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Investor Outreach MedTech


Oscar Jofre 01:34

Perfect. Douglas, Nick. Thank you. It was very informative. I think we dug into getting people to preparation Shari, as always, thank you so much. And by the way, we did get a picture of you sneaking in like this. So yeah, exactly like that. So great to have you all looking forward to seeing you again very soon as always. And now ladies and gentlemen, we are getting ready for our next group that is coming on board. You know, the we had the lawyers speak, we had everyone bring us an update on what’s happening in the market, and one of the things of preparing is making sure that you also have the the right team to make sure the awareness of your offering is done properly. I mean, I speak to one particular gentleman. I’m not gonna say more than my wife, because don’t tell anyone. But we do speak frequently, because the market is evolving, it’s changing. And it’s pretty darn exciting to see all these wonderful things. So we are waiting for one of our colleagues here right now to join us. And I do apologize if we didn’t get to all of your questions for the other panel, you can send us an email, we will be more than happy to answer those questions for you. If you want to know how to reach any of the speakers, we made it very simple you don’t we don’t make it hard. We’re very transparent. Just go to www. koresummit.io. And you can get the information you need in order to you can contact any of the speakers, you will see their bio, you’ll see the link to their LinkedIn. And you’ll also see their email address so you can begin to discussions with them to speak. So right now we’re just waiting for one of our colleagues right now that he has disappeared. Did anybody know where Mr. Pantel disappeared to? You guys scared him off, didn’t you? Andrew? Did you did you scare someone again? No, you didn’t do it this time. Okay. So all right. So I’m going to keep an eye that he comes in here right away. And but in the meantime, what we are going to do is we are. Oh, someone there might have some answers for us, I don’t know. So this particular panel that we are going to have this afternoon is the second phase of the process. So recapping for everyone, we talked about what is different in this new vertical that starts with Stephen and Scott Pantel in the beginning then we get into the preparation phase with the right the resources legal team, the reality markets and the from the broker dealer, the transfer agent at KoreConX and then the technology that we provide. Now these are the guys behind the scenes. These are the guys that make things happen that a lot of us didn’t even know they were doing it. That’s right they’re the shadows but it’s an important thing that they do. It’s so important that you know about a year Now Virgos Andrew and I, we were having a discussion, people used to call it marketing. I go Andrew, and he agreed, I think he had it. He already had the term coined, but nobody was using it. But it’s not just marketing. It’s investor acquisition. It’s not just investor outreach. It’s not investor relation. It’s a new art in specific for this new digital frontier of the JOBS Act. And today, we’re very fortunate to have the experts here in order to make sure that we can help you in that journey. So I’m gonna let the two of you begin that discussion, while I look for your other colleagues who might have disappeared in the cloud, because I’m pretty sure he’s out there. But in the meantime, Andrew, Scott, why don’t the two of you begin introducing yourselves and the first and in the meantime, I’ll keep looking. All right.

Scott Allen  05:52

Yeah, actually, Scott Pantel’s got kicked and he’s his link to get back in isn’t working.

Oscar Jofre  06:01

Don’t you just love technology? 

Scott Pantel  06:05

I truly do. I truly do. So that’s a good lesson for people like that to learn. Don’t leave because the door locks. Welcome to Zoom’s new security. Oh, there we go. This amazing new security layer. They didn’t tell any of us about it. But that’s okay. We learned the hard way. So the drumroll comes on and gentlemen, please take everyone through the journey, have fun. Look forward to talking to you guys all soon. Thank you, Oscar. And I’m sorry for the technical difficulty. Who wouldn’t be the same without something like that this morning? I hope you guys can. Can you guys hear me? Okay, Scott and Andrew. Okay. Well, the meeting has been tremendous thus far. And now we’re at what I what I think is one of the most exciting pieces of this and clearly investor acquisition is a major factor if not the key factor in success in a RegA plus. And I’m pleased to have two of my colleagues here today that have a tremendous amount of amount of experience in the space. I thought I would ask Scott Allen to give us a brief intro. And then we’ll ask Andrew to do the same. And I have my first question with for Andrew. So Scott, you first and then we’ll send it over to Andrew.

Scott Allen  07:25

Sure. I have a I’m the CEO of InvestAcq. And we are investor acquisition firm. We specifically specialize in RegA plus, and specifically in the industries we’re talking about today, med tech, biotech and pharma. I’ve got a 25 plus year background in digital marketing, and about a 17 year background in securities, actually, Stephen Brock who was on earlier and I have known each other and work together on and off for 17 years. So we’ve got a great rapport and some history there.

Scott Pantel  08:00

Thank you, Scott. Andrew. Great. So I’m Andrew corn. This is my 75th webinar with KoreConX. So thank you, Oscar. I am the founder and CEO of E5A, we are a systematic data driven investor acquisition from. in my past, I’ve written hundreds of IPO roadshows, built an agency, a software firm, and then switched careers and spent 11 years as an equity portfolio manager multifactor model, designed exchange traded funds managed north of $2 billion. So have owned a lot of public companies on behalf of my clients and invested very early as well. I’m an active angel, primarily in FinTech in New York City, where I live in work. My team is all over the world. We do what we call time zone arbitrage. So we get things done where it makes best sense and have worked extensively in this particular area as well.  That’s great. All right. Again, it’s great to be with the two of you today. So Andrew, let’s start with you. Investor acquisition, what is it? Is it art? Is it science is a both kind of frame up for us what what what this investor acquisition is all about? Sure. So you know, when I came up with the term, it’s because so my firm works not only within RegA plus, but we also work extensively in financial products and working for investment banks, brokerages, trading firms and around the ecosystem. But the bulk of our work is how do you acquire an investor? Are they an institution? Are they a family office? Are they a investment advisor? Are they an individual? So essentially, what you’re doing is acquiring them both share mind and share wallet. Of course, it’s measured by how much money they put in. But it’s also share of mind, as I’m sure Scott will attest, a lot of people invest 2,3, 4 times in the same RegA offering, even within the confines of the same 12 months. And is it science or art? And the answer to that is yes. There’s a lot of nuance to what gets done. And there is a tremendous amount of mathematics that go into it. Assuming you’re doing it at a high level. And there’s absolutely art as well. Certainly, there’s art and storytelling, but there’s science and storytelling. There’s very little art in the numbers. But there’s an awful lot of art in putting together a media plan. So I would say it crosses both. That’s great. And Scott, would you like to add anything to that? You know, we talked a lot about the pillars of investor acquisition. And maybe you can touch add to anything that Andrew commented on. And just give us your view and philosophy on at a high level and things.

Scott Allen  11:19

Yeah, I mean, not happen the whole session. But right now, I agree with everything Andrew said, it is absolutely a mix of art and science. Really, both the data and the storytelling are really at the core of that we talk about in RegA plus, we really talk about three pillars, the first being the brand, the brand marketing and establishing a strong brand. We think that that’s at the core of it, because that is how you tell the story of the impact that attracts those potential impact investors. We also know from the data that a strong brand drives higher return on adspend, or ROAS. And so that’s got to be there actually, that can take place even before the offering goes live is getting that brand foundation clarified and built and start getting that story out there. A lot of these companies in this space, have absolutely no presence. We’ve had clients that have had no website or a one page website that was thrown up by one of the scientists who most of their work is in the lab. The the other two pillars. And I think a really important point is that this is something Oscar alluded to or in one of the earlier sessions is that this is not an or this is not venture capital, private equity, or the general public it is and, it’s inclusive. And so with our outreach programs, we have two tracks, one going after the accredited investors and the other going after general public. And while certainly there’s some crossover, fundamentally, those core strategies are different going out to the public, you’re looking at running digital ad campaigns, you’re looking at the PR, you’re looking at those sorts of things. Whereas for the accredited investors, you’re going to the financial newsletters, you’re going to the databases we have of those accredited investors, the CPAs RIA’s family offices that have access to those accredited investors. So there’s really those two tracks that have to happen as part of the investor acquisition process.

Scott Pantel  11:22

Right. So I heard a stat earlier that there were 8 million or so accredited investors in the US and then hundreds of millions of unaccredited. Investors. Andrew, over to you. Where do you find the investors? How do you know if you’re getting it right? Talk to us a little bit about that. Sure. So every offering is different. Let’s start with that. You know, we as a firm, build a lot of our own internal data. And, you know, we look mostly for angel investors. So who in what is an angel investor, the angel investor is someone who’s accredited, and it’s invested in the private deal. Just because you’re accredited doesn’t make you an angel. You have to put your money where your passion is or where your thoughts are, or where your arm was twisted. My first angel investment my arm was twisted. So it was an a brewery. I did very little due diligence. I got lots of great beers, but I lost all of my money. It is actually the only angel investment I’ve ever lost all my money on. So you know, we build quite a bit of data on that. But just because you’re an angel and you’re accredited doesn’t mean you’re going to invest in that deal. The deal that we have For the offering that we have. So the second thing we look for is affinity. And do you have some kind of connection to it. So someone approached us recently with an orphan drug that they are looking to get to human trials on after very successful animal trials. And I said, that’s great, I wish you great success. But I can’t help you. Because the audience for it is too small. If you take everyone who has the disease, cares for the disease, loves and knows someone with the disease, it’s not enough people to fulfill the offering. So very quickly, we do back of the napkin math to make sure do we have enough people with the affinity? And then do they have the financial ability to make the investment? And I’m going to turn this over to Scott, because I know I’m speaking a long time here. But you know, what’s the minimum investment that’s going to determine a lot about who we go after and why as well. Oscar and his team are putting together some stats of median investment on a credit card, median investment with ACH, median investment through wire, or cheque. And all this is tied into what the investment is, but also what that minimum is. So there’s an awful lot of things going on to figure that out. We tend to ask our clients, who’s your ideal investor, because we want to acquire some of those. And then Who’s your most likely investor? Because that’s what we can scale. Got anything to add?

Scott Allen  16:46

Yeah, first of all, I want to say what you were talking about Andrew, this is one of the great reasons for us to be partner with KoreConX. Because with them having this such a huge share of this market for RegA plus raises, they have unprecedented amounts of data, frankly, they have more data about what really goes on in the A+ raise than I think that the SEC does, because all the all the data SEC has is public and KoreConX is pulling that stuff in as well. So I know we’re all going to be excited to see that and then improve the process for all of us. As far as attracting investors, finding identifying those investors. The one of the things that I love about this space from a from sort of the marketing standpoint is these people are actually pretty easy to identify they’re generally fall into a couple of groups when Andrew, what you were alluding to is that people who have an affinity, there are a couple of ways that we identify those within this space. First of all, is the clinicians that are dealing with whatever the symptom or problem that we’re talking about. Now they are already in professional associations, they already have publications, we can go right to all of the cardiologists, there’s there’s an association for that we can row right to all the ophthalmologists, all the sports doctors, those are easy to identify. And then even on the broader side, for the general public, there are all the nonprofit associations that support those causes. And again, those are very easy to identify or even partner with to go to people who support the American Heart Association or the Susan G. Komen Foundation, the American Diabetes Association or who are in the groups on Facebook, where these topics are discussed, or the the people who talk about these things on Twitter, use the hashtags about these topics. And so it’s much much easier to identify supporters and particularly the physicians in the space who are likely to be accredited investors than it is in a lot of other than it would be first set for a lot of consumer products.

Scott Pantel  19:15

Right And while we’re while we’re on that, I’m going to ask you a follow up question, Scott. And then we’ll ask Andrew to weigh in on it. Because we are the subject of this. This This session is on health care. Talk to us a little bit more about challenges and other opportunities working in the healthcare space in general. I’d like you to weigh in on that and then get get Andrews perspective.

Scott Allen  19:40

There are a couple of challenges I really see in this space. And the first of all, of course, is has been alluded to earlier is these companies need a lot of money. It is an average cost of over $100 million to get a product to market, certainly in the pharma space and to some extent in the med tech space, by the time you go through all the r&d studies, clinical trials, FDA approval and go to market. So the idea of being able to actually raise $75 million in a year, and Oscar said that that may even go up to 100 million. That those raises are different. And, and I know Andrews got some thoughts on that. As to it’s what’s different about raising $75 million, versus I think the median, or the median raise on a plus to date has been somewhere in the order of 22 million, 23 million, something like that. And a lot of those were in real estate. So that creates a challenge of how to do those larger raises. The other big thing, I think, in terms of a challenge is the legal complexity of it, is the fact that not only are you dealing with securities law and sec attorneys, we have the FDA attorneys and all the language that’s involved with that, you always have IP in this space, which you may not have, in the case of some consumer products. You have HIPAA, if you are any kind of med tech device, that’s also keeping, that’s also keeping patient data. And that’s one of the things that that’s, that’s why it’s so important to get this foundation for all of this. And that, you know, the team that we all work with, really makes sure that all of these pieces are in place, before they even start to go and file for the raise. Because they have to be there, you won’t get the investors, you won’t make it through the raise. In terms of opportunities. This is the other thing besides the ability to identify the people with an affinity is, as we’ve talked about before, and you’re going to hear it over and over again, as these are big impact products. These are things that save lives and improve quality of life. We have companies that are, you know, that are dealing with concussions and traumatic brain injury, with loss of limbs, diabetic amputations, spine spinal implants, it is it’s just, it’s all over the place. And, and I get excited when we talk to people about these things. And when we hear what they’re doing, and how excited they are about what they’re doing. That’s one of the things is that these CEOs, these founders, they may or may not be business people, but boy, they know their stuff. They know their stuff, and they are excited about it. And they believe in what they’re doing. And so that lays a great foundation for a great story.

Scott Pantel  22:41

Andrew, you want to add to that?

Andrew Corn  22:44

Yeah, there’s a couple of things I took some notes on. So you know, Scott is accurate that we work on larger RegA pluses, we don’t work on reg CF. We’ve dabbled in CF and found it to be not really in our wheelhouse. That said, We’re about to take on a CF, but it’s really specialized and ends up being about an $80 million raise. So we do work sometimes when we’re combining reg D with a plus or reg D in this case with a reg CF. So, you know, looking at healthcare as an impact investment, I think is idealized. And I agree with Scott, I get sucked in by some of these stories where it’s like, oh, we need to be in on this. But then we’ll back off when the data doesn’t work. Or, as Scott said, they may not be great business people, but they really know their stuff when it comes to the science. So to do a successful raise, especially larger one, there needs to be a well rounded management team. Who’s your CFO? If they’re not on board yet? Are they identified? Are they willing to put their name and photo on the offering page? So I put my portfolio managers hat on, I look at every company from an investment perspective and say, if this was a public company, would I put my money and as a private company, will I be the first investor? assuming we’re using the Kore software? I’m usually the first investor just to make sure it’s working live. So sorry about my dog barking. Not much I can do about that.

Scott Pantel  24:36

I was actually going to ask you, Andrew because I was doing my homework and I looked at your LinkedIn account and I was wondering if the fella on your lap is an analyst of yours or maybe that’s the guy you’re barking there in the background. Yeah. The person or the dog barking in the background is neither an analyst but he is definitely a she’s a comfort dog for sure. I just I hear my wife coming home at this moment. So when I am working from home during the pandemic, okay. So I want to stick with you, Andrew and then we’ll kind of go back and forth here. I’d like to keep this fluid. And so you’ve done many deals, Andrew and the overall volume and industry is ramping up I’d like to get I think it’d be useful to share with audience just a general, you know, how many deals Have you guys seen? what’s what’s volume in the industry look like? And then I want to get into how you’re sourcing the data a little bit more detail around that.

Andrew Corn  25:37

Sure. So those are two very different questions, I’m going to take them one at a time. The first is, is that, you know, I have built and sold an agency a bit built and sold a software firm, I’ve worked at a couple of public companies as Chief Marketing Officer. And I also built and sold an asset management firm. So this iteration of my career, we are basically limited to the number of deals where I can be effective. I’ve got a very deep team of people, every single one of them are smarter than I am. Many have not been on the planet quite as long. But they are super smart and great at what they do writing, design, data science, media, buying, media optimization, project management, etc. So we are very, very picky about what we work on. As the broker dealers and lawyers and KoreConX will tell you, we probably declined to write a proposal six out of seven times when we made a perspective. So a couple things happen with that. One is that we really like impact investing. So we’re working on a bunch of things that help the planet, help humans, help the environment, help clean air, etc. So with that said, there’s some things we do that aren’t quite as ESG, or impact investing, as they may appear to the average individual. When it comes to med tech and healthcare, we only will work on things that are treating a root cause something that’s treating a symptom is not something that we have any interest in. And I think that’s something that becomes Big Pharma. And this is only my opinion, is that is one of the big problems with Big Pharma. Now, if someone’s in pain, they need pain relief. But when it comes to funding a small new emergent company, treating the root cause is something we’re super interested in. So we used to source data by looking at Twitter, and things like that, as well. But we found a lot of the people are not quite as qualified as they initially appeared, they may have a great affinity, we can look at hashtags, we can actually look at followers and take followers because all their email addresses, or at least who they are is exposed, we can reverse that. Especially if we know location into an email address, we can then take those email addresses and make custom audiences. We tend to go other routes now we definitely start with the doctors then, you know everyone who was helping in that specific area, also scientists, we’ve met founders with PhDs but not MDS. So we’re really looking at where are they? And are they in academia, as well? And are they at an academic institution where there’s a propensity to get in early and or to be more entrepreneurial, excuse me. So all those things are factors in what we’re looking at. The problem with that data set is that it may be good, it may be robust, but it’s too small to handle a large raise. It’s better for reg D than a RegA only because of its size and volume, not because of its quality. So I’m in complete agreement with Scott on the quality, and it’s a place to start, but it’s not necessarily way to scale the data.

Scott Pantel  29:29

Scott, anything you’d like to add to that?

Scott Allen  29:31

Right? Well, of course, one of the things one of the key things is that that I know Andrew and I both to is that that you start when you start your fundraising, when you start your advertising and outreach is you track all those results from that and we can go in with a lot of good ideas of starting points based on these affinity groups and the clinicians and and associations and and science. Just in the space, but the fact of the matter is, is those first couple of months, first two, three months, you’re going to be see testing and seeing which of those groups are responsive, which messages to those groups are responsive, the exact same kind of things we do with digital advertising, they’re ready, if we’re running ad campaigns in Facebook, and LinkedIn, and some of these professional publications, those, the first two to three months of the raise are figuring all of that out. And it could be different every time. That’s the key. And that’s why there’s, there’s big variables in the media spend budget as well, because because we never know we can do, we can do 100 of these, we’re gonna do 1000 of these, and every one of them is going to be different. That’s why like, when we in the, in our Capital Planning valuation strategy that we do for these clients, and we plan out a budget for the whole thing, you’ll see that the incoming investments are back loaded, it’s slow at the start, where it’s back loaded, you may see, if you run the race for 12 months, you’re gonna see your largest investments and the 11th or 12th month, just sort of some VC coming in and dropping a million or $2 in it. But just in terms of the number of investors, you’re going to see it coming in at the end, because we’ve been figuring out how to optimize off the data we’re actually seeing off of off of your data and not off of some hypothetical thing or best practices in a space where we simply don’t have enough data points to to your your data is going to always be our best data.

Scott Pantel  31:40

And I’m gonna just throw this out there, we have about 30 minutes left, but I’m sure Oscar, there’s going to be some really interesting questions from this group. So any, from anybody from the audience can start thinking about their questions, we’re going to tee those up in about 15 or 20 minutes. Andrew? How do we know how do you know if you’re right?

Andrew Corn  32:01

So it’s funny because I wanted to jump on a couple of things that Scott said that I completely agree with. And it leads totally into how to you know, you’re right. So a basic premise of digital advertising is that you draw all the right people to your offering page, you build up a statistically significant number of them. And then you can say to the algorithms, get me people with the same demographics and the same behavior. And let’s advertise to them. And let’s narrow where they can see it so that there’s, or at least the way we do it. There’s some conceptual and topic oriented, things that make it so that that ads in the right place. You know, we don’t necessarily want an ad for medical device on the weather channel. Not that there’s anything wrong with the weather channel. But I might even contradict that and say, if they’ve already been to the page and we’re retargeting them, it may be perfectly acceptable. So there are so many exceptions to every rule. So when building that initial data pool, you need to know that you’re getting investors, or you’re going to ask to scale your advertising based on crop data. They may have self selected coming to the offering page. But if they didn’t click the invest button, you didn’t get very far. And if they click the invest button to they make it to page two or three of the Oscar sign up, did they actually sign their docs and fund? So how do you know you’re doing? Well in the beginning? Well, first, the first week, everything’s a disaster. And if it’s not, you’re not doing it well. Because when if everything goes right, you’re more lucky than smart. And in the beginning, now it’s different in certain things like real estate, where you can be an awful lot more precise on what you’re doing. But with something like medical, you’re going to be wrong in the beginning you might be wrong on your data. How do you know that you might be wrong on your messaging, it might be the right people coming but when they get there, you’re not telling the story properly. And you know, you get so close to this with your client. You know, new almost could do the CEO video yourself. And then third is it’s not just messaging and data, but it’s media. You know, we are doing we also market exchange traded funds and other investment products. And we’ve got an I’m going to personalize this away from a plus into ETFs. Some ETFs sell way better on Facebook and others sell way better on the web. So Oh on the web, and what channel is it in the health channel? Is that where you want to be? Are you going to do better in the business channel? So, you know, we, as part of our presentation love to say, we always post ads on the Washington Post, we also always post ads on the Washington Times, because we don’t care what side of the aisle anyone’s on, we just want to find that. And then we want to optimize to what is working, and turn up what’s working and turn down what’s not. And then just quickly, because you know, Scott has his pillars, which we have something similar, which is test, measure, refine, and optimize. And with those things comes an awful lot of nuance, because you are optimizing media data and messaging. And messaging is multi level also, because of they never heard of you. Have they already come to the offering page? Are you bringing them back? Did they watch the video? Oh, there were three videos to watch. How many did they watch? Is there something to download? Did they leave you an email address? Have they seen the news? So much of these things? are what motivates someone to click the invest button and complete their investment? So So anyway, the answer to your question is that you’re seeing people in the continuum, and that that is predictable, because you’ve done enough of these to understand where they are in the continuum. And if that is worth optimizing, it’s not necessarily money in the door really quickly, as Scott said, it’s the opposite of like Indiegogo, these are a marathon, not a sprint. And the end of month one, what you want is a lot a lot. You know the in digital marketing, they say fail fast, and RegA plus fail faster.

Scott Allen  36:51

On this, I’d like to just add one quick thing on there. Another point is, this is a great reason to run the raise on your own site and not a platform. couple of reasons is, first of all, by running it on your own site, we have all the data we have, we have everything throughout the process with KoreConX and seeing that everything every step along the way of people signing up and accessing the accessing the documents. We also you don’t have to show how much you’ve raised so far, it’s probably a good idea once you’ve actually got some traction in it, because it helps with the social proof. But if you’re on most of these platforms, they’re showing how much you’ve raised from the moment you flip the switch, and people don’t want to raise and put money into something that who wants to be the next person who puts it in when it’s only raised $580.

Scott Pantel  37:48

Right? Yeah, so I have to tag on that. So we want to erase on a platform, no interest, because there’s no data, the platforms are, to me antithetical of trying to help their clients. They give us zero data, zero information allow us zero tagging, there’s absolutely no interest in working on a platform. That said, if you’re raising $75 million, and we have three of those currently in house, co listing on a platform is fine to see if they can’t help you milk their captive audience, assuming they do have a captive audience, which I don’t actually believe they do. even start engine that claims 500,000 registrants. You know, I don’t think they’re actively investing in deals. So and then the second is, no one wants to be the first investor. As I can tell you as I’ve raised Angel money, I’ve raised VC money for my own firms. No one wants to be first. We recommend having some investors at the ready the day you start. And your first update or news update should be that the first X amount of dollars and said, and it’s really interesting, that dollar amount. It’s like, Oh, we’ve already raised $700,000. Well, that’s great if you’re doing a million dollar CF, or even a $2 million, see if it’s petty cash if you’re raising $75 million. So what numbers going to make people comfortable? Okay, and you guys have kind of already touched on this, but I’ll just if you if anybody wants to add anything else, we’ve had this come up a few times. And it’s it’s the CEO and he’s, you know, he’s a little concerned that he’s not going to be on that platform that has all of those investors all queued up, and we have to spend some time kind of walking is there anything else you there? How would you address that if you’ve sort of already done it, but for the the CEO that’s worried that he’s not gonna be on the platform with all the investors sitting there queued up is not a false false sense of security anyways. Anybody want to jump in take that Andrew?

Andrew Corn  39:54

Yeah, it’s a total false sense of security so that the business This model is you get 1000 issuers, each one’s gonna have 25 friends and family. There’s 25,000 people who have registered made an investment on your platform. So if you had 50, then you know, the math just continues, how many of them are ever going to invest in someone else’s deal? You know, the numbers are unclear. You know, I’m not overly impressed when they publish, how much money they’ve raised. So, you know, we’ve done we’ve been involved in a billion dollar reg D, we’ve been involved in multi billion dollar reg DS that were purely institutional. So, you know, whenever I hear these numbers, it’s like, that’s great. But you know, when you’re used to working in capital markets, they’re just not that very big number. That said, I did say, we encourage co listing so that we can tap into what is there, that money is usually far more expensive than doing it on your website, does not promote your brand is something Scott said earlier? And I believe less likely to attract any kind of institutional mind. Okay,

Scott Pantel  41:16

Scott, do you want to add anything to that? And then I want to shift gears a little bit with something for you.

Scott Allen  41:21

Yeah, I think the thing is, is that we’ve got access to those same kind of numbers through other channels, we have a database of 250,000 accredited investors, we use AI to pick out the 1000 or so that are the best fit for your investment, send them very targeted emails, we have a list of 65,000 CPAs, 30,000, ri A’s and 10,000 family offices. And that’s a multiplier. That’s just those are the people who have access to those investors. So if each one of them has access to, you know, 1020 3050, high net worth individuals, that’s, you know, that’s a huge number. So don’t be fooled by the numbers that a platform says they have 500,000 investors on it, we can get it at that same kind of reach. And that’s before we even talk about digital advertising where I mean, what’s, what’s the reach of? What’s the reach of Facebook? Right, LinkedIn.

Scott Pantel  42:17

And I guess on some level, you know, if everybody’s special, the nobody’s special. So yeah, I mean, okay. So shifting gears back to something we’ve talked about, I really liked that example, Scott, that used to with about, you know, your potential investors, using like spine as an example, if you have an innovative spine technology, the surgeons that may be, ultimately end up becoming your customers for that technology can be can now be your investors and your ambassadors, and then come full circle and and become your customer. So let’s talk a little bit about investors slash ambassadors slash future customers that overhyped or Is this real? Like, let’s talk a

Scott Allen  43:00

little bit about that. I think this is one of the whole reasons that that the right companies want to even consider a plus versus, versus doing a reg D do does your company benefit from having 6000 investors versus six, right. And so I think that’s, that’s central to it. And the other thing that you’re also looking at is, over the course of an A plus raise, if you’re doing if you’re doing a $30 million raise, or up to a $75 million raise, you could have anywhere from 3 million to six or $7 million marketing budget, that’s going to be applied over a 12 to 16. Well, let’s call it a 16 month period, when you start in the prep phase. And it’s all a big chunk of it is focused on telling that brand story. So what’s the impact that that had has for you for who your future customers are those clinicians, those clinics, the hospitals, the people that may be purchasing your, your medical device, what’s the impact for you for the visibility it creates for you for for m&a, we’ve seen things we’ve seen items where where the company started there a plus deal and was and had a merger opportunity within the first couple of months of being out there that was triggered by that visibility. That doesn’t happen with a reg D. So that’s a big part of it. While theoretically the the cost of capital may seem higher, because of the amount of money you’re spending on the investor Acquisition Program. The ripple effects of that span are tremendous for your business.

Scott Pantel  44:42

Andrew you know, as usual, I have a nuanced view of what Scott said. But also keep in mind he said it in under a minute. So we’ve never heard of a family office or a venture capital firm putting money into a room RegA plus. And what we have seen, though, and what we have been an all call it a combination of being at the right place at the right time and a little bit of luck, is we’ve had several family offices, we’ve had even larger institutions than that come approach an issuer, because they saw our advertising and they saw our way of telling the story and said, Gee, we want to invest. But guess what, we’re gonna write a check for two and a half million dollars, we’re not doing it at the same terms as the RegA where you’ve got a $200 minimum. And I think that that’s completely fair. And we usually counsel the companies on how to structure that type of deal. And we’ve seen an awful lot of money come in on that the other beauty of doing it, because you can just do it as a quick private placement or get five or six c reg D paperwork done. And bam, it doesn’t affect the total amount you’re raising on the RegA plus. So that can work out really well. You know, we have a very different view on the whole brand story aspect of it. And I run into this in the ETF and mutual fund and other financial product world as well. You know, companies will have a brand agency, they’ll be referred to us, because sales are not there. And I then say the first thing I say is, if someone is investing money into your product, odds are they have a very good impression of your brand. So we let brand and grand story be highly secondary. We are basically sharks we eat, we swim, we make little sharks. In this case, the little sharks are the investors. And that’s all we do is investor acquisition. So yes, we have people who are former brand strategists or writers all high brand in mind. But everything we do is about acquisition. And frankly, we’re looking at what do they need to know to make that investment, not they need to know everything and have experienced all of it. So there are some products and services that if you experience some experienced them are more likely to invest in med tech, that may not be possible. Although we do have a client where there’s a side by side, reg D, and the reg D is only going after the type of clinical people who could become clients as well. And they have very different perks, which are all about getting them on board with the specific product, it’s a medical device in this case. So you know, complete agreement on that side. So on the flip side, we also will bring in a PR firm to make sure that there’s some of that air cover credibility that you could say goes directly to brand and that there are articles being written that there by lines and that there’s a social media presence. And we might bring in a second company on the social media in addition to the PR

Scott Allen  48:19

Yeah, the visibility and social proof is is essential for especially especially for these early stage companies that are preclinical pre revenue and they’ve probably spent no more on marketing than then their their website

Scott Pantel  48:38

said toss out the nuance here preclinical pre revenue, Scott and I don’t work necessarily for the same types of clients. And so when you hear something from me if it’s contradictory to something that Scott says everyone should know, I know Scott, respect Scott’s cuts a really smart guy. We see the world slightly differently and everyone you see the world slightly differently from but we’re also talking about different types of clients. where, you know, one of the first things I do when I get the referral is look at what’s your social media presence? And if it’s next to none, or you know, they’ve got a Twitter But no, Facebook, that’s going to tell me something about well, and it goes back to Scott’s comment on Hey, do you want 35,000 investors? Do you want 10,000 investors? Or do you want six investors and that says so much about if the CEO doesn’t have an instant response to that, that’s a walk away for us as well. It’s like, they’ve not thought through that they actually want a crowd. You know, or a community or a mob anyway, so you want to know what they’re getting themselves into and that needs to be something they embrace. I want to follow up on that. That’s, that’s great. And I’m glad that you pointed out the different areas of emphasis have an impact on on the situation. So one of the observations I’ve had over the last 20 plus years watching CEOs out there raising capital and trying to run a company at the same time as they spend a heck of a lot of time doing the first part, which is the raising the capital part, and the company often can suffer. So if I’m a CEO, listen to this call. And I hear things like 30,000 investors, I can start to get overwhelmed or maybe a little worried about how much is how involved Am I going to need to be? Again, these are these are CEOs that are there already there, their time is limited. What’s your experience? One of you guys jump in with? How involved does the CEO need to be at the process? And how might that compare to raising traditional VC and I know every situation is different. But how involved are they should they be worried about having 30,000 investors jump in one of you.

Scott Allen  51:05

I’ll take that the the data is so that in traditional funding, in CEOs typically have to do more than 101 on one meetings to for a fundraising round. And that’s in counting 1000s of emails, and 1000s of hours, you know, hundreds of hours of due diligence. Basically, they typically have to focus entirely on that for six to 12 months. And what’s the impact on the company of the CEO being almost entirely tied up with fundraising for six to 12 months, I’m not going to kid anybody and say that, the CEO is not going to have to put time in on a RegA plus raise, that would be ridiculous, they are still going to have to talk to some of the larger investors that may come in, they are going to have to commit time. You know, everything that we send out, and everything that Andrew and I send out, we may be be able to write everything, edit everything, to handle the legal review with the attorneys, etc. But everything that goes out from an investor acquisition company, it doesn’t go out in our name, it goes out in the company’s name, and it has to be signed off by a principal of the company. So there is going to be there’s going to be some involvement. But the key thing is that there’s a lot of leverage, they produce one video and it gets posted and promoted over and over and over, we help build out the FA Q’s so that some of the some of the common questions that come up from investors from from the smaller investors can just be an FAQ page on our website, an investor FAQ that’s available to them, that a an admin person can handle as an admin function. If it’s on the FAQ, they send them the answer to the FAQ, everybody doesn’t have to talk to the CEO. So there’s a lot of things that we can do in the process of a digital raise that greatly reduce the burden on the CEO and, and other other parts of the leadership team, I think the the, the key thing is, while they may be investing a lot less of their time, they’ve got to have the responsiveness. If you’ve got to CEOs, ie they can’t take an attitude of, well, they’re handling the raise, I’ll get back to them in a couple of days. That will slow everything down. So they need to be committed to the responsiveness. They don’t need to be committed to 100% of their time spent on the raise itself.

Scott Pantel  53:40

Andrew, anything you’d like to add to that? Yeah,

Andrew Corn  53:44

I mean, aren’t our entire process is built around minimizing the interaction, so the CEO and the management team. That said, there’s still a lot for them to do because as Scott said, we need to put their stamp on it. Everything has to be client approved and compliance approved and then technically assessed as well. And then go into our tracking process before it can go live. And if you want to break the process, then we’re definitely not the firm to work with. You’re basically buying a process when hiring a firm like ours and I just saw Scott shake his head, you know, in agreement with that. But we have a whole onboarding system that we take most of the day with the CEO in the team, and then we disappear and we set up a weekly meeting. Usually back to back with the PR team and we listen in to theirs we encourage them to listen in two hours. We have a dashboard which is updated daily. I mentioned timezone arbitrage all that is done offshore in a time zone six hours earlier than our so it’s ready for me and my 8am and I can view it and ask questions and harass and rattle Mike the cage of my team in advance. So you know everything again is it’s great to do it on that scheduled time. But occasionally they’re going to get an email or phone call or even worse a text from there. And you know, they have to do that. And then back to Scott’s point. We love webinars, because questions come out that we can then address, we just have a different way of doing it. So it is really important as part of the feedback loop is to questions. But sometimes we want a little bit of question as well to remain so that there is some interaction that just doesn’t necessarily have to be with the CEO.

Scott Pantel  55:49

Great. And speaking of questions, I see we have six minutes left here. I have a final question. But after Do we have any questions from the audience queued up that we can, we can do a little quick rally session here. Yes, Stephens got a question. So Stephen, all you need to do is unmute yourself, and you can ask your question. Okay, he, Shawn. All right. We got another one out there. Hold on. I’ll get them. Francisco, you have a question?

Attendee 1  56:28

Hi everybody. This is a question for both. Well, particularly one for Andrew. And then the next follow up question is for for both of Andrew and both Scott’s either one can can answer. Andrew, when you said impact investing, do you consider an impact investing and a medtech merging as one single best thing? I’d say, for example, a dude. I’m trying to give an example, let’s say, a ventilator due to pandemic, it’s a med tech or medical advice that it calls to be an impact investment. How is your consideration in that as in tropic or as business wise? And the next follow up question. Scott? Allen, you mentioned when follow up following up with the CEOs for fundraising or or or I don’t know, investor relationships? Who do you consider? Could be the the guy who be the one who answers or takes the shots regarding that, like a CEO or somebody who is like the CEOs personal assistant? what’s what’s your What’s your thoughts on that? Or any suggestions?

Andrew Corn  57:52

So the second question first, which is it could be the CFO, it could be the head of marketing, it could be an investor relations person, because you’re going to want one sooner or later, especially if you have 30,000. Investors. It can be different people. And it depends upon their question, what the interaction is, and what size investor there is, you know, the whole democratization of all this is great, but it is really hard to answer every question if an individual $100 investor has 25 of them. So you have to decide and prioritize and perhaps send them to FAQs, rather than answering personally, is the ventilator, in this case, an impact investment this one touches me personally, as a friend was taken off a ventilator and died because he had a low probability of survival. And they gave it to someone with a high probability of survival, that choice wouldn’t have had to be made. If there were enough ventilators at that moment in time, it was very early in the pandemic. So do I think that ventilator would then be an impact investment? The answer is it depends. Is it a new take on it? Is it more efficient? Could it be made faster? Because you know, we had project warp speed, and we needed things done in warp speed? So if it really addressed everything that would make it true impact and impact everyone, fast? And well, then yes. If it is more of a long term solution, then maybe so sorry, I couldn’t answer that as definitively as you may have wanted.

Scott Pantel  59:34

Good answer. We have another question there from V Balu. So if you can unmute yourself and ask your question.

Attendee 2  59:42

Hi, good afternoon, Scott and Andrew and Scott. Thank you for the panel. My question is, we started up as a med tech company, and we have acquired licensing deals from other Companies that are more in safety syringe versus also in the manufacturing of nitrile gloves right now. So it’s a very hybrid model. And in that situation, what would be your advice because obviously, the traditional investors are going to look at, you know, you’re not focused in one area, however, we are able to secure a lot of debt financing, and as well as the government financing for doing this, but it’s something that we’d like to do as a span going forward. What are your thoughts around that? And how would you help us to guide some, some things that we should be careful of pitfalls or anything that comes to mind?

Scott Allen  1:00:40

Yeah, a couple of thoughts there. First of all, one of the things that that is true in RegA plus in equity crowdfunding in general is the that equity crowdfunders don’t tend to have the very narrow bias selections that venture capitalists do. They invest in more female founders and minority owned businesses and non traditional founder teams. And, and the reason I bring this up is because they’re also not going to be necessarily as bothered about the fact that you are having sort of a multitrack approach in your business. And now I’m going to say the other side of tat is that a confused mind says no. And so if there is not absolute clarity, about why you’re doing these multiple tracks, and how they complement each other, and and why it’s not an issue of focus for your company, you’ve got to be explain it like I’m five, you’ve got to be able to have a very simple explanation, justifying why you’re doing that. Or it doesn’t matter whether it’s an accredited investor, or a $580. Investor that, like I said, a confused mind says no,

Scott Pantel  1:02:03

thank you, Steven cantori, you’re there. Your question?

Attendee 3  1:02:07

I’m here. Okay. So my experience has been on launching biotech companies. And I have several of them with my name on it as like the earliest investor in the deal. And I have an opportunity, and usually we, we’ve always raised it with the reg ds 506. b. So here’s my question, I’m looking at doing a RegA for another health care company, but part of the business model would be a roll up, okay. It’s actually a healthcare software company in data analytics. And there are several like interface strategic partners. And part of you know what we’re doing. As I said, as a roll up, I heard somebody earlier, talk about something that you could do a RegA plus, and then utilize something called as you could do a series of fundings. Is that how it is, but aren’t you still limited to the 75?

Oscar Jofre  1:03:16

I’m going to make sure I don’t want to put these colleagues here in the hook cuz none of them are lawyers here. So Stephen, the question you’re asking is a legal question. Oh, and obviously, you know, this is a public forum. And none of these individuals here are qualified to answer that. If you go to the www.koresummit.io. You’ll see the contact details there for Stephe  Brock, we can put you in contact with the lawyer because there’s a whole restructuring and you know, this is not the the panel but it’s a great question. And they can answer for you specifically with you. Thank you again, so. So great panel, guys. You know, the discussion always alerts everyone as to the possibilities. We’re obviously using the word impact investing in this sector, which is quite interesting because it is something that is being brought into the market. So I’m excited. Thank you, the three of, Scott, Andrew Scott. I feel like I’m Ah, bah blah, blah. I hope to see you all again very soon. And to be able to continue this journey and discussion while I’m asking all of you to part away I’m bringing in our next panel group right now as we speak, they are going to be bringing us through that phase.

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