KoreTalkX #14 with Sara Hanks


Rafael Gonçalves

Marketing and Communications


Rafael Gonçalves

Marketing and Communications

Sara Hanks


CrowdCheck Law

Sara Hanks


Sara Hanks, CEO of CrowdCheck and Managing Partner or CrowdCheck Law, is an attorney with over 30 years of experience in the corporate and securities field. CrowdCheck and CrowdCheck Law together provide a wide range of legal, compliance and diligence services for companies and intermediaries engaged in online capital formation, with a focus on offerings made under Regulations A, CF, D and S, whether of traditional or digitized securities. Sara’s prior position was General Counsel of the bipartisan Congressional Oversight Panel, the overseer of the Troubled Asset Relief Program (TARP). Prior to that, Sara spent many years as a partner of Clifford Chance, one of the world’s largest law firms. While at Clifford Chance, she advised on capital markets transactions and corporate matters for companies throughout the world. Sara began her career with the London law firm Norton Rose. She later joined the Securities and Exchange Commission and as Chief of the Office of International Corporate Finance led the team drafting regulations that put into place a new generation of rules governing the capital-raising process. Sara received her law degree from Oxford University and is a member of the New York and DC bars and a Solicitor of the Supreme Court of England and Wales. She serves on the SEC’s Small Business Capital Formation Advisory Committee. She holds a Series 65 securities license as a registered investment advisor. Sara is an aunt, Army wife, skier, cyclist, gardener and animal lover.

Rafael Gonçalves 00:50

Hello, everybody, hello, everybody to who’s watching us on LinkedIn, on YouTube or on Facebook. My name is Rafael Gonçalves, and I’m the Communications Coordinator for KoreConX. And I’m very happy to be here today in our 14th edition of this KoreTalks. This is the first time that I’m interviewing the great, the one and only Sara Hanks. I was just telling her backstage that I love reading her texts and her articles. And I learned a lot daily. I love reading her content. And this should be a great opportunity for us to debate a little bit about what we’re doing, and to learn a little bit more and learning. It’s always good. So Sara, welcome. Thanks for accepting and tell us a little bit more about yourself. The stage is yours.


Sara Hanks 01:41

Okay, well, um, I come from a very, very traditional securities and corporate law background. Way back when and I mean, like, the previous century, I worked at the SEC for a while I was Chief of the Office of International Corporate Finance, and I was a specialist in international IPOs. And the like, spent a couple of decades as a partner in the world’s largest law firm at the time. And then, in the financial crisis. Nothing much was happening. So I went over and worked as a general counsel, to the congressional oversight body that oversaw the Troubled Asset Relief Program on Capitol Hill, and never kind of made it back to big law. I started getting interested in all of the bills that were going through Congress at the time with respect to crowdfunding and thinking, wow, this really interesting legal implication there. Started talking to some friends. After the congressional oversight panel had stood down, we were going Okay, so with these new laws, you know, this is inexperienced, small companies selling to inexperienced investors, retail investors over the Internet, what could go wrong with that? We thought there needs to be a company there that makes sure everybody is complying, you know, the trust layer, that that can say, well, this might be a good company, or it might not. But we can tell you that what it’s doing is legal. And that’s where we started. And we’ve just expanded from doing purely due diligence or compliance to doing filings to doing disclosures. Because we were securities lawyers, originally, people would ask us securities, little questions, and then they would send us chocolate, which was lovely. But then we started thinking, well, we could get paid in actual dollars fiat money instead of, you know, chocolate. So we stood up CrowdCheck Law. And now we provide a wide range of legal compliance disclosure services for all of the online crowdfunding exemptions Reg, CF, Reg A, and 506 C. And it’s keeping us pretty busy.


Rafael Gonçalves 04:06

Yeah, I just love the way you can, you could sum it up in one sentence like inexperienced these words and experienced buyer investors, what can go wrong? I mean, everything, right?


Sara Hanks 04:18

Yeah. And it pretty much is everything. I mean, as we were chatting backstage, I mean, one of I think I am like the crowdfunding wet blanket because I’m forever saying you’re doing it wrong. There is all of the stuff you’ve got to comply with. Just because it’s a whole new online environment, doesn’t mean that the old laws still apply. There are the old laws that still do and they’re still complicated. And you still need a guide to help you through them and just ignoring them or Yeah. I keep having the mom conversation with all of our clients, because they’re like, well, those those guys are doing that those guys. Yeah. And unlike Yeah, ya know, if everybody jumped off the Brooklyn Bridge, would you want to do it too? So we, we do have an uphill battle to try and keep everybody compliant.


Rafael Gonçalves 05:16

Okay, okay. See? Well, Sara, just, before we start, the first question I have to ask you is one thing that came to our attention recently is that we see the SEC announcing charges, right. Believe the most famous case was when Kim Kardashian was charged for touting on social media, that crypto asset security. We also have other CEOs and other CFOs that also have also been charged. So has the SEC been charging more people? Or is it just getting the media’s attention now?


Sara Hanks 06:00

I think it really got the media’s attention because it was Kim Kardashian, who got into trouble. And because the amount of the fine, which was a million dollars might not be much for her. But you know, for a normal person, that’s a heck of a lot of money. And so, this is not new. I mean, the thing that the law that the SEC is enforcing here is the stock touting on it sounds terrible stock touting that sounds so sleazy. But it’s basically it’s section 17 B of the Securities Act. And it says, if you draw attention to an offering, not even recommend, not even tout, just if you draw attention to an offering of securities, and you get compensated for it in cash, or chocolate, or anything else, or in crypto, then you must disclose who’s paying you and how much and then what emits a simple disclosure. And it’s the same thing, as you know, it’s paid advertisement, you see those paid sponsorships, legends, on various disclosures, it’s the same sort of thing. You know, don’t tell people don’t get paid for telling people that there is an offering without telling them that you are being paid for telling them. And so it got everybody’s attention because it was Kim Kardashian and she’s all famous and everything. But this has been going on for a while. I mean, you know, there’s, there’s a famous boxer who’s been, I think, fined twice for this kind of thing. And then if you go back, like 20-30 years, it’s showing my age, a long time ago, though, there was one case where the SEC rounded up, like 28 Different plaintiffs and find them for violating this section. And it’s like I say, it’s really simple to comply with, you say you’re being paid, and who’s paying you and how much. And you can have just a link from your Tik Tok ad or whatever. But you’ve got to have it. And it’s, it’s a question, not just of, Oh, my goodness or the securities laws are so complicated? And how could anyone know, you should know. That if you are being paid to publicize something, and you don’t tell people, surely you should know, as a grown-up human being? That’s something that people would want to know. So I don’t have a lot of sympathy for people in this space, who are using their celebrity to promote things and not telling investors that they’re doing so. But yeah, it’s not new. It’s just got really high profile. And there’s another case, you know, a couple of weeks ago, I against a well-known publisher, who was doing something similar, I mean, that they, they got into trouble for a whole bunch of things, but one of the things they were getting into trouble with trouble for was, again, being paid under the table. So it looked like they weren’t being paid to publicize offerings. But in fact, they were being paid because somebody was picking up a huge bar tab or that sort of thing. So, however, you’re being compensated, if you’re getting something for telling people about an offering of securities, then you’ve got to tell people that you’re getting compensated.


Rafael Gonçalves 09:39

Yeah, this is this is basically it if you’re being paid to do something that shouldn’t be told. You shouldn’t people should be aware of their rights. And it’s good that it took Kim Kardashian to do something wrong for the media to get attention. But yeah, as you said, there are lots of small companies and small businesses and people that are starting to invest, and they might not know exactly where they are getting into, right? I mean, it’s, it’s still something very new. The commercial Internet, as we know, it today is what, like 30 years ago, 35 years ago. It has, it has surfaced not long ago. So everything has been changing so quickly that it’s important to keep track of compliant things, right?


Sara Hanks 10:33

The challenges, of course, because as you say, you know, the internet is compared to the securities laws, which had been around for 90 years, the internet’s relatively new. And there’s a new challenge every day. And so the SEC is constantly playing catch up, as they try to apply these old laws to new situations. And we are forever going over to our friends at the SEC and saying, Okay, so we’ve got this really weird situation for you, we want to use reg CF to do series offerings, or we want to do this thing on Tik Tok, or, in the middle of a video game, we want to advertise our the securities offering of the company that’s making the video game. And poor SEC is like, Oh, my God, you keep coming up with these weird fact patterns. But that’s the thing. I mean, our clients are really innovative folks, they are going to come up with weird stuff. And some of it will work. And some of it won’t. But what we have to do is make sure it’s compliant, however weird it is.


Rafael Gonçalves 11:39

Yeah, you cannot you cannot play a new game with old rules, right? Yeah. And it’s literally making rules as the games go on.


Sara Hanks 11:46

Yep. Now we spend a lot of time going, Okay, well, we don’t have any guidance from the SEC. So we think this is the appropriate thing fits with the spirit of the law and the letter of the law as far as we can interpret it. So this is what we’re going to do. And you know, hopefully, it’s well meant and becomes industry practice. We do see people copying what we do a lot.


Rafael Gonçalves 12:12

Yeah. There’s, there’s something else that I’d like to ask you. Because this is something that we listen to a lot for more clients or other KorePartners. And we even have a sentence in our blog that says that’s not enough for the broker dealer, just simply do the KYC. Verification, right and know your customer verification, you’ll get you need to keep asking the hard questions. Whether you’re in investor acquisition firm, I mean, you’re creating and delivering the messaging the acids, you must also be diligent in ensuring that you are telling the truth on their behalf. But you’re telling the right story. What kind of hard questions can we keep asking, Can we ask to help to even help the SEC come up with these new regulations? And this new this new in this new setup of the market that we have?


Sara Hanks 13:07

Yeah, I mean, I think that the constant question and I know this might sound trite, but that the constant question we keep coming up with is, Is this accurate? And what we’re seeing is an and this came up for me in spades yesterday, as I was going through an investor report that was talking about a particular sector where there was stunning growth. And, you know, the SEC is not used to seeing this kind of promotional material. And the SEC is also and I think, if you go back to what they were expecting this market to look like, they were expecting that the disclosure in the reg a form 1A or the reg CF form C would be the thing that will be used as the marketing to the investors. And as we all know, and it’s very sad, investors aren’t reading that, though. They’re reading the online offering page. And the advertising and we can talk about the advertising later. But you know, when you look at some of the statements that are being made online, everybody is responsible in different ways for making sure that whatever is being said, is accurate and not misleading. You’re not giving a false impression of the potential upside and the potential downside. And so I think, everybody in all of the service providers, whether it’s the investor acquisition firms, or the other marketers, the publishers, the brokers, the lawyers, everybody has an interest in making sure that this market does not collapse because it just gets a terrible, terrible reputation. And everybody’s got different levels of liability to go back to what you just said about the brokers, brokers have the highest level of liability. But everybody else is not kind of exempt. And what everybody in this market should be doing is looking at the information that’s presented to investors as a whole, not just sort of picking out bits and go, Well, all of the risk factors, and there are huge risk factors in the offering circular. And so the investors should have read that, well, you know, we know they’re not doing that. So go to put yourself in the position of the investor and say, I am going to look at this. And here on this offering page, there is a statement about this being a low-risk investment opportunity. Is that accurate? Does that give a misleading impression? Those are the hard questions because, you know, you can always kind of find some justification for whatever it is you’re saying. But when you take a normal investor, like, you know, my dad used to do day trading, and not as he was a former CFO, but you know, he wasn’t a sophisticated investor. And you got to ask yourself, now, if my parents read this, would they understand what the risks are? Is this a balanced presentation that’s been given to them?


Rafael Gonçalves 16:42

Yes, I mean, it’s talked about a father, gut feeling over technique, right?


Sara Hanks 16:50

Um, my dad would, you know, get he got all of those newsletters. And, you know, he believed in what they said, and so know that the publishers have an obligation and this is we talked about that the enforcement actions by the SEC as well, there was a recent enforcement action against one of the publishers, when you look at the way that all of that information was presented by the publisher, there’s a huge amount of hype. And that is not good for anybody.


Rafael Gonçalves 17:26

Yes, yes. And also marketers, writers, as whole editors, it’s also we as social communicators, we learn very early in order stages in college, about social responsibility, right? And, and this is something that we’re dealing with lives here, right? Because the entrepreneur is a small business, the investors are small businesses. And you cannot know the law and just oh, sorry, I broke it. I didn’t, I didn’t know. I didn’t know it was illegal, it was wrong. You cannot say that in court. I believe this worldwide, there’s not going to a single country, we can say Oh, you didn’t really get to do that. I’m sorry. And the judge would just go, Ah, don’t worry. So


Sara Hanks 18:17

yeah, you met? Well, yeah. And this is, you know, especially with entrepreneurs, this is always going to be a challenge because entrepreneurs by, you know, by their nature, they wouldn’t be entrepreneurs if they didn’t believe in themselves in their team, and their offering. And so they are going to promote stuff. This is going to be you know, the category killer. This is going to be the app to beat all apps. And they really don’t understand some of the nuances between you know, what we call lawyers called puffery and misleading statements. So you can, you could say, you know, we are the best muffin shop this side of the Missouri River. That’s puffery, that’s fine. But if you say we are the fastest-growing muffin shop, that’s an actual fact. And making the distinction between those two, well, this one is okay. And this isn’t, is a challenge. I mean, we keep we have a huge internal manual, several hundred pages now, and in one chapter of it is our bad words list that we are always adding to things that need to be challenged, leading to proven outstanding, staggering, staggering profits came across that one yesterday. And then as the years have gone by, we’ve added not just bad words, but also bad sounds Kuching can’t use that we’ve actually had that, and then images and things like with stop prices going up and up and up and up got us that.


Rafael Gonçalves 20:03

You need to have a team dedicated to update that as well. Right. Like on a daily basis.


Sara Hanks 20:10

There’s there’s always new bad words. It’s It’s amazing.


Rafael Gonçalves 20:15

Yeah. And they keep getting worse or not?


Sara Hanks 20:19

You know, I think there is. And to go back to one of the things I said earlier, you know, I spent all my life these days going well, you can’t do that. And everyone’s like, well, those people are doing it like, Yeah, but you know, the SEC is going to end up suing them. And you know, it’s the mom, the Brooklyn Bridge thing again. But, yeah, I think it is getting worse. The one thing about this market is we’ve seen in the Reg A market, much better companies using Reg A, we’re seeing better companies using reg CF. But on the other hand, we’re also seeing techniques and marketing that I think are problematic. The some of that some of what the marketing companies, part of the problem is that you’ve got marketing folks coming in from the non-securities world. And they like the entrepreneurs don’t see the difference between puffery and misleading statements. And we see misleading statements all the time. Some, some people talk about, you know, there is no fraud in crowdfunding or very little fraud in crowdfunding. And we always push back on that because you cannot go into a reg CF filing, especially because there are more problems in CF than Reg A  because the SEC is not reviewing that. And it’s impossible to go into a reg CF filing and not find at least three misleading statements and misleading statements on fraud. So just to go back to the accuracy thing.


Rafael Gonçalves 22:11

Yes, yeah. As a journalist, one thing that I study is a lot of history, a lot about fake news. And it’s just like you said, misleading statements. It’s just a lie. And lying is you can call it a bad word, or you can call it fake news. It’s still white, it’s too unfair, it’s still not. I mean, it’s incorrect. And it should be targeted, of course. And this is something that communication professionals, and marketing professionals have to keep in mind, you have the bad words list. And we cannot just keep finding a new way to say that in a little different way, we have to make it better, we have to make ourselves better. And we have to find a better way of doing things. That’s, that’s basically it. It’s nice. Another question we have to ask you is about these online platforms, we have funding platforms, and we have a lot of companies that help you invest and help you suggest investments. And some of them grow out of nowhere, and some of them just disappear. How can we know? I’m an investor? How can I know if I know one platform is compliant? Which steps would you recommend for me to follow? When should I check? Can the SEC help me? What should I do to know if a normal platform is compliant?


Sara Hanks 23:34

Yeah, that’s a real challenge.


Rafael Gonçalves 23:38

In the million dollar question, right? 


Sara Hanks 23:41

You don’t know how well any of these platforms are, you know, analyzing the offerings that are on their sites. On the one hand, you’ve got the really well-established platforms, most of which have a compliance department, and they have, you know, legal departments, they’re still small, they’re still young, but they have, and they have very routine, they will check. Has the company approved it? The here is that the company actually exists. Which is always one of our first questions. Because you’d be amazed how many times the company actually doesn’t. But does the company exist? Has it approved the securities? Have they been properly filed with the states? Have they been approved by the Board of Directors, you know, all of these steps? But the one thing that they can’t do, because nobody’s got the resources is, is to go in and take each individual statement and fact check them, which is one of the things that crowd check does. But that’s knowing who it is who’s doing that and who is not doing that. is clearly not apparent from the outside. I mean, you go on to platform a and it looks like they’ve got masses of companies within Oh, or do they? Are they? Are they doing due diligence? You just don’t know. The only way you really know is if the SEC or somebody comes in and sues them later, which, of course, will happen several years after. So some of the platforms are just slick, and they’re great. I think one of the ways that if you really wanted to do homework before investing, and this is not what the burden should not be on the investors. But if, if I’m an investor, I’m going to go in and the first thing, I’m going to look at the actual filing by the companies on the site. And you can pretty much have a good idea by going through the SEC s, Edgar filings, you can see what the company has filed for whether it’s updated, and whether and if it has ongoing reporting obligations. But you know, I know those things, because I’m a securities lawyer, a normal person is just not going to be able to see, oh, this platform has this company on and this company is noncompliant with its ongoing reporting. So I think the platform might be at risk, that is a huge burden to put on somebody who’s trying to decide whether to put 500 bucks in a company or not. So it’s difficult. I mean, we were in a period of consolidation. There’s a number of people moving in, there are 50-60, Reg CF platforms out there, that’s too many. There just there isn’t enough business to support them. So there is some consolidation, some purchase. And so that’s one of the things that we’ve been doing is assessing compliance of platforms. But that’s something that, you know, investors shouldn’t be required to do. So yeah, the only clue that an investor has as well, nobody’s closed them down yet. That’s kind of unsatisfactory.


Rafael Gonçalves 27:12

Yeah. That sounds really solid. Nobody should. Yeah, that sounds really solid. Yeah, I like it. I like it. That’s good. That’s good. But yeah, I agree with you know, I mean, the issuer the companies should have should be careful. And the investor shouldn’t have to worry about that. Because if the offering is live, if the company is live, the company’s there, we should have we should. We should leave. Things are okay. Right. Yeah. And that’s, that’s the great struggle that the SEC must have, and you guys at CrowdCheck must have on a daily basis because rules are changing, digital assets are changing. Securities are changing daily, and we cannot play a new game with old rules. That’s just how it goes. There’s another question. I’d love to ask you. Because we have had this question before, in one of our posts or blog postings or social media don’t remember exactly is about let me let suppose that a company has a live Reg A offering. Can I use call centers to offer or to gather investors? And how can we use it compliantly? Can we use call centers to call people and offer my shares?


Sara Hanks 28:30

Yeah, it’s a really good question. And that there’s only complicated answers, of course.


Rafael Gonçalves 28:37

Sorry. I’m sorry, but I got to do them. 

Sara Hanks 28:41

Yeah. So I mean, in theory, yes, you can use call centers. But the thing is, that the call center itself must be compliant with the securities laws and not say anything misleading as well as it cannot be acting as a broker-dealer, for example. So one of the challenges that we have with crowdfunding, in general, is the broker-dealer registration requirements. People who pick up the phone and say, Hey, you should buy these securities, could well be acting as brokers accompany is always exempt from the broker-dealer rules. Well, that’s when it’s selling its own securities. But its affiliates. That is its officers and directors need to be clearly not acting as broker-dealers unless they get registered as such. And there’s this complicated rule three, four dashes one, which you cannot. It’s an exemption of safe harbor from the broker-dealer rules, but it applies more to hedge funds and more to entities that are doing an offering that has a beginning and an end. And, where the offerings aren’t being made multiple times a year, with crowdfunding, these offerings, mostly on the Reg A side, open for three years on the reg CF side, usually at least six months. So it’s an ongoing offering, it’s very hard to fit into this safe harbor that says, Well, you can only be doing either, you know, once a year, and you’ve, if you’re doing any marketing for the company, you can’t get compensated by reference to the amount that you sell. So there are a lot of complicated rules there. And that’s just on the company side, looking at the company’s agents like a call center. If the call center is doing nothing more than noticing that Mrs. Jones was putting in her information, and somehow failed, or dropped off. And she got to the point where she had to enter the routing number of the company of her bank and then didn’t go any further. Fine for somebody in a call center to say, I noticed that you seem to have had a problem. Can I help you through this? Can I help you with the logistics? Can I help you? This is how you look at your checkbook. And you see there’s a routing number, or you look at your statement, and this is how you fill in that information. What they can’t be doing is then when Mrs. Jones is like, Well, yeah, I stopped because I wasn’t sure if this was a good investment or not. What do you think, can’t answer that question. You absolutely can’t. And what you absolutely can’t be doing is like, like boiler rooms, picking up the phone and saying, to Hey, have you heard about this investment? I mean, you can’t be out there marketing. So the call centers, whether they are brought in-house, which some of our clients have done, they actually work as employees for the company, or whether they are, you know, outsourced? What they are supposed to be doing is logistical stuff getting as close to this exemption, I mentioned the safe harbor three, a four-dash one, and not doing any selling. We believe that I mean, I know that our script or connects has been distressed by the amount of activity that there are Canadian entities I potentially going further than that. The one thing that I will note, as lawyers, we very rarely get looped into that conversation. And I think it’s because they think if they tell us what’s going on, we’re going to stop them doing it, which should be a signal to them that they shouldn’t be doing it in the first place. I mean, if you’re afraid that your lawyer is going to stop you from doing something, just don’t do that thing.


Rafael Gonçalves 33:06

Yeah, if you want your lawyer to agree with you, you don’t need a lawyer. Exactly. Don’t need a lawyer just like when you go to the doctor, and you have back pain or something. I’m not gonna take that medicine. So why did it go to the doctor in the first place? Yeah, that’s exactly how I think and so basically, the call center is okay to use, but the call center has to pay attention to the approach to the script, right, that they use.


Sara Hanks 33:37

Yeah, exactly. I mean, you know, scripts are really good in these circumstances. Because that helps people who are not going to be trained securities lawyers, you know, they just call center folks. It helps them through what they shouldn’t be doing. And they say you should also have a list of complete no-no’s, like, you know, if Mrs. Jones asks, Is this a good investment? I can’t answer that. But why don’t you read the offering circular? And there’s more information there, pay attention to the risk factors, and then make up your mind. 


Rafael Gonçalves 34:15

Because there are ways to act, right? It’s not like you’re actively selling them, but you are, but you are not..


Sara Hanks 34:21

You’re just assisting them. You’re assisting them. I mean, you know that the SEC is in an object is that investors make informed investment decisions. The SEC’s approach is full disclosure. It does not merit disclosure, it’s not we’re going to decide whether this is a good investment for you or not. But you have to get the tools into the hands of the investors. And here is the disclosure document and you read it. And hopefully, if you read a well drafted, offering document, whether it’s the form c or One A, you should in the end be able to make an informed investment decision that might not be, you know, it might be super risky. But if you understand the risks, that’s great.


Rafael Gonçalves 35:11

Yeah, there are no investments without risk, right? I mean, risk depends on your tolerance to it. Yep. Every investment has at least one, even if it’s small, but if there’s a risk, there’s always a risk there. And just, we are over half an hour. So I just want to ask you one last question, because, on October 26, you will be joining us in our Core Summit, our pocket sessions on cannabis. This question is going to be answered. Then, of course, we’re going to talk more about cannabis, especially after Biden’s last announcement. The criminal decriminalization has probably started. But for cannabis, we’re going to talk about that. But we can talk about that for the general public as well. But how can I know which regulation should I have to use for my company? How should I know? If Reg A is better than reg CF for my case? What questions should I ask myself as a company?


Sara Hanks 36:15

All right? Well, I mean, the starting point, it’s always going to be what exemptions and am I eligible for. Because, as you know, Reg A is US companies only, that are actually managed from the US, and Reg CF is us. and Canadian sorry. US and Canadian actually managed from the US or Canada, Reg CF is for US companies only, but there’s no obligation that it be managed from here. So you could be it could be somewhere else, I guess. And then Reg D does not require that you have a presence here at all, then you’ve got things like, Are you acting as an investment company, that is you’re investing in other companies holding other securities. So you always want to go through the, you know, the eligibility first, and there are slightly different eligibility requirements for each one. So that’s your first filter. And then the second question is, well, how much do you want to raise? Because really, it makes, if you think that you, you want to raise or you can raise over 5 million, then obviously, Reg A is for you. If you really aren’t sure. And if you don’t want to commit yourself, you want just sort of test the market, then CFX might be the way to go. And it’s really fairly simple. To go from a C F to an A, if you have decided, if you said from the unit from the beginning, that’s the way you’re going to go. One thing that we do see is if you’re doing a CF and you know you’re going to do an A, you really want to warn people, investors that we might be doing Reg A, we’re considering it. And of course, if you mentioned the possibility of doing a Reg A the special language that needs to go in, and you want to warn people that there may be a completely different set of information. And you might make a different investment decision if you’ve got the Reg A information, rather than the reg CF information, which is much more limited. So, yeah, think about what your trajectory is going to be before committing to the CF. And if you’re looking at first for less than 5 million, CF would be the starting point. Providing you’re not Canadian.


Rafael Gonçalves 38:55

Yeah, money, money. Yeah, money without a plan is it can be either good or itcan’t be good. If you can raise money without a good plan. It can, but it cannot be good. You have the illusion of having a lot of money and being able to do a lot of things. But it’s the best thing is to have a plan and of course, read the regulations. Right and look for and look for appropriate partners to help you get there. Right.


Sara Hanks 39:25

Exactly. I mean that the plan is really important. You have to if you don’t know what you’re going to do with the money, then maybe you should be raising any you’ve got to and especially with REG CF, where you’re able to set a very low target amount. So we’re really looking for 5 million because only if we get 5 million can we build the new warehouse. But you know, we’ll set a target of 10,000. Well, that 10,000 is just thrown away, because you didn’t have a plan for it. And so think carefully about how much and why and what you’re going to do with them.


Rafael Gonçalves 40:05

Yeah, like Alice in Wonderland, if you don’t know where you’re going any path to do. Yeah, and empaths who do so, Sarah, it was great having you over. I hope we have more opportunities to talk and to ask you hard questions. I’m sorry for those, but somebody’s got to answer them.


Sara Hanks 40:26

Yeah, I wish. I wish there were more answers.


Rafael Gonçalves 40:29

Yeah, let’s, let’s hope let’s keep working for them. And you will be joining us in our course summit on the October 26. KoreSummit will be actually from October 24 to 28th. But your session is on the 26th. The cannabis business has been growing a lot. Biden’s announcement last week on the decriminalization of sessions and then everything I think it’s, it can be a real game changer. But that’s it. I want to thank you for your participation. And if you have any final message for our listeners and our viewers, please, that’s the time to do it.


Sara Hanks 41:09

Okay. The only message is, regardless of what everybody else is doing, comply with what your lawyer tells you to do.


Rafael Gonçalves 41:18

Yeah, always rely on a good lawyer. That’s it. And thank you, everyone, for joining us. If you’re watching us on LinkedIn, please don’t forget to follow the page. You can also subscribe to our channels on YouTube Spotify or your favorite podcast player. We’ll get back soon next week. And the other week we’ll have the KoreSummit. So stay tuned and we will see each other more often. Thank you Sarah, and thank you, everybody. Bye bye. Thank you


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