KoreTalkX #7 with Stephen Brock


Peter Daneyko

Managing Director


Peter Daneyko

Managing Director

Entrepreneurial business development executive who brings ideas and people together for the delivery of new products and services to market. The start-ups that I helped found have produced a variety of innovative applications and new businesses with measurable results. They range from downloadable marketing and educational tools to custom digital signage to on-demand apparel manufacturing. Founding partner of Whimsy Rose, a print on demand apparel brand; which has produced and sold over $20 million worth of apparel through its in-house developed production system. - https://www.whimsyrose.com/ Founded AppWare’s, creators of Deskplayer, - a marketing application design company that produced apps generating over a million downloads for brands ranging from Sony Music to Budweiser, to Marvel. Developed, and delivered customized video delivery and educational communications tools for corporations such as Deloitte Worldwide, to the Pharmaceutical industry for the on-demand delivery of accredited professional development educational courses to Physicians. New Initiatives: A co-branded community-based photo-apparel label and an On-Demand consumer profiling/persona services company. (ProfileNINJA) by http://statanalytics.ca & http://www.didanalytics.com Specialties: • Strategy for Business Development • Maximizing Sales • Analysis & Forecasting • Enterprise Sales to Senior Executives • Program Planning & Implementation • Product & Market Identification • Communication & Negotiation

Stephen Brock


Medical Funding Professionals

Stephen Brock


Stephen Brock, CEO of Medical Funding Professionals, is a registered investment advisor with over 22 years of experience in the financial sector, including private placements, public capital markets, and regulatory compliance. He has helped over 50 companies enter the public capital markets, including his own.

Peter Daneyko 00:45

Looks like we’re live. Hi, I’m Peter Daneyko and welcome to KoreTalkX number seven, where we dissect capital raises, crowdfunding, Regulation A+ and Ref CF. And my co-host is Stephen Brock of Medical Funding Professionals. Stephen, great to see you here again.


Stephen Brock 01:03

Good to see you, Peter. Lovely day, thanks for having me on. Really appreciate it.


Peter Daneyko 01:07

Hey, I’m really excited about this. This is kind of a bit of a preview, a bit of a what’s to come for Wednesday afternoon, where we have a four-hour med-tech summit. And you know, the how the growth of Reg A plus and Reg CF and the med-tech community has really taken off. And, and I want to put my hat’s off to you, Steven, because, a large part, you’ve been one of the great educators over the last couple of years. And hopefully we’re going to share with some of our audience today, what’s to come on Wednesday. And as a jumping-off point, maybe you can give me a little bit of insight as to why you think Reg A has been really, really early, but really becoming adopted by the medical innovators who are looking to change the lives of patients. So I’ll turn that over to you.


Stephen Brock 01:52

Well, we have spent the last two years educating the marketplace in life sciences, which we call med-tech pharma, life sciences, and biotech. And so, being able to bring this option to that sector has been very special because it wasn’t known or used by many of these people because they just didn’t know it existed. So the fact that we could help them learn that there was another path instead of the VC path or private equity path was really awesome for Scott Pantel and I to be able to show them under our co-chair program for the capital pain valuation strategy. How does this work? Why is it in our best interest? And how do we get this capital raised differently than the old fashioned way? So the deregulation of the capital markets under the Jobs Act has been very, very special for actually many entrepreneurs, using Regulation A-plus, CF and 506 C, but especially for the med-tech community, have been able to see another pathway to get capital raised.


Peter Daneyko 03:04

Sure, let’s talk about a lot of people still don’t may not understand you said it’s a bit of an education or it’s been a journey of an advocate education. So one of the things that’s that’s transpired, literally took ten years. We talked about this thing called the Jobs Act. And we talked about Reg A and Reg CF. And the last two years, some data that I looked at was there’s been like a 400% increase in Regulation A plus filings. It kind of appears to be like a overnight success in a sense, or an overnight exponential growth. What do you attribute to that to whether it’s in the medical community or just at large? What do you think that is beyond the education? And maybe that’s a big part of it?


Stephen Brock 03:49

Are you referring to the med-tech community, or just in general, overall, the whole space?


Peter Daneyko 03:54

Well, well, the med tech, I guess, I guess it’s somewhat all encompassing. But we’re let’s focus on the med-tech community. So there’s a big increase in Reg A filings. And there’s a lot more crowd participation. And I was just curious about your take it, do you think it was just an educational thing? Or what what were some of the friction points now that the medical community is saying, hey, I want to raise capital this way? Or is it just them understanding the value propositions that exist?


Stephen Brock 04:21

Now there is a bigger increase in the medical world of using Regulation A plus, but it is recent. So I think, the fact that the markets have been a challenge, that SPACs have been a challenge, that them that group, that sector learning that there is another path. It’s a little bit more, I think, a lot more stable, actually, then, having market prices affect you have allowed them to at least look at the new way. And so they are jumping in to use the tool that’s been around for several years. I just think it’s education awareness, the markets have changed dramatically, and they have to find other avenues to get that capital in the door so they can execute.


Peter Daneyko 05:09

Yeah. And I think trust and compliance is anything new, it takes a little while for that adoption. To say, hey, I have to feel good. As an investor, I have to feel good as an issuer. And I have to more importantly, understand what this is all about. I’ve just was looking at something recently, and it was to do with Well, wasn’t even looking at something. I mean, we have conversations every day with med-tech professionals. And I was very fortunate to attend the LSI summit that Scott and and yourself, we’re, we’re super integral with that word LSI. And I almost fell off my chair. And maybe you, I’m going to share a little story here. And maybe you can tell me if this resonates with a lot of your conversations. So I’m meeting with a medical professional, he was in the med-tech life sciences, serious serial entrepreneur, and we’re having lunch. And he says to me, you know, what are you guys doing here? And we said, we’re technology facilitator, and we help companies raise capital from a tech perspective to bring all the intermediaries together. And he said, Well, what do you guys mean by that? And I said, Well, there’s this thing called Regulation A and you can raise $75 million. And I said, How do you rate raise your capital? And he says, Well, we’re here kind of learning more, and we want to learn about these things. He said, But you know, we raised our capital, the traditional way, I go to the VC, and I do this. And I said, Well, tell me the story. Tell me the journey on that. And he says, he goes, Well, I, I need to raise $5 million. And I said, What do you really need to raise? And he goes, Well, I need 5 million right now. And then I need to raise, raise $50 million dollars. And then he says to me, and he says, I go, I’ve done this before? And he goes, Yeah, I’ve done it three or four times, and I go, were they successful? He goes, some of those were successful, but I didn’t get to keep enough, enough of the money. And I said, Well, tell me a little bit more about that. He says, Well, you know, I need five and then 50. And you get carved away. And I said, Well, what do you expect to keep? And before that, before he had raised a dime, he said, I hope to keep 10% of my company. And, look, I’ve been an entrepreneur, and nowhere in my life, have I ever thought of saying, I’m gonna plan to keep 10% of my company before even start the journey? And I don’t know if that’s a commentary in the med-tech community, or whether it’s a commentary of lots of traditional ways of funding. What’s your, what’s your thoughts on that? Because it just really floored me, Steven, when I heard that story.


Stephen Brock 07:41

Yes, most of the people that are used to VC are used to having a big bite out of their cap table. So the fact that that answer came out is normal. But many of them do not want that to be normal. So they want to see how do I keep more of my company as a founder, because having more of your company gives you the passion to get to endpoints, and milestones. And so if all of a sudden, you don’t have 80% of your company anymore, it’s hard to have that passion maybe. But the other side of the coin is, I just brought in $75 million, or 100 million dollars. So to them, it’s worth it. But that is the normal thought process because of what they’re used to historically. So that’s something that we have worked hard to show them. How that can change by using pro forma cap tables and projections that show them how you stay in control? So we’ll show them what does it look like if a founder stays in control what original shares look like? And the getting in the weeds there? The problem is, they didn’t realize that they were sometimes losing as much control if they executed a VC term sheet. Sure, they’ll figure it out. But it’s, it’s normal for them to think that, and our job is to teach them there is another way?


Peter Daneyko 09:11

Well, it’s Yeah, and I guess it does so common, I think part of the education of saying if we’re going to raise capital through the crowd, I, you know, I’ve heard certain narratives over the years in conversation with folks who say, Geez, why do you want to 10,000 shareholders? Why do you want 100,000 shareholders in a private company? And I kind of scratched my head on that narrative because if I’m a public company, why do I not want large volumes of shareholders? So I think that I think the narrative historically has been technology also wasn’t there to facilitate that, you know, the management of those shareholders. And I think a lot of entrepreneurs may have simply thought that I don’t know how to manage this. And I think that maybe that’s part of the evolution. We’re technology and the regulatory exemptions have kind of converged with the market awareness to the public to say, hey, you know, you’re you’re talking about taking greater control of your company. And I think that’s the key to any entrepreneur. And that’s any, any founders say, How can I control my company and, and have the best journey for both my employees? And anybody who’s participating? You know, not just my employees, but participating with the raise? So do you think that going to the crowd in the Med-Tech community and share another little conversation I had? And we talk, we hear the term democratization of capital, you think it just opening that door to the general public where they can, whether they’re impact investors, whether they’re looking to, you know, to find the next great thing that’s going to be, you know, a legacy, you know, investment for their family for generations to come? Where do you think the line is there to say how many investors are, I believe in, I believe in, I believe in this entrepreneur, I believe in the vision of this new medical device. So I believe in you know, they’re gonna make a difference in the world versus to say, I just want to pay I just, I just want to make a lot of money at the end of this. What’s your thoughts on that?


Stephen Brock 11:16

I think that the management of that many shareholders with the KoreConX platform takes that risk, or derisks it to some degree in being worried about keeping many shareholders. I think it’s a training exercise. It’s necessary for the founders, the CEOs, and CFOs boards to get somewhat comfortable about that, because that is something that comes up once they get comfortable and can see that they don’t have to run those through their Excel spreadsheets and manage all that. That’s easier for them to get their arms around it, the shareholder and the democratization piece, what an awesome way for the retail investor to get in early to be able to build their balance sheets, and have fun along the way, watching companies that affect lives, and the human body so dramatically and drastically as the companies in the life science sector. And the fact that you as an investor can be part of that, and impact that and help those groups move the needle in the space of cardiovascular, whether it’s orthopedics, whatever x is, is just an amazing option footnote available for like ever, for the retail investor to get in early and be part of that. So I think that if the founders and the inventors can understand the value proposition and have a lots of shareholders, which also helps them have ambassadors to increase those sales. When they’re at a commercialized, if they’re not commercialized yet, it is also a secondary benefit to buy into these companies earlier than when they go public. So I think it’s a nice circle effect for a retail investor to be part of, and the founders are not worried about it because KoreConX does a such a great job on the blockchain of managing those.


Peter Daneyko 13:14

Well, thanks. Thanks for the commercial and that Steven. But yeah, you’re right, Tech has made it much simpler, as far as the number of shareholders you have on your cap table its no longer an issue. But I think what you touched on and say you’ve got these brand ambassadors and these brand advocates. My daughter, she’s at home for a couple of months from school, and she’s in biomedical engineering. And she gets to hear me speaking to all these different entrepreneurs, as I’m when I’m working out of the house, and I’m not in the office. And she is one of those people that says, Oh, my gosh, dad, I’d invest in that company. I love that story. And I said, why she goes, because they change, they’re gonna make a difference. They’re going to change things in people’s lives. And I said, well, about the money side, she goes, Well, the money be great. So so that whole narrative of saying why, you know, that impact investing, and looking for the future, but really helping these entrepreneurs and being you know, again, bringing a brand advocate is really, really true. At your summit, I had another story, or the LSI Summit, another story that somebody shared with me. And I said, Why are you doing a Reg A? And he said, well, so that the crowd can participate? And I said, what part of the crowd what you know, what do you know? And he said, to be honest with you, I had a somebody say to me because one of my nurses say to me doctor saying can I invest in your company? And up until now, the answer was no, no, you can’t. And in the case of nurses working with physicians, depending on what field they may be in or discipline, they were probably the most knowledgeable individuals. Still, they couldn’t participate because they weren’t an accredited investor. And that’s just that’s what the crowds were really about to you can also go after your audiences that relate to whatever product that you’re producing or whatever service you’re producing. And it’s, and they’re probably the most knowledgeable, but they’re gonna see that impact, they’re going to see the impact on people’s lives every day, but excluding them. And that’s the beauty. I think now, you know, and I’m such an advocate of crowdfunding, and an advocate of Reg A and Red CF, it’s just beautiful. I could just saying, what we have people in our office, when they see some of the offerings that go, I just, that’s just an amazing story, I’d like to put some money into it. And now they can, so there’s so much more to it than just, you know, looking at just raising capital for capital’s sake. I mean, businesses can’t, can’t move forward. But these businesses in the med-tech arena, they’re impacting people’s lives for now in the future. And I often wonder how many deals got stifled or went by the wayside? Because lack of capital, and I think the ability for the crowds to participate can change that narrative dramatically. For the companies, don’t get me wrong, you got to have a good company, it’s a lot of hard work. But to me, it’s just that ability for that wider reach of an audience is, is super, super special.


Stephen Brock 16:14

Well, we have to get the founders and the investors VC, private equity, high net worth accredited angels, all those groups to know even more about Regulation A plus as available to them to even de-risk a little bit of what might be in their portfolio, just because they have to buy everything up on their own, maybe they can see it, if they can take the time to see it, that hey, this is a value add to our companies that are in our portfolio, let us use Regulation A plus to help them raise capital  at a higher valuation, but a lower program of them not having as many shares available to themselves. So that would be very, very special for the world to know that this is available to them as an investor, but also even in other countries, Europe, etc. Like VLSI event, coming to the US and possibly setting up shop to utilize that it might be a great economic development program for other companies and other countries to realize they should set up an operation in the States because of this incredible deregulated tool to raise capital under.


Peter Daneyko 17:30

Well, that’s the other thing. I mean, I don’t know if everybody is aware that you can raise capital from the world with things we you know, I mean, there’s certain sanction countries that you can’t take investments from and don’t necessarily want to take investments from. But it’s a global thing. So depending on your product or service offering, device offering, or whatever the medical technology may be, I mean, it’s impacting not just one marketplace, it does impact the globe. And, look, we live in this world of the internet. And I mean, it’s as obvious as it sounds. If you’re not taking advantage of that potential to get your message out there, I think companies are just missing out on that opportunity. But it takes a team to do so. And you’re very involved with the team of various intermediaries because you’ve got broker-dealers, investor acquisition firms, that have to do the marketing outreach. But it all starts with, I guess, the initial stage in that planning, and you touched on something earlier, Stephen, maybe you can enlighten all of us a little bit more. We talked about capital planning valuation strategies, and what goes into that what goes into, like, when you’re mapping out, you know, a company says it’s going to this is a 10-year journey for me between FDA approvals and, and getting our product to the marketplace, for example, and you’ve got to map out that plan today and establish the valuation today so that they know what the market potential will, what’s that like? What what is maybe you can explain it. Explain to me explain to the audience what you actually do for those companies that are trying to first start their valuation? Hello,


Stephen Brock 19:33

We do like to get NDAs from all the companies that we are working with so that everybody can feel safe about their data because we do ask for data in that strategy, but part of that piece is to let us have your data to work around and study. The cap structure that you have. Sometimes people only have 200,000 shares they may have had issued outstanding. That’s really hard to raise $40 million with that amount of shares issued now saying, we’re going to restructure that and show them how that should look. And then, of course, the legal background safety to the company. Maybe there’s some reorganization of corporate charters and exemptions that they haven’t executed on the necessary market research, being able to show the potential of some bridge funding arrays available because of what’s called selling shareholders being able to have industry access and strategies all under our CPS program, because it’s important to us, for them to see the whole picture of what’s possible. So what long term? What does it look like now? Maybe they’ve been in business for two or three years. Maybe they are getting ready to commercialize. We have a client that’s been in a space and on their third step, being able to have the FDA look at them in clinical trials the third stage, and they’ve been doing this for 14 years. Awesome company. So coming to the market at the right time is also important. You can always go to the market if you don’t have the right patents in place. And is it a viable candidate to go to clinical trials, all of that we look at? So that they know and we know, is this viable, you don’t want to take a company to the markets if they’re not ready. And that’s our job in analyzing all of that with our team, and then our team can see yes, it’s doable as well. But at the end of the day, the client, the company still has to execute what they said they could do in the clinical trials. Still, they may be already there, or if they’re ready to commercialize, then it’s like rock and roll, get that product to market and get everyone to know obviously a commercialized company is easier than maybe one that has to step stone to clinical trials or 510 Ks, but it’s totally worth it. Because they may have something there that is so life-changing, life-altering that the risk is worth it and no risk, no reward. So our goal is to show them all those steps under that strategy. What does it look like? What does capital cash flow projections look like? Meaning, what are we going to invest to bring in the capital? What does it look like? All of that is our job to oversee and help the client manage that is a tough road if you’re trying to manage it all by yourself. And you don’t have the background in doing such a team effort to get that client through CPS, if it’s doable. But that’s the first thing we look at is due diligence materials to see it. Is it doable? Is there something here?


Peter Daneyko 22:45

Doing that deep dive? And as you said, Are they ready? And and? And what are the stepping stones? And that made me just think a little bit because we’re getting some getting an interesting interest, are you finding firms that that might just need that. And I’ll make an analogy as to, you know, a seed round and a Series A and a B and a C, let’s say somebody needs that seed round, and there were these $5 million Reg CF ‘s that are now available. And people used to think that that was only available on a funding platform, and it wasn’t for them. And now the fact that you can actually take advantage of, you know, raise that seed capital of say $5 million to help you maybe hit some milestones with your company or use those funds to, to actually help you with the Reg A offering, you know, for the larger offering. Because now you can control that journey. And the journey of the investors coming to your website, for example. And not going else outside of your website for Reg CF, you know, in a $5 million raise. Are you getting any commentary on that? Are you hearing anything about that direction, Stephen?


Stephen Brock 23:55

People, founders, CEOs, CFOs, ask about it, because they’re learning about it. We present the information with our team so that they can learn more about it. And then our team will get more involved in that CF piece. Because to us that’s a stepping stone to a Regulation A plus if they need it to be. And those are decisions made during discovery calls. And so knowing what direction should they go? Can they afford to execute a Regulation A-plus because of other rounds that they’ve done? Or is CF, the better placement? And those types of things have come up? Rarely, because we have marketed the Regulation A plus very heavily but CF has become more of an ask on how does it work? So it’s another training piece and another pass off, so to speak, to some of our team members who do CF like Rialto, like KoreConX like we all do, because that’s their author their market space. And then the potential client, the founder, the person learning can use it as a stepping stone to get more capital, because 5 million is not going to execute the bigger raise, oh, no need for milestones to hit.


Peter Daneyko 25:19

Yeah, it’s, it’s, as you say, it’s just it is it is a potential stepping stone for the right. For the right environment for the right place. And now we’re seeing it outside of that, and I was looking at the med tech space, too. And I think it may be, it may be a little bit more rare. But I think perhaps for the depends depending on where that entrepreneur that company is today to say, Hey, I just need to go here, but I want to do a Reg A there may be a bridge, a bridge there. Because we’re seeing some interesting successes in that outside in the marketplace, in general, you know, but at the end of the day, you need a lot of capital. And the fact that you can raise 75 million with the Reg A every 12 months, Reg A plus is it there’s a lot of meat on the bones to, you know, to get your company launched, you know, to get to those next milestone. So, those are big numbers. And I don’t know, if a lot of people are aware of the fact that, you know, we just assume because we live and breath that you can raise $75 million every 12 months. And there’s some other interesting attributes to it. And I know that in the on Wednesday, on the KoreSummit, it’s four-hour sessions of talking to the various intermediaries and stakeholders, and they’re going to share with all the pieces to the puzzle, and what it takes, you know, to build a team that, that you and Medical funding professional quarterbacks, for example, you know, from auditors, to broker-dealers, etc. And just strategizing things on their offering in a Reg A and maybe we can just touch a little bit on, on on a Reg A plus some of the interesting things that you can do, I know that the legal guys are gonna get into that more in depth on Wednesday. But from your perspective, you know, we hear terms like rolling closes, we heard terms about selling shareholders, you want to touch on some of that with me right now?


Stephen Brock 27:11

Rolling closes, what happens is as a company is raising their capital, once they’ve been allowed to go to market and launch, they can with the broker dealers involvement, break escrow every month, every couple of months. If that’s what you’re referring to in rolling closes, because that’s how I see it is the escrow funds come in. Then let allow them to bring in those funds to keep executing their business plan in using Regulation A plus, because there’s more advertising necessary, there’s more investor acquisition necessary. And that’s really the majority of what it takes to execute that a plus, once they’re out there is the marketing spend the ad spend. So they can have a rolling close, where, let’s say every 500,000 that comes in or whatever x is, the broker dealer will break that for him and deposit into their account so they can keep going and have those funds available to be used. And then secondarily, as a tool for some of the shareholders that have been around for a long time, they may be able to have some of the monetizations of their shares occur, they can be in what’s called selling shareholders piece of the filing. So maybe they have 100,000 shares and 10,000 of their shares may be sold into the marketplace after so much money has been raised by the company. And they get to take some of their shares off the table, so to speak, and pass them on to others. But it’s also a great tool for the company to think in terms of okay, how do I get a bridge round done. Offering the prospective investor how they could use the selling shareholder piece as a way to have a return on their investment part of it early on helps the company show a direction in funding the A plus, so they can execute as well. The tool on selling shareholders, white papers available about that, as well as rolling closes neat tool that you can keep you don’t have to wait till the raise closes, which is nice. You can be keeping those funds in also shown in presentation format. How does this all work? Which again, is the goal of C PBS is teach, train, educate and show a way to get to the end zone with respect to whatever x is up to $75 million a year.


Peter Daneyko 29:42

Oh, and I you know, is that education again, you know, we keep talking about the education and what you guys are doing in the education. It’s so vital, and it’s so necessary. I talk to lawyers every day and I talk to security lawyers every day. And what surprises me is there Still learning and becoming more educated on it. They said, I didn’t know that selling shareholders was up to 30% of your raise that you mean, what does that really mean? You mean, if I raised $20 million $6 million, it can go to the existing selling shareholders. And it’s allocated fairly. And it provides the liquidity vehicle, and it’s amazing. They go, why, you know, I’m living in a world of many historical regulations. And they’re not that they’re historical, and they have a good purpose and a place, but they’re just not unfamiliar with, let’s say, a Reg A offering. So we talk to companies now, and I think that’s amazing, the whole concept of selling shareholders, I mean, everybody says, you know, what is the liquidity, you know, side of things. So there are so many different benefits, I think, from a Reg A you can go after the public at large, you have the opportunity for selling shareholders, we tied to


Stephen Brock 30:52

The alternative trading system as well, after the end of the close to that’s kind of fun. 


Peter Daneyko 30:58

That’s a great jumping off, point it is nascent, but the vehicles exist now. So if I’m an investor, and I’m saying, I’m looking at, you know, I’m looking at a Reg A offering, for example, Reg A plus, and say, you know, what are the liquidity vehicles? Well, ATS is they’re, they’re early, but they exist in their power, powerful way. We’ve got some companies, you know, basically putting themselves on the ATS now, just for the liquidity for that investment community that wants to buy their shares. It’s as simple as that. And that didn’t exist before. And there are companies, you know, heavily engaged in that now. And, I think that’s just going to give more trust and confidence in the investor community to say, Hey, I’ve got more vehicles. You know, it is the end all be all. What’s your take on it going public today, Stephen? 


Stephen Brock 31:49

The going public model will always work at its different points in time that works like last year worked well. Right now it’s not working well. So going public is something so many people always love to be able to pull off what’s really special in the medtech environment is the mergers and acquisitions availability. So there might be a better way to have these companies have liquidity events as an m&a opportunity versus an IPO opportunity. But those are all decisions made as you get milestones accomplished. If you’re a commercialize what’s the markets, like big run was spacs. Been around the spacs for 25 years? was interesting to watch how many people were doing them. But there’s a lot of companies in the med-tech space as well. Not that many, but the ones something that we had talked to and they went back and said, you get crushed? Because the what happens in spacs markets. So big decision making, are we looking for m&a? Are we looking for IPO? The key is, don’t worry about all of that right to second worry about executing so you can get to market as a company. And as a private company, more companies are staying private because of other options out there. VCs are looking at Regulation A plus more than they used to as RPE and others. Because at least from what we see, there’s more stability. If you go out and $6 a share. As an example, for Regulation A plus it’s not going to be 550 at the end of the race, because there’s no market forces battering you at this time. So when you do get to the ATS alternative trading system, are people going to sell their shares for less than $6 a share? Sure, maybe some will, because they need the money. I don’t see that as heavy as a public company. And retail investor, any investor having some shares sold. So I think all those steps from the selling shareholder to the founders round to the ATS to what’s the end, the goal of getting bought out. I’m in a there’s great examples using pitch books as a way to run up against valuation on what evaluation looks like in a CPS presentation versus what is pitch book had to say today, even versus compared to a year ago, changed in some respects dramatically. So being able to follow all that is very, very helpful. And I think when you look at the price points Regulation A plus, you have a little bit more stability there than the way the market forces are right now. So IPO m&a, I think those are the two main pieces, but you can also, once you’ve finished your first raise after 12 months, go back to Regulation A plus and do it again the next year if you need to. No reason to have those major liquidity events out of the gate unless it’s available to you from an M&A perspective, which comes from all the marketing advertising outreach that the client needs to do to raise that capital using investor acquisition, so you get a twofer. You’re being noted by all the major players across the globe, if you’re marketing correctly, as well as selling shares, as well as increasing the potential of commercialized products being sold into the marketplace or being bought by the people that need those products. And that’s very special to get so much from that advertising marketing dollar. From a share selling perspective, to M&A perspective to a commercialization perspective,


Peter Daneyko 35:45

I think a lot of people, even myself, forget about that. Sometimes you’re looking at raising capital, you’re saying, hey, I want to raise $50 million, or something on the raise, and you and you’re doing this marketing spin, because people, you know, the issuers gotta say, Okay, how do I do this? What’s the team I need? I need investor acquisition firms, I need some sort of marketing outreach, and they’re looking at it just to raise the capital. But there’s so much more than that. You’re not just raising the capital. You’re building that investor base that are your brand advocates that are your future customers. And it’s that coffee table conversation that they’re going to have with somebody else, their friend, or the neighbor said, hey, you know, I just put a couple thousand dollars in this thing, and I think it’s pretty good. What do you think? So you have that viral component that I think sometimes we forget about, we’re just thinking of the raise. And, and not thinking of the marketing, the marketing.


Stephen Brock 36:41

And the story and the outreach and the presentation to all the different players that are out there that need to know this company exists, because it’s life altering, life changing. And that might be a space that they want to be in as an investor, or as a VC firm, or as a private equity, or even as ETF. I mean, it’s, there’s so many things, in fact, why would that be so cool to have an ETF for? The Regulation A plus? That’d be fun.


Peter Daneyko 37:11

Yeah, no, no, exactly. And the brand side of it, again, I keep, I keep thinking of the brand awareness, the brand advocates we talked about, this wasn’t in the med-tech space. But when you hear the first unicorn come out a billion-dollar, you know, company that started with the crowd, you know, a couple of guys in the, in the, in the beer business, I mean, nobody would have wanted to touch these young guys for their final. And those are true stories. Today, and I think there’s going to be more of those, you know, in, lots of businesses and industries. And I think the, med-tech space is, is just nascent. And it’s just waiting to understand and be educated even more on this. And again, I don’t have to go any further than, you know, family members that that, that hear what’s going on out there. And they’re saying like, I, I like this, you know, there’s good things that are going on. And, again, the fact that they can participate. And it’s it’s pretty compelling. But on that note, it does take a team. So maybe we can spend the last few minutes here just talking about the team, the teams that are involved. We talked about, you know, at the start, they need somebody to do they do what you do, they need the quarterback, they need that capital, and it’s probably the most important thing, you have to do the planning, the planning upfront, and you’ve got is it the right time? How do you do your valuations? But once we get past that, and you get into what’s some of the next steps that I know they’re going to talk more on Wednesday, but what are some of the next steps from there, Stephen?


Stephen Brock 38:46

Well be with the presentation from Capital Planning valuation strategy, it shows the team recommended to execute it’s a top-flight group of people. And so they get to meet those people in that call. And afterwards, because more deep dive is healthy and helpful for the potential client. And that’s where they get to know the people involved. So you’re having a team of people do what their skill sets have been developed over 20, 25, 30 years, is really special to a company that may not know what’s around the corner, and this group can help them see what’s around the corner. And that way, they’ll have fewer mistakes. You always have Murphy’s Law and get anything done. So that’s life and making sure you have a wall in front of you, and then you just have to break through it if something gets in the way. But the audits are incredibly important and having a good auditor that knows what they’re doing. The patents being valued and looked at being able to file with the SEC and having a good filing agent. Know how to execute that from a building the document perspective having to foundational legal looked at. And what does that mean? Well, make sure that whatever you’ve done, maybe you haven’t filed your form D as an example, to the SEC on the capital you raised over the last five years. And sometimes, people just forget that they needed to do that. Our job as a quarterback is to ensure that all our team members execute their skill sets for that client. And so that client can have some baseline, that’d be much more comfortable that he’s he or she’s got the pros, helping them get this project accomplished and completed. And so quarterbacking, that being able to have that team of people that work together, all the time is very, very beneficial to the client. Because they know that if they pick up a phone call, or send an email, we’re all getting copied or raw call on each other. Hey, did you get this accomplished? That way, you can also speed up the results to get into the market as well, from a Regulation A or CF perspective. So that team is very, very important to us. And we have been blessed with the fact that they are all the best in their business. And we enjoy that they help ensure that the client always comes first. Also, the fact that so many team members have just fixed rates. In many deals, people will charge extra hourly rates. And that can get really crushing for a smaller company. And if it’s done right at the get-go, meaning you hire somebody that’s done this, been there done this, and it’s a flat rate fee, you have yourself also some more understood costs, with respect to getting to that A plus finalization. But it’s a big decision. So if you’re going to make a big decision that is in the multimillion dollar world of raising capital, do it with knowing everything you can. Study it, get a presentation built so that you aren’t just you know, throwing something up against the wall, look at it, get the details, study the work that’s been done. And then you now can see why this team might be a lot better than some other team, or there’s no team at all. Not having the team is a mistake. Not having somebody that knows how to do all these pieces is a mistake in my belief. So we think ours is the best. And we like showing that by having a presentation for the community with respect to their particular business model. And then we can show them, what does it look like with this team executing? When can we get it done? And what’s the potential of bringing that capital into the company? 


Peter Daneyko 42:54

100%, it keeps coming back to two, there’s a lot of parts here you touched on, you know, you need a good auditor, you know, you need the quarterback to make sure that the planning, structuring the deal upfront is the timing right? You need a broker-dealer, what is the broker-dealer do in this case, the broker-dealer is like your insurance. You know, for the most part, and I’m talking, talking to broker-dealers that are doing, you know, the KYC, and the ID and the AML to verify the individual investors, you know, for your offering theirs like an insurance policy for, you know, for the issuer? Because sometimes I hear the comment, well, why do I need to I the way to legally need certain services? Yeah, there are a lot of things you can do by yourself. But I wouldn’t, you know, for us a medical metaphor, I’m not going to operate on myself either, because, you know, I might be a podiatrist and might have something else going on with my heart. 


Stephen Brock 43:49

But yeah, the primary broker-dealer is really important, as well. And that’s, of course, part of the team have been able to have the research done by life science, intelligence is very important to the team because they do a lot of deep dives on that industry and can do it on the company. And that’s very helpful to be able to present the message to the world of what’s going on in the industry. What’s the addressable market, there’s so much that should really be reviewed and looked at, as you want to present to the world of what you’re doing. And that comes from all these different slices that we have in the group. And that’s certainly very special being able to see, okay, some people are just stunned that digital raises even available. Some people, especially early on, would say, How is this real? This can’t be real. It’s too good to be true. And I would just I know, it’s so great. Finally, they deregulated the capital market so that retail investors, and smaller businesses can actually tap the capital markets like the big boys and possibly build their balance sheet so that everybody can have a higher lift with respect to the markets. So it’s a lot of want to hear that and then it’s a lot of fun to be able to educate that it’s real. And that’s all because of the Jobs Act, because of David weild, working so hard to get that done, and then being able to present that to the, to this country to Canada to the world. Here’s an another way that just wasn’t available years ago. And so it’s it really can help bootstrap up the company or the country even more, if it was more understood more used, and allowed people to get that executed as easy as possible, which KoreConX does in their digital Ray’s presentation, which is so cool, always has been cool to be able to watch. So that team is critical to success, if you’re gonna have success, have a team, get it done.


Peter Daneyko 45:49

I couldn’t have said it better. We’re the Hub and Spoke kind of company where the technology facilitator, but we have to work with all of the different intermediaries. So we have the opportunity to learn and, more importantly, have the utmost respect for all the intermediaries and their role. And when companies speak to us and say, Hey, why do I need? Why do we need, you know, why do I need this? Or can I do my filing myself, or can I do my auditor? Again, I keep coming back to say, you know, take a step back, take a deep breath and plan and do it right and respect the specialists in their fields. At least you’re gonna go into your res, you know, as knowledgeable as possible. And you’re going to have a, you know, a much better chance to, to achieve what you want to achieve or hit it out of the park. You talked about Murphy’s Law. And that was a good analogy earlier to say, Hey, you got to expect things to go wrong. And if you plan properly, when things do go wrong, you can easily recover. And you can pick it up if you have the team that’s you know, that can execute in the future for you. Kind of want to close a note, as we’re kind of hitting on towards the hour here. And I was you mentioned the Jobs Act. And I never want to forget the term the Jobs Act, because a lot of people don’t really know that the jobs act. It was all about jobs in every single company that raises capital, what do they do with that capital, they create jobs. And at the end of the day, if we’re creating jobs, the economy is going to grow. And it all starts with access to capital and these regulations on that are going to be discussed in more detail with with all the stakeholders in the intermediaries on Wednesday afternoon. I think there’s a lot to offer. There’s sessions on, you know, from the auditor, from the broker-dealer from, you know, what’s, what’s involved in filing requirements? What forms do I fill-in? And how long does it take? So all of those questions get addressed on Wednesday. 


Stephen Brock 47:48

I cant thank President Obama enough for signing this legislation. Without his pen, this would not exist without David Wield gathering up all those senators and congresspeople to get this legislation passed, which was heavily signed on to by everyone is just fantastic. And I think that legislative period, deeply for what they’ve allowed this country and Canada to be able to use. And I hope that they will keep raising the amounts available to be raised. And also make sure that they allow this execution of the regulations to be even more widely understood and known about so that people can keep building their business models and build their balance sheets.


Peter Daneyko 48:35

You said that so well. And I think that’s a great way to end it. And I do think you predicted some things in the future that it’s going to be 100 million-plus and then don’t be surprised, and then in the very near future, as far as what a company can raise, and that’s going to even open up more doors for more different types of companies that need that kind of capital. But for now, it’s just a great journey to be part of all of this with companies like yourself, Steven, and I’m really, really proud to be part of an ecosystem that, you know, really wants to raise capital and really wants to help entrepreneurs out there. So, on that, I’m going to close up the session. And looking forward to our next visit.


Stephen Brock 49:18

You’re a great host Peter, thank you very much. Take care,


Peter Daneyko 49:21

Stephen. Thank you. Have a great day.

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