies too, who are interested in raising capital online at scale. In particular, Regulation A has been a big focus of ours over the last few years. Currently, we are the broker-dealer of record on close to 100 Reg A offerings, and we’ve been involved with many of the most successful Reg A offerings in history offerings that have hit their full offering amount objectives, and are either now in the process of listing on NASDAQ or are launching a second Reg A. It’s a space that I personally have spent a lot of my time have a lot to share. And we have a lot of experience. And I’ve been a close friend of Oscar’s for quite a while throughout this process and and blessed and grateful to be here with you all.


Oscar Jofre  03:00

Thank you, Jason.


Jason Fishman  03:02

Hi everyone excited to be here today. I’m Jason Fishman. I’m a professional marketer, turned investor acquisition specialist. I lead an agency, DNA, here out of Los Angeles, California. Since 2014. I’ve worked on over 200 investor acquisition initiatives starting with REG D going just at accredited investors, leveraging data partners from my ad tech background. Started working on reg CF right out of the gate in May 2016. Reg A plus campaigns for test the waters later that year and then heavy in 2017 have been focused on these types of capital raises ever since and can go in depth and our discussions today on exactly how we build marketing funnels, how we drive traffic into those funnels, all the work we do to target the right audiences to bring historical investment crowdfunding backers to the campaigns as well as a spectrum of different accredited investors. We a be test optimized towards what’s working best. And our clients are always asking us how to scale out hit higher levels. So can go in depth about some of the dynamics of those plans in our chat here today. And excited 2021 A lot of things in the horizon here. So perfect time for this chat.


Oscar Jofre  04:16

Perfect. Well, it’s great to have you both. And even in a short notice. I like giving people short notice that keeps their brain alert. But obviously the topic today is very timely, of course, how to raise your capital for Regulation A plus so but before we get into the digging into the discussion points, I want to give everyone an update because I don’t know about you, Etan or Jason, if you guys were pins and needles on Friday, but we were waiting for the final final final go. Most of you might have not known but there was a slight chance that the SEC was going to delay the they proposed new amendments. So we’re very grateful that the The new administration has opted not to interfere in what the SEC has already moved forward on, which means that 15th of March 2021, mark that in your calendars 15th of March 2021, Regulation A, you can now raise up to 75 million, and REG CF, you can raise up to 5 million. So let’s get started. Because it’s exciting to hear those news. But now everybody’s curious, you know, how to raise the capital. And there are many different ways we are going to approach this, obviously, we have about 60, something webinars and different bits and pieces, we’re going to cover it as a whole. Okay, so try to let’s do that. And we’re going to start it, you know, from the beginning. So people, so Etan, you both been there at the beginning part, just walk us through the very initial steps from a company one to use Reg A, and then getting started from it?


Etan Butler  05:54

Yeah, so So we’re at a very interesting time, it’s a historic time that, you know, businesses are finally able to have alternatives to reach out on their own and raise money from really anyone over 18, as opposed to relying on ultra high net worth, or venture capitalists or institutions. And at the same time, individual investors, average investors like us are given the opportunity to seek out and participate and invest in companies that they feel might become the next big thing. If this was something that was available back in the day, when Amazon and eBay and Yahoo and Tesla were going to market and we took a look at some of these offerings and participated, it would be a quite interesting position to be in. So that exists today. You know, with that, it’s a very, it’s a very powerful time. And with that, there’s, there’s a number of pros and cons that come along with that, right, because for the first time in history, you have the ability for unsophisticated investors on their own, you know, they’re being advertised to, and they get to identify and research and select opportunities to invest in. And, you know, in my opinion, you know, if you look, historically, most businesses don’t work, they don’t succeed. So it’s very important for anyone who’s considering investing in a regulation CF, or regulation, hey, to use your risk capital to realize that, you know, this is that not every business that every startup. Especially that you look to invest in, is actually going to work out. But at the same time, it gives you the opportunity to support businesses that are meaningful to you, brands that you feel a connection to industry industries that you want exposure to, you get to become your own venture capitalist, you get to build a portfolio of exposure to different investment opportunities. So I think we’re at a really interesting time, historically, for for your average investors to be able to participate here.


Jason Fishman  08:03

Absolutely. And you know, Etan did such a good job at breaking down the way these opportunities are now becoming available to retail investors and February 2 2021. Retail Investors are a big headline in the news, everything that happened last week, Wall Street bets and similar type of Reddit groups in many aspects as a marketer. It shows the power of community, of course, I want everything to be compliant, I want everything to be for a fair market. But at the same time, you get the idea that a crowd can raise $75 million on a Reg A plus campaign, when we look at reg CF campaigns and have a whole lot of data behind them. Which is why I’m pointing they’re leading into my Reg A plus type analysis, it may be 1000 investors to raise raise roughly $1.07 million, about a million dollars about $1,000 average investment value. Some of the rules are changing there, there’s going to be the opportunity for larger investments to take place, or historically one oh seven across all reg CF ‘s was the rule. But now getting to see those operate more like a Reg A plus getting to see, you know, six figure type investments taking place on a more regular basis. It could be a few 1000 investors, it could be higher volumes. But you get the idea that you know, with the right organization, targeting user owners, the actual customers of a brand and we’ve done this for B2B companies as well and seen key clients play a strategic investor role in furthering that that round. I’m anticipating a lot more of that occurring. It’s certainly part of our A B tests are very in test to see where we’re getting the best traction from our audiences. But, you know, speaking of 2021 further 2020 was a huge year, we saw equity crowdfunding increase month Over a month from March through the end of the year, and December being a record month, not always the thing in the venture capital community. Meanwhile, the traffic that conversions are happening 500 Plus campaigns were listed on kings crowd in December, you get the idea that the audience that’s growing around this movement is just increasing the awareness, the intent, the conversions, we’re seeing repeat investments on some rounds. And I want to talk more about investor relations, and how that plays a role once the first conversion takes place on these types of campaigns. But there’s never been a larger audience than today of historical equity, crowdfunding investors, and therefore opportunities for founders to get more traction in a quicker window of time.


Oscar Jofre  10:49

That’s it. Okay. So obviously, the Interland let it off. We started with the investors. So the crowd the, whether it’s the external crowd and the internal crowd, statistically speaking, they’re coming out COVID-19 We can all agree, the best catalyst we’ve all had, you know, there’s a downside, but it’s been great for the industry and bringing everybody online, forcing all of us to, to really in ignited, you know, in many ways. So the, so that, that the crowds are an integral part of having a successful raising your capital, recognizing that you’re doing that. So that’s one element. The there’s the investor side. So now the racing your capital, you need the regulatory side of it, right? So let’s touch a little bit on that. And I just want to keep hopping it in elements. So the crowd here listening in can see that this is an important element of the of the race, you need that in and out crowd. Now. You need the regulatory element. And a time, you know, you’re a registered FINRA broker-dealer, if anybody under extends the that part. It’s certainly your firm.


Etan Butler  12:03

Yeah, you know, look, you know, why does a issuer hire a broker dealer, right. So first, it’s to conduct your offering through a regulated entity that is licensed to make your offering available in all 50 states to oversee the KYC, the Know Your Customer, the suitability, the OFAC checks the AML, as well as the diligence on the offering itself and the and the principles, the officers and directors of the company, and also overseeing the diligence on all the investors. You know, it’s a there, but it goes beyond that, you know, the broker-dealer has an opportunity to really assist with the capital raising the distribution and the advisory to help assure that you have a successful capital raise, right. The way we approach this is that in the advice that we give some of our issuers is that you really, you know, Reg A is a is simply a tool that allows the issuer right in every company is different in every industry is different. You could raise equity, you could raise, you could make a debt offering, right, you could provide yield to investors, you could you could provide fractional ownership interest in dedicated assets or real estate or collectible items. So it’s so every, every situation is quite different. The key is to understand who you are, and to leverage your strengths, like I said, so for a company that’s a consumer products brand that has 1000s and 1000s of users or customers, this is a real interesting way to approach those customers, and give them the opportunity to become investors as well. Right. And once they become investors, there’s a whole other level of loyalty to the to the brand. You know, so again, each each each, each situation is different, whether you’re raising equity or debt or whether you’re a series issuer, looking to release you know, dedicated assets that and offer fractional ownership participation, and then each one is very different. The other area that we’ve been focusing on is something that I call it digital distribution. I think we may have coined the the word but and what it means is that when you look at how broker-dealers and investment banks typically handled syndication. An issuer who was looking to raise capital would hire an investment bank, that would be their kind of their lead broker, right. And their job would be to raise capital from their their contacts or from their customers, and also to approach other broker dealers or investment banks to build a syndicate right to leverage everyone’s resources and skill sets. The the Reg A digital distribution is a bit different. In that there’s people are calling their investors with $1,000 investment opportunity like they would be with a Reg D that may be a $100,000 investment minimum instead you have established marketplace platforms, companies like start engine and seed invest and Republican we funder excellent platforms that have done a great job in spreading the awareness and building up a growing network of investors that are interested in viewing and participating in vetted opportunities. Downwards approach has been to offer the issuer the ability to have their own independent page of a low-cost commission, where they could direct all of their friends and family, their promotional efforts, their advertising, and even to direct some of the institutions that they may meet. They may know who could go directly to their page to participate, while at the same time we give our issuers the opportunity to get listed on some of the premier marketplace oriented platforms and put them on a commission only basis, right. So you kind of get the best of both worlds, you get the, your own dedicated landing page where you could direct all of your promotional activities to, but you also have the opportunity to list your offering on some of the more established marketplace platforms. And some of these platforms now are boasting half a million, you know, potential investors up to a million investors. And that’s pretty, that’s pretty profound. So I think the industry is growing. And I think, you know, we’re always looking for, you know, cutting edge distribution strategies that we could, we could, that we could offer to, to our clients as well.


Oscar Jofre  16:26

Okay, so. So obviously, from a broker-dealer side, being one of the items that you need in order to do you’re offering it, in your case at Adelmo, you guys are bringing a little bit more than the typical BD does, which is, it’s the compliance. But there’s other elements. And as you, as you noted, it is evolving, I think we are going to see something very interesting in 2021, because of the increase, but there’s some other elements as well, that I want to make sure it’s covered here for the audience. And that is that, you know, want to make sure that everybody touches on that, along with a broker-dealer, you are engaged with a lawyer whose dude, I know, we take it for granted that people should know this, it would surprise you how many people still think that they they can do it themselves by copying a filing from somebody else? No, it doesn’t work that way. Having a lawyer is a critical piece, you know, as best practices have been a broker-dealer, some would say, Well, I don’t need it. Well, we are we we are the other opinion that you do need it. Because today, there are seven states that don’t allow you to sell it directly. And maybe there could be more, but what better protection for you and your shareholders than to have a broker-dealer to be there alongside to make sure that your advertising, your marketing that you’re working with Jason is being done, according to the regulations. But as well, there’s other regulated pieces that go along with that, that offerings that are needed as part of, you know, your raise, such as having an escrow provider, that will work alongside with the broker-dealer. And then of course, an SEC registered transfer agent that again, so as you’re noticing with all of this, the crowd, that inner crowd that he kind of started with, and Jason alluded to, is that the inner crowd is it’s always it’s your team, is this, the people that you’re bringing together for your offering. And it just keeps growing. It starts with one person 100 200 1000 100,000 and keeps growing. And then of course, the piece that everybody’s interested in, of course, in how to raise right, it’s got to be the marketing, it’s got to be the investor acquisition, it’s got to be I see those parts are important. But if you don’t have these, these things don’t happen. I’m just, I’m blunt about that. Because I’ve had too many companies that come into the door. I want to do a Reg A. Just introduce me to Jason. Well, who’s your lawyer? Who’s your BD? Well, I don’t really need that. Okay, well, I don’t want to be the risk taker. You know, so it, it we have a responsibility now that it’s come upon us as an industry. So but let’s touch on that part now. Because it’s a hot topic. So you talked about Etan’s time initially, about the inner crowd and the external crowd, but there are other ways that companies are utilizing to raising their capital that have been successful without going to an of course. Jason, I’ll come bring you right back on that.


Etan Butler  19:30

Yeah, it you know, what we’re seeing is, you know, originally, you know, in 2017 18, there was a perception amongst some of the venture capital firms and and that, you know, how can we really treat a company seriously if they’re going out and raising money from, you know, non sophisticated investors and they have 1000s of investors who put small investment amounts on their credit cards in the offering. There was a concern about about perhaps the quality or the reputation about getting involved. I think that’s changed significantly. I think there’s much greater adoption, I think we’re seeing the the sophistication and the quality of the issuers have have been increasing over time. Domore has a large portfolio of publicly traded companies, companies that are listed on on OTC markets that are that are that are trading on NASDAQ, we even have a few new york stock exchange, listed companies that are signing up to run Reg A is with us right now. You know, and we’re seeing interest amongst venture capitalists, as well as private equity firms that want to participate in red gaze, right? So again, in the beginning, the concern was, hey, wait a minute, you know, issuers can take advantage of the fact that they’re going out to the crowd, and they don’t have to go and convince a venture capitalist to invest. And as a result, we’re gonna put a very high valuation, right, because, and someone who’s putting in a few $100 might not care or understand what valuation means. Okay, that might be the case for some, but that’s not that’s not what’s really sustainable. What’s really sustainable is to create an offering, and to have integrity with it, to realize that you’re raising money from people that work very hard for that $500 that they’re investing in your offering, and you have an ongoing relationship with them, which is why you need a good transfer agent Oscar, right? You need, you really need to, you really need to take that part of it seriously. A couple examples, we have a one of our series issuers, who just received a commitment from a private equity firm to invest it 5% of every asset that they release going forward. That’s interesting, isn’t it, I mean, 5% of every single deal that they do, they’re committed to, we have a company gauge cannabis that just completed but I think is a is certainly a record breaker for Dalmore. They raised the full $50 million in three months, three months, and out of that 50 was over $20 million of institutional capital at the same terms of the offering. Right. So when you have an institution that puts real money into a deal, that gives confidence to the retail investors to follow that right, that’s, that’s an edge. I think we’re gonna see a trend rather than have a Reg A or a Reg CF that has a ridiculous valuation that you’re going out to the average investors on the one hand. And then run a parallel reg D that has more realistic valuation or terms that you that you aim to go to institutional investors, the right way to do it is to have a fair valuation. And that and that way, you could bring institutional investors and customers and clients and retail investors into one. We have a a number of private equity firms that are that have contacted us and are now investing in many of the publicly traded Reg A issuers that that were that we’re working with as well. So we’re seeing more and more institutional interest as well, we’re seeing more of a need now for companies that have plans to get to go public, that are getting listed on NASDAQ right now that are looking to us as the broker-dealer investment bank to really help them from dollar one through reg CF for Reg A, all the way through a successful Reg A secondary market, you know, trading and the Quiddity, all the way to listing on a public market exchange. So it’s evolving, it’s evolving quickly. And it’s been very exciting for us.


Oscar Jofre  23:24

Sorry. So Jason, I mean, you started talking about when we started early on, about, obviously, we’ve had a lot of success with online investing the 20 2011 with COVID-19. And obviously, it’s superseding even some of the venture capital. But we’re not here to pick on it just capital’s capital moving forward. But obviously, the the the techniques and the approaches that have been done, let’s talk a little bit about that. Because obviously, you know, Tony’s talking about it from a broker dealer perspective. Now, how does that all tie in together from an issuer? When Here you are, you’re not a broker dealer, you’re working to bring that success to the company that has a broker dealer behind it?


Jason Fishman  24:06

Yeah, absolutely. And to start, couldn’t agree more with you guys, legal broker, dealer transfer agent, that’s where the conversation needs to start, I’ll get asked those questions at times, fairly easy for me just to say, Hey, that’s not my lane, you need to talk over there and get the right rules. Compliance is number one. But from there putting together a marketing strategy on how you’re going to build that crowd, how you’re going to engage that audience, picture 717 touch points to get to the points of the funnel where you could see an investment. We use these tools for the conversations that would take place with an accredited investor institutional money, by the way, amazing to hear that story for 15 million in 20 million lead that type of lead anchor investor from institutional capital, how powerful that is in terms of social proof. I know that goes back to reward crowdfunding and being able to have a portion of the round already committed says something very loud and have used analogies, like an empty restaurant, sensation, if there’s no meaningful capital in the round that’s showing publicly on an offering page. Or if it has strength in numbers, and that line around the block type of feel, and how that attracts retail investors, but but even in the institutional world, even the VC community, I would always hear about anchor investors and how that validates the deal. So you know, going back to the strategy, you want to take all that into account, you want to understand the marketplace, the competitors, the other groups in your vertical or have similar type offerings and how they’re obtaining digital market share how they’re bringing on investors today, success leaves clues, and I can tell you, things are happening much different here in February than they were in August. We never had the word clubhouse and a marketing strategy in August. So you want to see how it’s being done, which mediums how things are moving along, before even building out the framework of your plan. I then get into audiences, marketing channels, and creative who you’re looking to reach, I break that down at the persona level, I want to make it a person I could call by name, to symbolize that audience and get a better sense of which channels are really going to influence their decisions, you know, how the creative is going to resonate with them, making it real having an understanding of everywhere they go online, so you can have a presence there. Building out those marketing channels determining the messaging, determining the video, the imagery that you’re going to use, there’s different rules to be compliant there as well to Tombstone type information is common. If you look at advertising creatives for this industry, there’s a lot of similarities, where you know, there’s a summary of the company in a sentence, then three bullet points underneath, invest in the future of this industry, or follow this many investors, this much capital raised is commonplace for that type of messaging. But whatever you roll out with, you want to let the analytics confirm what’s working assumptions. One thing, spent a lot of time in 2015, talking about how investors would react to reg CF campaigns online, the analytics are completely different things. So as you’re actually seeing the reports, as you’re seeing the impressions, the clicks, the conversions, and how that algorithm flows from any marketing asset that you’re putting out, you can start to gauge hey, if I spend here, I’m getting more of this traffic, it’s returning at this level, it’s not always about the cost per acquisition of each investor that may be more applicable to a retail investor conversation, if you’re getting a higher quality. If you’re getting institutional type inquiries, VC, angel investors who are participating at much higher levels, you may be far more comfortable paying for a lead than an investor acquisition. But knowing the quality there and how those conversations progress, and how you could be at the end of the day, seeing a much stronger return. So having laser focused on the analytics, letting that tell the story, and determining in real time where to go from there is huge. I mentioned advertising a lot because it’s so scalable. If I see something working, I can increase it to x, run it for the next three to seven days, get twice the amount of traffic, maybe twice the amount of conversions somewhere in that range and continue and continue and continue. It’s a strategy that’s been used time and time again, in reg CF campaigns where budget may not be huge, but we still do it to some level on Reg A plus campaigns still at a much higher volume than Reg CF, but a higher starting point. And then increasing once we see performance, it’s a more comfortable conversation for all sides of the table by the way, agency, the issuer. Being able to roll it out to higher volumes of investors, all sides, once it’s working is very commonplace. We do some direct outreach as well. LinkedIn is an underrated platform for that have all types of recommendations on what virtually any professional should be doing every day on LinkedIn, and how that can fill your calendar with ever whoever you’re trying to reach whatever type of investor for issuers or partner they’re trying to put together. And through a combination of those approaches and a plan. Were able to come out of the gate. The The one other thing I want to add is as Oscar’s talking about the crowd and how the crowds growing as larger crowd he’s think that you need to pull in retail investors to complete around I don’t care if it’s 1.07 5,000,050 75 million. It’s typically more if you’re looking at average investment values for Reg CF or even a lot of the Reg A plus campaigns and some of the on some of the portals that he tunnels mentioning. The average investment may not be that high and average conversion rates certainly are not that high. Just to give you an idea 100,000 visitors 100,000 perspective, we’ll just call them retail investors for this conversation because the credit investor average investment amount can can change up so much. If you’re getting 2000 completed investments from those 100,000 visitors a 2% conversion rate, that that’s, that’s good by digital standards, that’s a that’s a strong conversion rate. The point of this is you need a whole lot of traffic to produce a decent amount of interest and a strong enough and effective amount of investors for going back to that $1,000, average 2000 investors roll it $2 million. There’s all types of tactics to stimulate peer to peer marketing from their second investments back to investor relations, being able to get higher trust, and therefore higher amounts from tha. I could come up with a bunch of tactics to turn that into five or 10 million, but you get the idea, a lot of traffic to produce a decent amount of performance.


Oscar Jofre  30:47

Perfect, sorry, I was on mute, I was ready to go there. But you were on a roll. And that’s interesting. You know, the, obviously we’re evolving this conversation with the investor acquisition to be a little bit more methodical now. Because there is another element that’s been tied in. And it’ll be interesting to see, as more companies come in, I remember in 2012, when I first wrote the book on equity crowdfunding. I included in one of my chapters that any company doing any form of crowdfunding, whether Regulation A or CF at the time was coming prepared with 30%. under your belt, there was the rule of 30. And because at that moment, all we had was that if a company had 30% already under its belt, it could actually begin the process. But it’s interesting over the years, we we don’t talk about it anymore. We’re just leaving it aside. We do know the platforms are asking companies to get that on their own before they get behind it in a quiet way, of course. But it’s interesting, we’re back at it again. And part of it is because they think a new form of investors coming in another investor that typically in the past would have said, you know, this is crowdfunding stuff, good stuff. I don’t want to have anything to do with it. No, they’re, I think now they’re seeing, Wait a minute, there’s some real company opportunities that we didn’t get involved with. So now, it’s even more critical that that strategy that some entrepreneurs might have not even thought of where I want to raise my capital, I budget it for the money for all the investor acquisition. And no, I haven’t spoken to anybody on this side. And maybe that’s another element, we need to add now start talking to those private equity groups that are investing in your space to your point on it, I’m sorry, that it’s important for them to see how that all fits in. Because we, we haven’t seen it before we read it. And that’s part of this movement that’s occurring right now. It’s changing. That’s why this discussion is going to continuously keep moving forward, because something else is going to be coming in. So there was one question I have for the both of you, if I put you on the spot, I don’t mean to but if you don’t know the answer, that’s fine. as well. We do talk about advertising. There’s a there’s a lot of discussion about advertising in two different forms. So obviously, digital for meeting online, we know the SEC has no issues with it. But we can’t disregard the biggest audience in the world, which is television. So first of all, it doesn’t have you dealt with it yet. Have you done it? Have you been involved with any issuer that’s been doing television advertising?


Etan Butler  33:34

Not that I’m aware of on the television side there. We were asked a few times, Mike, my compliance team would be better suited to to answer that, because it’s a technical discussion. It gets pretty in the weeds. But we you know, we’ve been approached in the past. And whenever we are we typically defer to our securities counsel and our internal compliance. But it’s not typically done on television. This is 2021 Right? People are everyone’s looking at their mobile devices in their in their computers now more than more than, more than a TV because you have more controls where you could click on something and you could follow something and you could see the appropriate disclosures and disclaimers. And read the one where it’s more challenging process if that shows up on TV or on the radio. Right. So I think we’re a podcast, right. So so so right. So we’re, you know, certainly we want to make sure from from a compliance perspective that that the investor has full access to the appropriate disclaimers and disclosures and is encouraged to click on the one A to read the background on the principles. Read the business plan and resolve all the risks and disclaimers and disclosures that the issuer is required to make. That’s the that’s the appropriate way for a for certainly for an unsophisticated investor to to go through a decision making process to consider investing their funds, right. So it’s not something we’re seeing have on the TV side.


Oscar Jofre  35:02

Jason, yourself. How are you?


Jason Fishman  35:05

Yeah, I agree with you, Etan there, I could tell you we do have a Reg A plus campaign that’s in planning, test waters is about to roll out. And they are going to be doing broadcast outside of us. In fact, it’s not our specialty by any stretch, and subscribe more to the Digital School. And for 2021, as he turns speaking to, you know, there’s a reason Facebook has to limit political ads. And you know, that’s such a powerful medium, I can reach someone who backed a deal on a specific portal at a specific household income level, and has an affinity for a given industry, they’re passionate about it, I can reach just that audience with digital. We also have access to connected TV broadcast on digital devices. And we access that programmatically fancy way of saying there’s a software that uses machine learning across remnant inventory, unsold inventory across, you know, 1000s or more publishers, and we could choose the channel that we’re advertising on there. I know it’s been very successful, I think nightscope and even start engine used it for their Reg A plus campaigns. You know, for me, it’s all about building out that strategy, looking at Channel allocations than setting up tests to see what’s going to perform best. Historically, broadcast would be more on the branding side of advertising versus direct response. It could be built in a direct response commercial. But as Tom was saying, you’re starting to, you know, cross the line there in terms of how hard you’re pushing it. So if it’s done the right way. You know, some would argue TV is built to sell advertising. And if you look at some of the shows that go on through the day, it’s to keep you tuned in to see the next ad break. And being able to get those media budgets secured. You look at the numbers behind it, it’s the revenue model. But for us, Facebook, Instagram advertising has been the strongest channel, Google can be hit or miss. There’s about five other channels that we could use, we like to be able to place pixels. The pixels allow us to retarget people who come through, they also allow us to track who comes through and completes an investment, as well as the transactional value. So we can measure return on ad spend type of setup. Were channels that don’t include that such as broadcast, that could be code typed in, but that there’s a lot of holes in the analytics, and it gets much tougher to optimize and scale from there.


Oscar Jofre  37:40

Okay, so it, it has been a discussion, I think we’re going to hear more about it. And I to it turns point, it is a compliance and more importantly, it’s a regulatory element. We, and I think we need to be aware of it because some audiences, so it’s really well suited for certain companies they go, you know, it’s, it’s where my audiences, I want to get at it, and how do I leverage it, there is a way to leverage it. From the from the the advice that we’ve been provided from counsel has been that a company can utilize this regulate process, but only before their offering goes live? Well, this is really an interesting point that paying attention to so what return and Jason have been alluding to is, when you’re putting out the strategy raising capital, it’s not like you go live day to day, that’s when everything starts. There’s a lot of things that are getting done the way in advance, there’s Sure I’m sure your program, Jason starts 60 days in advance. And I’m sure you’ve done is talking to potential, you know, investors way in advance of your offering without obviously disclosing any information. But advertising on television is one that we are now going to see. And again, to return the point is that you cannot advertise the offering because you cannot make the offering available to the investor at that moment. That is the the one thing that the SEC is black and white about is that so digital media is the is the best, but there is a way to use it prior to your offering. And the question is, what are you going to advertise? Well, you’re not advertising the offering. You’re really building brand and I glad you said that, Jason because it is something people tend to overlook and all this is that while you’re doing your capital raising, you’re building a brand awareness. You’re not just putting money out there for the capital raising this. Raising your capital for Reg A comes with a lot of great benefits. Obviously, you’ll raise your 50 or 75 million that is without a doubt a wonderful thing, but you’re getting something else Well, you’re getting a brand awareness that often you do not get with other capital raises. So give me an example, if you did a Reg D, or credit investor, he raised 75 million from 15 people. That’s it. Me, you know, you put it out there, it’s it’s that you raise 75 million from 40,000 people, that brand is just reached that many people that could touch on to 10 other people for your brand. So you’re getting a very free element that most of us have not wondered, and part of your strategy on how to raise capital is to deal with that crowd. So we’ve talked about the crowd. So I want to finish off the last five minutes into now that you completed that round, and your spin successful audit. I mean, on average, what we see is anywhere between 10,000 to 50,000. Shareholders, new holders, and there are companies who are I know, they’re going to do it again. And they’re going to be able to do it successfully, versus those that don’t. And it really comes down to the strategy at the post-element side. So I mean, I don’t know what role you’re playing on, not eternal. Are you providing any guidance to companies, part of your strategy of raising your money is you need to have a plan afterwards? Is that part of it for you guys?


Etan Butler  41:22

Well, yeah, I think each company is unique, right, so you have the series issuers that have their own apps, and they’re looking to build communities of investors and constantly release opportunities for investors to participate in fractional ownership interest of unique assets, like sports cars, and Michael Jordan rookies and, and and racehorses and Lamborghinis and real estate. So we’re seeing an explosion of that their model is to build up a loyal base of consumers of investors, and constantly release more and more opportunities for them to participate. Some companies use Reg A in conjunction with wanting to become publicly listed, that is their end goal. Right, some of them just need a certain amount of growth capital to make an acquisition or to pursue their their business objectives, right. In either case, they need a solid transfer agent, they need good shareholder communication, and they need that to be as seamless as possible, which is why we at Dell Moore really enjoy working with KoreConX. Because you guys are really on the you’re an example of a of a firm that is innovative, and really on the pulse of that, right. And so, you know, that’s really, sometimes it’s simply a matter of us playing our role to facilitate a successful capital raise, and then pass it over to Oscar and KoreConX, and you handle the shareholder communication going forward. Some issuers have an interest in secondary liquidity, right? And that’s something that we were talking about for years. Not everyone, really, not everyone cares about it, right? Not some some folks stuff. But more and more people do and more more people will and more and more investors are going to start to really expect that now that it’s a thing. And now that it’s real, right. So we don’t worry if we’re not in ATS. But we have partnerships with a number of eight broker dealers that do run ATS, and it’s and it’s a real thing, there actually is secondary trading going on for these for these, for these assets for these investors. Similar to what they would expect in the public markets, right, where there’s a bid and an ask on those on those securities. It’s particularly meaningful and important for fractional ownership interests, right? Because when you’re buying a $30 position in a Michael Jordan rookie card, you really want to be able to sell that, you know, if you can, whereas if you’re buying $1,000 investment in a cannabis company, that’s a startup that might become something spectacular down the road, you might not be thinking as much about secondary liquidity today. But it’s certainly a wonderful thing to have, if you can. So I think that you know, every issue was different. Again, Reg A is most people look at it as it’s a way to raise money online, it’s way more than that. It’s the ability for issuers to take a equity or debt share class structure and offer it to the masses. Right? That’s really what it is. It happens to be done online. It happens to be done online. But it’s not just like Kickstarter and Indiegogo, it’s not just like a what people think about an online thing. It’s a real investment with real investors. Similar to a Reg D investment, the only difference is more people could participate. Right? So we have to always remember that.


Oscar Jofre  44:33

The numbers really make a difference on your strike. And I do agree with you now that we do have secondary market, the responsibility is even more critical. And where I was really getting to is that, you know, companies do so much work in the beginning to do their capital raising and communications, social media and all that. Then their deal is done. They raised our money and they stop and that breaks my heart. It breaks my heart because those people that bought in bought into the story they bought into the communication felt Well, finally something different than what the public companies do. And I want to make sure that we finalize that commitment here. Because secondary market, I agree with your tone 100% We see it, not everybody wants it. No, it’s not about whether they want it. It’s a feature now that is there. And if you don’t offer it, they’re gonna go, why don’t you offer it, it, that totally means it doesn’t mean they want to, if they really believe in your company, they will stay with you. Because I’ve seen it, I got a client right now that it’s had shareholders for maybe four or five years. They’re not going anywhere. They love the story. They’re embracing it. And they’re communicating to them as if they were clients. And I think that’s, that’s the big part, I think that part of the capital raised, how to raise capital is understanding the whole scope of it. The town started really, really interesting. Make sure you understand the crowd that you’re bringing in, make sure you understand how to nurture and then we start bringing in your, your advisors are the partners, that broker dealer, the lawyer, the auditor, the transfer agent, the investor acquisition from, that crowd gets really big. There are some meetings. I don’t know if you’ve been in them, guys, but there are 22 people in a video call with a client, because we’re all in it together, we all want them to succeed. And that journey for them, it’s critical that everybody’s on the same page. And then that extension is just getting started on the other side, when the holder start coming in. So it I think it’s really exciting. What’s about to emerge. I, I’m looking forward to 2021, from the perspective that I think we are going to see a different modeling for accessing investors. We know it’s there. We know that the dollars are there. We know that people are there. The question is, all these different techniques, plus, these additional approaches are going to further enhance the offerings. And again, just really open it up. I really believe 2021 will be the year where a banker underwrites a Reg A deal from top to end, they just take it boom. And that will be a game changer that will Whoa, what just happened there, right? Where right now, they still, you know, it’s still 7030, right? 70%, the company needs to do the heavy lifting to get that 30. But that’s okay. It’s better than where we were before. And in the early days where there was a lot of ambiguity around this. So I want to I’m cognizant of the time and obviously, we have a number of attendees here, the staff this morning, obviously, I like to leave this portion of hands are coming up already to ask questions. Keep it in mind that obviously, some of you have attended other events before that there. We’re going to give everybody an opportunity to ask your questions from Jason, and it’s on here. All right, Tom, you’re on.


Tom 47:59

Hello, and thank you for this presentation. Very interesting, especially in light of the regulatory changes. On that front. I’ve heard some discussion of the results of the change in administration on this regulation that just came through and was just published to increase the amount that we can raise from Reg A plus to 75 million. The the there’s a regulatory freeze now that the administration has put in place as of last week, and there’s some discussion that that regulatory freeze could impact this rule change, because the new administration could pause or maybe even change that rule change as part is regulatory free. So I wonder if you have have heard anything about that have any opinion on the likely impact of this regulatory review on the recent rule change?


Oscar Jofre  49:01

Great question, Tom. So you probably missed the beginning opening on January the 29th. The SEC met and at 11:38am. Eastern Standard Time. It’s official, they’re not freezing. It’s moving forward. It wasn’t it wasn’t a freeze to the SEC. It was a freeze to all the agencies. The SEC did not fall into that. So full speed ahead on Reg A for 75 million full speed ahead for REG CF for 5 million. So no more roadblocks getting in the way for your capital raise. Alright, next, Alejandro. Here you go.


Alejandro 49:42

All right. Good morning im a CEO of a publicly traded company in Canada. And my question is, since we’re dual let’s not say dual listed, but since we are traded on both exchanges, and I’m pulling reporting with the SEC, what else we’ll be able to You know, comply with a with a Reg A or the CF or what I have to definitely change the principal primary listing from Canada to the United States?


Oscar Jofre  50:11

Etan, it’s yours.


Etan Butler  50:13

Well, I usually have our compliance team respond to questions in case I missed anything. But it’s my understanding that that Canadian, both Canadian companies as well as US companies qualify for, for running a Regulation A offering, whether they are public or private. But again, I want to be careful, because you had a couple details in that question that I would I would like to run by my compliance team, you could certainly reach out to me and I could get a specific response to you. But my understanding is that that you would qualify.


Oscar Jofre  50:51

Yeah, the only the only thing out there a Canadian company cannot use Regulation CF. So we just need to create a sub co Sara Hanks wrote in our a blog, you can go to our blog, it’s all about foreign issuers, in particular Canadian companies creating this Hoko in the US using reg CF and then doing a Reg A. It’s the suicide, it will kill your Reg A going forward. So but it’s on this correct, a Canadian and US company can use the regulation. You don’t need to form a US entity IFRS statements are applicable, you don’t need to convert them to GAAP, which is really great. And you still need to follow all the rules, the same regulation. But the the only regulation accessible to Canadian companies is Regulation A plus? All right. So Francoise I’m bringing you in? Sorry, Jason, did you have something to add to that?


Jason Fishman  51:47

Sure. Yeah, just a one sentence. We’ve worked on campaigns where we had to target different audiences for Canada and US and they’re going through different portals. As he turns mentioning, for compliance, I say the same thing. We’re just marketing it once it’s set up. But there is a way to do it. And you can build separate funnels, target the different audiences and make sure everything is following the rules from there.


Oscar Jofre  52:12

Perfect. Thank you, Francois. You’re on.


Francois 52:14

Hi. I’m a complete novice to all this subject. And I’d like to understand a little bit more about the basics. Basically, you spoke about Greg A, C, F. What are the respective minimums and maximums for each of these methods? Etown.


Etan Butler  52:39

Right, so So currently, companies are able to raise up to $1,070,000, US companies are able to raise up to $1,070,000 through a regulation CF offering from anyone over 18 years old. And that is going to increase to up to $5 million on March 15. That’s regulation CF Regulation A or Regulation A plus, it’s often referred to allows for companies currently to raise up to $50 million. And they could be both US companies as well as Canadian companies to raise up to $50 million from anyone over 18. And that is going to increase from 50 million to 75 million on March 15. That’s the that’s the maximum. There, there is no minimum, right. And as far as the minimum investment amount that is up to the issuer. We have issuers who have, you know, $100, minimums on a per investor on the investment side, and we have issuers that have you know, 2500 or $5,000, minimums, right, and that really depends on your strategy. If you’re a consumer brand. And you have 10s, or hundreds of 1000s of subscribers or users and you want to make it you know, the threshold easy for your average subscriber or user to participate. You might go you might opt for the lower size if you’re more of like a business to business company. And, and you know, with a different type of a demographic of investor you may opt for a slightly higher amount than that.


Oscar Jofre  54:17

Perfect thank you. Jason. Did you want to add to that? I mean, we got to cover got it covered. Got it right Trung Pham you’re on.


Trung Pham  54:30

Hello. Hey guys. How’s it going? Um, I had a question about JC you mentioned clubhouse, and I’m always trying to be cautious not to tread the legal line. But why is there a difference between advertising on TV during a Reg A and just saying something like. Learn more at invest, invest, invest in Rise calm versus promoting yourself in a webinar, a pitch events or clubhouse And just having a discussion and say, Well, we’re actively fundraising, but come to our website to learn more.


Oscar Jofre  55:05

Well, just like you’re doing it right now,, you can say whatever you want right now until you go live. Yeah. So I, when you go live, the SEC has a very different view of it all. And I do, I think I mean, look, I agree with all of us, we’re trying to figure out, but I think what it comes down to and please sit down. I mean, you’ve seen it, what it comes down to from the SEC perspective is the following. When investor is making an investment decision, there are required to have right there in front of them, the accessibility to the offering document, which is the link to there to add. So on television, that is the problem. There is no way now there are new televisions are granted I, I am one of those where I could see a commercial and I can go to my screen and touch it and boom, it automatically. I got it. But I think the SEC is going by 90% of people do not have that TV. So it’s on leave it to you


Etan Butler  56:04

know, you know, it’s a it’s right. You know, we have all of our issuers need to run all of their marketing and promotional items by our compliance team for review, in advance. And like you said, Oscar, you’re right, when it’s when when something is done on on TV or informal means it can be challenging, right to to do that. There is an exception right there. There’s a you know, I’m a big fan of my brother Darren marble, he’s running a series called planning a series called going public that’s going to be streaming online. So it’s not necessarily TV, it’s online. And that gives you more features to make this offering circular available. To, to to viewers, right. So there are exceptions. And there’s differences between traditional TV and kind of internet generated streaming shows as well. But ultimately, it comes down to protecting the investor making sure that they have access to the diligence, to the disclosures to the disclaimers that they deserve to be able to see prior to making an investment decision. Right. And that’s really the the root of of this discussion of this analysis.


Oscar Jofre  57:15

Thank you for that. And that is and that there are ways of doing it. But that’s why I brought it up because I know everybody’s talking about it now. And there is a company that’s why I got wind of it. And I’ve seen it and I’ve been having the same question. I brought it to Sarah Hanks, I brought it to a few lawyers, I’m sure you have as well done. And you know, she’s pretty black and white, she goes to Oscar, they say this, but see that bottom part right here. That’s the ambiguity. And in I don’t know, if you want to play with ambiguity with the SEC, in particular, when they the only outfit they gave out are orange. So alright, rolling, you got a question for us?


Rolin 57:58

Hi, can you hear me? Yes,


Oscar Jofre  58:01

You’re on. Yep.


Rolin 58:03

Well, maybe we can help in that aspect, talking about connected TV, because that’s what info is all about. So we can embed those ads with a code. If you have our app, you can actually connect with that ad instantly. So it’s like, you know, it becomes from an analog or offline channel to an online channel. So people can instantly connect to the offering page, which is similar to any digital environment. So I don’t really see the difference. Given that we can instantly connect them to the offering document.


Oscar Jofre  58:49

Listen, Rolin is a great point. Thank you for that. It’s great to see products that are coming out to solve the problem. The issue, I think what everybody should hear, we’re all for it. I don’t I think you would, why would we not want you to have that exposure. It’s not about whether we don’t want to allow it or, or anything like that. Whatever you do, whatever lawyer you’re working with, there’s only a handful of good lawyers in this ecosystem that will protect you and try to understand that it’s about protection. So if they feel uncomfortable, and if the broker-dealer doesn’t feel comfortable with it, because it puts them at risk as well, then you’ve got these are the issues that we’re dealing with. We need to satisfy the SEC. And so wherever Scott, this technology that can show the SEC that well. You know, Jason Fishman is sitting at home watching ABC News, right? And he sees something and he can instantly get the offering from there. If we can demonstrate that. Hey, listen, I’d be all for it. I’m sure we all would. So welcome that discussion. Alright, Francoise, you have another question for us.


Francoise 1:00:01

Yeah, maybe stating the obvious here, it’d be great to have your respective contact information at the end of this seminar.


Oscar Jofre  1:00:12

Sorry, can you say that again?


Francoise 1:00:15

I would like to have the contact information of the speakers to this level of webinar at the end of the call. Oh, yes,


Oscar Jofre  1:00:23

of course, of course, the good, you’ll be getting an email all of you that you can reach your tongue actually, if you guys all want right now you can go to click on speakers, his bio is there, his email address? Is there, his LinkedIn link is there. And it is there for Jason saw fishermen as well. So listen, they were trying to bring this to make it easy for you not to you. It’s easy. It’s all of it isn’t public information. So we your journey as an entrepreneur can get there quicker. So alright, are there any other questions we’re getting? I think we’ve answered it. Look at that we actually came on time. We answered all the questions. Obviously, were where I’m going to leave it off. Obviously, I think if I’m understanding this correctly, I mean, what’s happened in the other webinars, a new topic has emerged. What I think is, is here is advertising. We we touched on it a little bit, but I think we need to expand that conversation. Because I think is our friend Roland brought up there is technologies that we may weren’t weren’t aware of that could help this. And if we could be the first ones to bring it to the SEC. Hey, this is I don’t know about you, Jason. Will Do you think that’ll help or enhance your offering? When you tie that in together with with digital ads, you’re doing


Jason Fishman  1:01:55

100%? And to Trump’s question, you’re looking at roelens points. We always start with it that competitor marketing audit that I was mentioning before looking at the format for how other Reg A plus campaigns have done it in the past or similar types of offerings. Taking that to a compliance conversation as the Taan is mentioning there. It’s always good to be able to look how others did it before and taking their findings into it. You know, clubhouse was brought up look how those rooms are being hosted. Look how conversations are taking place in the equity crowdfunding rooms about it on a day-to-day basis. Look at how you could send invites to investors or strategic partners and get them involved. Have all the groups involved in your offering. And Oscar it’s one of the things I love about KoreConX and what you guys bring to the industry is this community. You mentioned 22 people on a call,use these resources at your hands. We all want you to be more successful. If an issuer gets in contact with me, whether they’re working with us or not. I’m going to give my insights I’m going to give my recommendations I want to see more success industry wide. And the community goes beyond just advertising on the marketing side. There’s Eric fish Gron, fishtank, PR, there’s all these other areas of the table. Oscar even says at one point in a Reg A plus campaign you’re gonna want to talk to if not use all of these different resources at hand, we want to see more 50 millions like with Utahns doing and coming up right around the corner. 75.


Oscar Jofre  1:03:19

No, agreed, agreed it it is truly the most wonderful team sport you will ever have. And it starts here all of us working together. And more importantly, seamlessly together because it’s all integrated. Etan works with the Jason’s and the Oscars and the Sara homes, we all work together. So you’re going to find that this ecosystem, it’s I remember when I first got started, it’s fairly small. There’s about 192. Now, players in it. So there’s a lot of different choices. But at the end of the day, all of you will be working with in particular in the investor acquisition. I don’t know one yet that you’ll just be working with one. There’s so many great specialists. And I think there’s so many new great specialists coming. So listen, it done. Jason, thank you for a great conversation. Our audience obviously enjoyed it. They ended up coming up with more great questions in which a new webinar will be created just for that on advertising. Want to thank everyone for coming out today this morning. We obviously have another webinar this afternoon. How do I know if my company can use reg cf This is going to be another again a we talked about Reg A. Reg CF is another great exemption. We’ll see 330 Thank you so much for being here today. Have a wonderful week, everyone.


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