What Do You Need for a RegCF Offering


Oscar Jofre

CEO and Co-Founder


Oscar Jofre

CEO and Co-Founder

Oscar is currently one of the Top 10 Global Thought Leaders in Equity Crowdfunding, a Top 5 Fintech Influencer, Top 10 Blockchain and a Top 50 InsureTech. He has published an eBook that has been downloaded in over 20 countries, and been distributed by partners worldwide. Oscar is a featured speaker on Fintech, regulated, equity crowdfunding, compliance, shareholder management, investor relations, and transparency in the USA, Australia, UK, Germany, France, Netherlands, Canada, Singapore, Indonesia and China. He speaks to audiences covering alternative finance, RegTech, insurance, banking, legal, and crowdfunding. Oscar also advises the world’s leading research, accounting, law firms and insurance companies on the impact Fintech, RegTech, LegalTech, InsurTech and OrgTech is having in their business.

Jonathon Whaley

Chief Compliance Officer


Jonathon Whaley

Chief Compliance Officer

Since graduation from Ave Maria School of Law in 2012 I have successfully guided BeManaged through ten external audits, including a routine examination conducted by the Securities and Exchange Commission. I have demonstrated an ability to establish and refine a strong culture of compliance within the parameters established by SEC rules and regulations for Investment Advisers. BeManaged promoted me to CCO in 2014 for my commitment to the culture of compliance embraced by the firm and my dedication to the well being of BeManaged's clients. I supplemented my education by completing a year long, intensive compliance program with National Regulatory Services and was designated an Investment Adviser Certified Compliance Professional in 2013. Additionally, I completed the Claritas Investment Training program with the CFA institute in 2014. Most recently I passed the Series 65 Investment Exam through FINRA for Registered Investment Advisers. Throughout my educational career, at both Ave Maria and the University of Dayton, I demonstrated great ability to balance the rigors of full-time academia and work success. Achieving honors at both Universities, I also managed a full-time work schedule including the operation of two businesses.

Julien Phipps



Julien Phipps


Chief Revenue Officer with over 20 years of SMB, Enterprise Sales and Management experience in the US, Canada, UK and Ireland in technology (SaaS) and Financial Industries. From start up, to Fortune 500 and hyper-growth enterprise companies, I create, cultivate successful company cultures and lead teams that contribute to desired revenue growth. I'm responsible for all revenue-related strategies globally. I lead Business Development, Sales, Account Management, Sales Operations, Strategic Partnerships and Marketing activities. I believe in giving back and through philanthropic endeavours throughout my career, I've given my time and expertise to grow the operations of The Canada One Foundation and KitsFest. As a senior advisor to the board, our foundation has had a positive impact on our local community. Over $1.2M in post-secondary grants and nearly $800K in social legacy projects that continue to benefit our young leaders and our communities.

Oscar Jofre  00:16

All right, perfect. It’s 11:30am on Tuesday, no Thursday. Oh my god, where has the week gone by? Right Welcome everyone, to the course summit, you know, webinar series 2021. And it’s going to be pretty fun today, we have some great speakers. First of all, I’m just gonna give everybody the format. So everybody knows how this is done. And you can follow us. First of all, we’re going to have the speakers introduce the panelists already introduce themselves a little bit, so you get to know who they are, we’re gonna have a bit of a q&a, no PowerPoint presentation, none of that. We’re here to talk with you to give you real life examples to help you with the topic today, which is what do you need, you know, for to prepare for a regulation, CF regulation, crowdfunding. And so this is important. So we’ll do 45 minutes. And then of course, we will walk going to the next phase, which is 15 minutes of q&a that gives you an opportunity, put up your hand, click the button and ask the panelist any questions, and we will be more than happy to answer for you. For all those in attendance today, you will be able to get a copy of our book, equity crowdfunding one on one, which will be available for you that gives you all this coverage. But let’s get started this morning. Thank you again. And it is on YouTube live as well. And obviously all of this will be available all over the web. So it is being recorded for everyone’s pleasure. So let’s get started with the introduction of our thought leader panel. I say so Jonathan, it’s great. Well, it’s great to connect with you and me with you. There we go. Let’s start with you.


Jonathon Whaley  02:03

Thank you very much. Yeah. Thanks for having me. And I look forward to hopefully providing some information. My name is Jonathan, I’m the compliance manager for wonder fund. Wonderful is a regulation crowdfunding portal out of Cincinnati, Ohio, we launched in 2017. So we’re going on we’re approaching our third year of doing crowdfunding here. And our focus really has been kind of what we’re calling the underserved markets. So you know, the Midwest, predominantly in terms of geography, and into the southeast, but especially minority groups like LGBTQ, the T next African American, female phone lead businesses. So we’ve done I think we’re up to our we’re about to launch our 31st or 32nd. campaign. So we’ve worked with just over 30 businesses right now, to get their crowdfunding campaigns up and going.


Oscar Jofre  03:01

Well, that’s fantastic. I will definitely be coming back to you with more question, Jonathan. And obviously, Julian, my colleague.


Julien Phipps  03:09

Yeah, thank you, Oscar. And thanks, Jonathan, as well for joining us too. I am the chief Revenue Officer for cork connects. And it’s been a pleasure to obviously join this team. But we’re very excited. We’ve got lots in store, obviously, for our revenue growth of our own in at core connects, but more importantly, today is learning a little bit more about the regulations and how they apply and sharing some some thoughts and as well as questions my background that come from the banking industry, over 10 years of my first decade of my career in banking. The second is been the second decade was at various FinTech firms. Most recently, one of one of which I was very proud to be at was a startup in the AI and ml machine learning industry. And there I was leading head of sales for Canada, and helped that company achieve an exit as well, of nearly half a billion dollars. So hoping to recreate that magic here with cork. Nice. Thanks for having me.


Oscar Jofre  04:17

Okay, unexpected. But okay, let’s get started. So let’s put the format in perspective. For all of those who have not attended any of our core summits or cooking exits, we have a very strong philosophy and education, no self promotion, so I do apologize if it did seem that way. It wasn’t intended. Julian’s new to the team. So I always try to make sure that for you, the attendees that are you know, Jonathan’s taking the time we’re all taking the time because we want to help you we we truly do outside of whatever else we’re doing. The JOBS Act was created for you. So I’m going to give you kind of a brief overview of that, and we’re going to dive in, because having somebody from the compliance side is really good at this stage of the game, because quite often what you hear about About regulation CF, and you’ve seen this, Jonathan, I’m sure is that, Oh, it’s so easy. You just go there and fill out the form. and away you go. So um, so let’s start with a high level. So the the JOBS Act was created in a way to help early stage companies or any stage companies, it wasn’t just for startups. And it wasn’t just for any particular, you know, technology. It could be anything A to Zed, as Jonathan alluded to there, there are different spectrums of it. So but in order to take advantage of these regulations, that’s why we’re going to talk today is that you need to follow what are the things prerequisites that you need to follow? And so the first one, obviously, I’m going to get at is, you know, the, where can you raise the capital. So that’s the stage one, and then we’ll dig in, because that will help you. So stage one is that the only place where you can raise a reg CF capital is on a register funding portal, like what Jonathan is going to talk about, or working with a registered FINRA broker dealer. So this is the new addition to this ecosystem that is going to help everyone guard multiple choices. So I don’t want it doesn’t matter, you still need to prepare. So let’s hear from a funding portal first, just high level, you know, what not high level john, I mean, in detail, what is it outside of the sector, but more the prerequisite compliance elements that people often just go? Oh, yeah, I just got to get that compliance stuff. And, you know, and I mean, let’s dig into that. Okay, yeah. So I think,


Jonathon Whaley  06:41

then, maybe we’ll touch on on literally the types of companies that are ready to raise money. But if you are someone who is ready to launch a crowdfunding campaign, some of the hurdles that we run into is, first off your internal legal documents. And so one of the things that we see a lot of is when you’re raising money, through crowdfunding, it’s an investment. And so you’re technically selling a security. It’s an unregistered security. And so that’s why you do not need to go through the SEC for it. But you do still need to provide notice. And you still need to make sure that those securities are sold in a way that’s compliant, not only with securities laws, but also within your internal policies. So we see a lot of companies that come to us and say, you know, we’d like to raise $200,000, how do we go? And the first thing I ask for is, Can I see your operating documents, so I can understand what your cap table and everything looks like? Because it’s important that you are classifying your shares in terms of what you want to maintain for you as a founder and owner, and then what you’re willing to give up to maybe preferred investors or common shares, and all that needs to be detailed in your documents, primarily, because you’re hopefully your goal is to exit at some point. And if those ducks aren’t in a line from the very beginning, you’re going to have huge issues down the line when you’re looking for, you know, five to $10 million investments. And so that’s one of the big things is operating documents.


Oscar Jofre  08:18

That’s a great point. Can I just, you know, you touched on something that you know, it we often like you go through all the elements like you’re starting, I’m glad you’re starting from the point of falling your form, seeing what are the points and thank you for that. But one area that I think people here need to hear the whole thing about the cap table, a lot of people don’t odd, I don’t need to worry about that. Because it is so imperative, right, you’re noticing that if people don’t properly plan for that understand what their legal structure is, it will delay you getting to become listed on a funding portal or even, you know, or anybody working with you. So what are the things that you’re noticing or that you’ve seen? That could be kind of a guidance to companies regarding just the simple component of the cap table?


Jonathon Whaley  09:06

Yeah, so, you know, fortunately, a lot of companies that do crowdfunding are new. And so they don’t necessarily have a cap table beyond, you know, there’s two of us. And so we’re 50 50% owners. And so that’s great. But the two things you really need to consider is one, if that is you if you’re a new company, and so technically, you’re just your sole owner, or maybe there’s only two or three of you on the team, you still need to define the class of shares that you own, and what you’re willing to offer in an investment opportunity. And the reason being is down the line now, because if crowdfunding, you’re going to get, you know, a couple, you know, 10s to maybe hundreds of investors, and those investors are going to have rights and you need to define those rights on your cap table. Before you can even offer make an offering. But the second one is, you know, I we have one company who came to us and wanted to raise money. And I asked for their cap table. And they had, you know, listed three names of the greater than 10% owners. And then there was a couple 100, other, you know, just minor owner, minor, minor, minor owner, minor owner. And it, we just, we could not launch their campaign because we need to know who those minor owners are because they have rights, and we need to make sure that their rights are defined. And if you, if you aren’t managing your cap table properly, especially not just before the launch, which can delay the launch, if you haven’t identified what classes you’re willing to offer. But after the launch, you have legal obligations to all of those people who’ve invested in your company. And if you’re not managing that properly, and only does that, you know, not bode well for future rounds, raised capital raises for you, but it opens up to legal issues as well. Because, you know, if you know, do something that’s not within the rights of those investors, and they come back and say, Hey, you know, you said these were our rights, but you’re not doing it this way. Well, now you have legal obligations that you’re in trouble with.


Oscar Jofre  11:04

You know, it’s funny in every one of the sessions we’ve done in time, the capital, oh, yeah, you need a cap table, let’s go to the next subject matter. But it is so critical that companies understand why it’s so important, not only for what you’re doing now, and ongoing, and obviously, it encompasses everything, it kind of tells you how much preparation a company needs to do. So one of the things that, you know, all that distributed in is that, I often find it that when people think of crowdfunding, I don’t need to do anything, it’s like Kickstarter, I just put my stuff out there. And, but it’s still you’re raising capital from the crowd, you know, from people, this is people’s money, you have a fiduciary duty to that. And there are so whether you’re just starting off, that doesn’t mean you get a pass or not learning or you need to learn so. So the cap table is one of it. And I call this the corporate bucket, right, the corporate items that you need, the cap table being one critical item, obviously, Joe, Julian, you and I, we deal with a lot of companies that come to us, what do I need? What do I need in order to get prepared? And obviously, we’ve give them the checklist of all these items, and Jonathan will go even deeper. But obviously, what are the things the cap table from the corporate side that this company need in order to prepare properly for a reg CF?


Julien Phipps  12:30

Yeah, so so to prepare, there’s a there’s, you know, obviously a lot of details, we’re gonna get through a lot of them today. But yeah, Jonathan touched on a great one, a great point for this being very valid, and a very important part of their their issue. But there’s other things that they’ll need to prepare, they’ll need to prepare in terms of, you know, getting ready to to file their, their form, right. So the that’s sometimes, you know, obviously done with the help of a securities lawyer. There’s many different details we can get into the unit, did we have one specific that we wanted to go through Oscar?


Oscar Jofre  13:06

Not really, other than just, it’s not so much a Pacific, it’s just making sure that the audience understands that the captain was part of the corporate part. So what is the corporate part? Well, the corporate part is the medical. So if you are working with legal counsel, or maybe you don’t, when you go to a funding portal, you’ve got a BD, they’re going to ask you for this, they’re going to say, Hey, listen, you know, do you have the following things ready? Do you have your corporate records and people are going to what is that? Well, we need to see your bylaws, we need to see your Articles of Incorporation. We need to see your information. So why is that important? Because we need to know if you can even issue the securities. Do you know it? You’ve we’ve seen this so many times. So you know, people go out, I’m ready to go you the company may be ready to go from a marketing perspective. But are you ready to go from a corporate? And I think Jonathan touched on it really interesting there. It will delay your deal. It will delay like filing the form see is one thing, but the people that are helping you follow it need to view the information. This is the part that people often miss out on this is that those that you’re relying usually lawyers or the funding portals, they need to see this information. So it becomes extremely important to view this. So the so obviously, Jonathan, you know from the corporate side, is there anything so we talked the cap table, the you know, the bylaws incorporated? What are the things from a funding portal? Are you looking at their you’re necessary before a company can actually list on your platform?


Jonathon Whaley  14:41

Yeah, the other big one that we find causes some delays is financials. So you know that there’s a current rule. Originally it was 107,000 you needed to CPA review. If you’re raising more than that it’s currently through February. Anything under 250,000 you can get away with without a CPA. Review. But if you are trying to raise more than $250,000 know that you need a CPA review of your company’s financials in order to file a crowdfunding campaign. And even in addition, if you’re not raising, if you’re raising less than $250,000, you’ll still need company financials, like, that’s still information that you need to file that is going to be on a part of your form C and a part of the disclosures that you need to make. And so that’s one of the things that we find a lot of companies don’t have an order is their financials, and especially in order and in a way that makes it look, you know, it’s organized, and people can understand it, because the reason you need to file financials, is that something investors look at and say, you know, is this company viable? Are they in trouble financially. And so that’s the other big piece, we find that, like, I know, I have a company right now that I have their ppm and everything ready to go. But we’ve been waiting for about two and a half weeks to launch their campaign because they haven’t gotten me their financials for 2020 yet. So that’s the other big piece that we see people delay their campaigns because of,


Oscar Jofre  16:09

yes, it becomes an important piece in today’s market. And this doesn’t mean, this is not to scare off the early stage come? Well, I don’t have any finance. I mean, there’s nothing no, it’s it’s not whether you have anything there or not, is that you need to get used to the practice of producing them. Because if you don’t, you’re neglecting your next element, which is, you know, we’re talking about what you need to prepare, there’s going to be another session done. I mean, we have 71 more webinars coming up. And they’re all in different stages. Whatever you’re doing here, trust me, we’re just preparing you for what you need to do there. Because otherwise, your reg CF, you know, raise will be one time not like others where they do it multiple times. And we can give you the examples of those who do it over and over again. Why? Because they’re prepared for the audience. Think about it, it’s your money, somebody wants you to invest in their company, are you just going to give it to them? Without looking into the details, seeing what’s there? And they don’t need to be audited? Right. I mean, Jonathan, I mean, for reg CF, there is no audited financials. But you need to be prepared. And preparation is critical in determining, you know, what you need to do in order to file your form see with the the regulators, and to also understand what you know, the requirements are. So these are all the little pieces that we talked about the corporate now you understand about financials. Now, there are accounting firms? I’ll add this part. Obviously, I’ll ask you, Jonathan. So there are accounting firms out there that will work with reg CF companies, they know exactly what you need there. Their mind is in there. And they’re there to help you. Johnson, are you finding the same with? We’re in the funding world portal, that you have some partners that can help companies in that journey?


Jonathon Whaley  18:03

Yeah, absolutely. On both sides, so we, you know, we talked, we talked about the cap table, there’s definitely some great cap table management groups out there. And then yes, from an accounting standpoint, we’ve we found that a lot of companies that have come to us with prior, you know, prior accountant, most of them can get connected through there. But we’re definitely seeing, especially now that the crowdfunding is starting to take off a little bit, there’s more accounting firms dedicating, recognizing that this is, you know, for them a quick and easy way to provide the accounting services that a startup needs. And, you know, still get what they need on the other side. So it’s starting to take off a little bit more to


Oscar Jofre  18:48

I was just gonna say that it, we’re now talking more about it in depth, because everyone that’s here, the regulation is increasing up to $5 million. I assure you that investors going to, you know, before raising 50,000 100,000, it would, there was, you know, there wasn’t that much there was still the due diligence needed, but between one in 5 million, you’ve stepped into a different realm. This is a very different realm. It’ll probably be a different type of investor, the accredited investor can now invest. I mean, this is a big win for everyone. The accredited investor can invest in an unlimited amount without going through all that accreditation you come in and that individual isn’t going to just say, Oh, just because it’s reg CF. I don’t you’re going to expect the as you pointed out, Jonathan, those elements, so obviously, you know, Julian, you’re listening. I know you’re taking your legal components as well. So we’ve talked about the corporate we’ve talked about the cap table component part of it, the books, the audit. And you know, obviously, again, coming back to the other elements that the company He needs in order to prepare for their offering, again, before they even go live. Look, we were still just that at the start line.


Julien Phipps  20:09

Right. Yeah. So. So yeah, in addition to what we spoken about, I mean, one other component that we found a lot of times when working with companies, is the financial due diligence. Right. So ensuring that their financial statements have been audited, you know, as we mentioned, but also ensuring that the they’ve got an understanding of them, what what are the projected revenues, you know, the costs of internal costs in their companies, and the profits, you know, in terms of the cash flow and balance state, all of these have to be reviewed. And, and obviously, you know, in some cases with different regs audited as well. So, that’s, that’s definitely a point that, you know, a lot, oftentimes, we’re business owners are looking for additional support if they don’t have an in house. And I would imagine the other aspects that that really stand out are ensuring to have like a business plan ready, making sure that your company is got the full list of of, you know, a concrete business bond that, you know, some of your investors want to review. So these these things are critical, and you know, assuring the crowd out there that you’ve got, you know, your your T’s crossed, and your dyes, your I’s dotted.


Oscar Jofre  21:29

Yeah, I mean, I, I’ll actually, I’ll get you to step in on this one for Jonathan. But I just want to be very clear. For those listening, you go, Wait a minute, I thought you didn’t need audited, you do not need audited financial statements. You you need them prepared for an accounting firm. Notice the reader know that. But you need to understand this is the path you’re walking into your the likelihood that you’ll need more capital, eventually, you’re preparing your financial statements in a route that will get you to a better audit. That’s number one. Business Plan. A business plan is not mandated to provide to an investor that is not with it’s for people like Jonathan, who needs to know what your you know why? Because the funding pool is taking on the liability here. They’re representing you to the investor base, they need to show them they’ve done their homework. And it doesn’t have to be like 100 page business plan. Maybe the business plan is two pages. It is what it is. That’s it. There’s not sometimes it’s, as you said, it was a startup. Right, Jonathan, you probably I mean, you asked me for that, or an executive summary from companies.


Jonathon Whaley  22:32

Yeah, we always require a business plan. And like, specifically, a part of the business plan is the use of funds, which is a required filing. But it’s exactly what both of you have been saying. So far, the thing we try to make our issuers understand is you have to approach this as if you were an investor. So if you were investing in this company, what would you want to see? And so if you’re raising $200,000, if I’m going to make an investment in your company, I’m going to want to know what you’re doing with the money that I’m investing. And so that’s where a strong business plan and that use of funds saying, here’s what we’re going to do with the money we raised to this campaign is important. Because it instills confidence in the investor that says this is a business that, you know, they have a plan, they know what they’re going to do with the money. And so if I can help them get that money, everything’s going to be good to go. And so yeah, absolutely. Business Plan and use the funds as our priority, especially for like the public facing side of the campaign.


Oscar Jofre  23:33

Oh, you know what? It’s, hey, it’s amazing humping it. I’m glad we’re bringing this up to everybody. So you’re, again, you’re hearing it firsthand. So go through that checklist. Again, it’s in the book equity crowdfunding one on one, but you’re hearing it, be ready, be prepared. Look, we’re not trying to scare you off. I keep saying this to you. Because I want you to just keep putting the back of your mind. You’re becoming intrapreneurs. This is an early stage way to do it. It’s made, it’s made the regulations on the job side was to make it as simple as possible for you. But the responsibilities do not change. And as you increase the capital raise, believe me, it will, you need to start getting ready for this. We don’t want to sugarcoat it for you. We want to give you the truth, because otherwise, you’re going to get slammed with it. You’re going to walk through the door, and you’re gonna go up well, but I read it that it was so easy. It’s, you know, it is if you’re prepared. So got that the financials, we’ve got the corporate records, the business plan of critical items. There’s lots of templates out there. Very simple guides, most of the funding board is I’m sure. I don’t know, Jonathan, do you guys provide any guide on what the business plan should have from a framework or anything like that?


Jonathon Whaley  24:41

Yeah, we’ll provide examples. We don’t have like templates out there. But if a company comes to us, and they say, hey, I need help writing a business plan, we have plenty of examples we’ll be willing to provide.


Oscar Jofre  24:52

That’s perfect. That’s perfect. So that’s the business plan. So now let’s walk into the part. Obviously, every one of you that it’s here, I want To raise my money, come on, I want to get my money going. Okay, well, now we got to talk about the term sheet. So, you know, this is the one that’s a little trickier. This one in brixia, you need to think about it, right? But you need to have a starting point, meaning, you need to know what you’re starting with. So, obviously, this is important. You know, we’re, we’ve experienced it firsthand, not ourselves. We haven’t done a race yet, but we’ve seen it from our clients. And Julian, you’ve been working with a few of them, that are struggling to try to figure out what model they should use. But there’s some considerations companies need to put that in perspective.


Julien Phipps  25:40

Yeah, it’s, it’s in mind, you know, I’m learning to space as well. And so it’s, it’s, it’s an area that I’m, you know, obviously actively understanding it better and better. But I think that, you know, from the term sheet perspective, it’s, it’s really getting the idea of what the offering is. Right. And so it’s, it’s really, you know, listing that out, having having a good description of what the offering will will entail. And really, it’s one of the areas that I think it’s it’s more important to very, to be very precise, like, very descriptive and what what’s being put forward to the offering, right. I mean, it which aspects in terms of Jonathan, I think maybe might be able to add some color to that area as well.


Jonathon Whaley  26:34

Yeah, the term sheet and echoing what I said earlier, there are plenty of examples of term sheets out there, you can even go to anyone raising a crowdfunding campaign right now, and you know, look at their term sheets. But if you’ve raised money through a vehicle that is in crowdfunding, you know that when you reach out to a VC or an angel group, the first thing they say to you is, Alright, let me see the term sheet, we’ll go from there. So you know, investors on a large scale, the term sheet is the most important thing for them. And, and that doesn’t change at the crowdfunding scale either. Especially because now that accredited investors can or you know, have unlimited investment options in the crowdfunding space, you’re going to get some bigger fish. And that means that your term sheet is going to be really important. So one, going back to what we talked about earlier, understanding what you can offer, which is based on you know, your internal operating bylaws, so that your terms that you whatever you’re offering common shares, or preferred shares, or whatever it is fit within what you can offer based upon what you’ve already established. And then secondly, very clearly defining what the you know, minimum investment is what the you know, what each share class gets, you know, a summary so that people can understand what each share class means. The what, like what the maximum and minimum offering of the entire offering is, so you’re trying to raise a minimum of 150, a maximum of 500,000, like, just all the basic details, and honestly, that’s kind of where you should start you’re building your campaign out is, you know, here’s how much we want to raise and how we’re going to do it, you do it with we want, you know, $100, investors, a bunch of $100 investors, or we want to get some bigger fish. So the minimum investment is $1,000. Those are the kinds of things you want to understand. And building out that term sheet, either, if it’s just you, as a sole practitioner, with your team, is a great way to kind of go about that process. And understand, here’s what we want to offer, and building your term sheets, the best way to do it, and you know, that investors are going to look at that term sheet and the back end.


Julien Phipps  28:47

Yeah, that’s a good point. I also found to like, one of the areas that I see a lot for even on the investor side is understanding the restrictions, if there are well, right, so, you know, if you’re making the investment and just being educated, I guess on on the transferability of them, if there’s a you know, any period that might be your investment might be locked up for So, so get diving into those details are important, not only from the issuer side of things, but also the investor side. And I guess, you know, just like you mentioned the minimum maximum maturity, you know, when it comes to maturity, they things like that, it also just, you know, clarify things on both ends of the equation.


Oscar Jofre  29:32

Yeah, they do. There is another element in reg CF that people need to be aware of that is, in particular, in the United States. There is the 2000 shareholder rule. So the regulation CF did come up with an exemption to make sure that companies stay within that environment. So this is really important. So, for those of you who are listening, you you know, the funding portal, as I said, there, you can go to a funding portal to raise your capital and they may Have a very set structure. Do you know there are certain portals that only do safes, there are some that are do revenue share. So you need to make sure that fits in line with you where the broker dealer may have more flexibility. But it’s not going to change this choice, this choice is an important one that you need to make. And this is part of your journey of capital raising, you need to think about how much money you’re going to need throughout the journey of you till you say I only need a million dollars, and this is what the billion dollar company, it’s realistically, you have to really understand how much capital you’re going to need to maybe two, three years. Because this structure here, it’s going to make a big impact. Because when you do a regulation CF, if you offer shares, and those shares are they exceed over 2000 shareholders, you’d now trigger rule 12 G. And if you trigger that rule, then you are a full reporting issue or like a public company. And as there’s not enough money in reg CF for you to maintain that. But the regulator’s have given you a way to alleviate that. So part of the term sheet is that you can put them in a safe, that’s one or you can put in a special purpose vehicle number two, so there are legal structures that you can follow, you can put them in shares. And we do recommend that to certain companies, only if you’re going to be doing a reggae right afterwards. So that’s the other thing. So as they say, knowing the journey that you’re taking, it’s important for the funding portal to know, or the broker dealer to know, but you got to have the framework of your terms, and they will guide you as this is not going to work. Right. So this is the part that makes regulation CF a little bit more interesting is that you need to keep that in the back of your mind. Why? Because let’s say you are raising a million dollars, and you want to give everybody an opportunity to invest, like some funding pool does have a minimum of $50. Well, actually I’ve seen as low as $10. So you divide $10 into a million, how many shareholders is that? And that’s a number you have to deal with. So right there, it’s definitely over 2000. So now you need to figure out a way what is the legal structure that is being utilized? So I don’t break the rule. And I can maintain to go forward? So I’m going to put this on you, Jonathan, I don’t know what approach you guys are taking your funding portal? Are you offering a kind of build your own? Or do you have a set structure that you say, okay, you want to raise your money for reg CF, this is the structured so investors understand what they’re getting?


Jonathon Whaley  32:47

Yeah, I would say it’s kind of in the middle. It’s like a guidance build URL. So we found that most of the companies that come to us don’t have a tremendous amount of understanding of what a capital raise entails. And so and i will say we’re somewhat unique in this strategy, and that I will kind of work with you to figure it out a campaign strategy that works well with what you want to do. Whereas there’s definitely some portals out there that just say you’re either doing a raise like this, or you’re not, you’re gonna have to go somewhere else to raise. But to echo what asker said, I need to know what you want to do with your money. And so you know, if a safe note is best for you, I will help you design a safe note based offering. If it’s a debt instrument, if you want to use a convertible note or some other sort of revenue sharing agreement, I can help you design that, but only if you tell me what you want. First, if you want to just be equity, again, we can help you design that. But we need to know what the parameters of your equity offering are. And so that’s kind of its, I can help you design whatever you want your campaign to be, which is one of the beauties of the reg CF is that you have different pathways to raise the money. But if you don’t understand how, like the impacts of each of the different types of investment vehicles, and what you want to do with the money, just like Oscar said, you know, this is just the first step, you know, a crowdfunding campaign, we usually try to say you want to raise about 18 months of runway, so a year and a half. That’s it. And so you want to be prepared not only to use that year and a half of runway, but then people to be ready for that next step. And so if you come to me and you don’t know what you just say, I just want, I just need $500,000 I can’t help you. There’s nothing I can do to help you at that point. You need to understand what the structure of this raise is going to look like in order for me to design your campaign for you.


Oscar Jofre  34:52

That’s that’s a great point, Jonathan. It’s, um, you’re probably one of the unique there’s not many portals that allow that flexibility for intrapreneurs. Because as I said, you know, there are certain ones, what doesn’t matter what dollar amount, this is the instrument. And there’s a reason for it, they, they’ve trained the audience, so it makes it easier, but the company needs to understand what effect that has on their cap table meaning, even though whether the investor has equity or a safe or or SPV, you still need to treat them like a shareholder, you still have a fiduciary duty to report to them. And you need to budget for those kinds of things, which most in the past did not. But I assure you going forward, the SEC would be looking at all of us a little bit harder. So this is the new generation or regulation CF. So structuring your term sheet, so don’t worry so much about what the quarters are doing, or anything like that you do have choices. But creating your term sheet is critical. And not only for this race, but as I said, What is your total journey of your capital race, because it will determine so much what you can do here in the front, that starting point, because everything will predicate that going forward. You know, we’ve dealt with companies that have done a reg CF raised a million dollars, in immediately closing that they do a reggae to raise $50 million. And it’s a very smooth transition, very smooth, meaning the crowd safe holders, I mean, the safe holders are happy, they’re going to be converted to shares, the new ones are coming in. And the company’s you know, it’s got 3040 50,000 100,000 shareholders, it’s you know, and we’ll get into that another part. We don’t want to call them shareholders, because they’re more than that. But for this discussion, we’re trying to get you prepared. And so I want to spend the next part. So we talked about the corporate, we talked about due diligence, we talked about the term sheet, we talked about financial statements, another part. So I’m gonna put you on the spot, Jonathan, and it and that is are you also from a funding perspective? Are you putting your marketing engine behind it? Or are you the the the companies themselves the issue? are they bringing that marketing? Or is a combination about? Yeah,


Jonathon Whaley  37:18

I’m really glad you brought this up, because that is definitely our unique feature is so our founder, is he spent 17 years at Procter and Gamble, doing marketing. And so he came to this from a marketing perspective. And that’s how we kind of treat crowdfunding is obviously it’s a vehicle for you to raise investment funds. But it’s a marketing, that’s what it is, it is marketing. And you are finding, like I said, you may be dozens of investors to hundreds of investors, but you’re also touching hundreds more individuals for you’re just presenting your product to. And so, one thing we do want to fund is we provide marketing help. That being said, especially since this is discussion of what you need to have prepared, we need companies to unlock that first 20 to 25% of the investment. And so if a company comes to us, and they want to raise $100,000, our very first question from the marketing side is will do you have $20,000 of investment Ready to go? Not necessarily ready to go. But do you have friends and family who are interested in investing once this is live, because if your mom and your brother and your friends aren’t going to put in 20% of the campaign, we can’t then bring in the 80% that’s leftover. And so we will turn on a marketing vehicle. Using whatever is best, you know, SEO, Facebook ads, we you know, before COVID, we were doing live presentations to help you drive this. But that only happens if you bring us you know, an email list of petite people you think might be invested in. If you say yeah, I’ve got five or six people lined up right away day one, they’re going to put in a couple $1,000. Because you know, if someone comes to the website, and they say you’re trying to raise $500,000, and you have $1,000 of investment, they’re not going to they’re not going to pay attention to your campaign you’re not interested in what’s great is another change in the rules that we really appreciate. That’ll help this is the testing the water change that just came about. So that we’re putting in some procedures for testing the water that will allow you to reach out to people and say, Hey, I might be raising money through a crowdfunding campaign, would you be interested? And that’s something that we need the issuers to do themselves build out that email list. So that day one, when your campaign goes live, we can email 500 people and say, Hey, you said you’re interested. Let’s go. Yeah.


Julien Phipps  39:51

Yeah, I was just gonna say right here is that Yeah, we generally have that similar notion of 25 30% rule of having that capital set. To say ready for, you know, the race. And so yeah, I think you’re gonna say the same.


Oscar Jofre  40:05

No, yeah, I was just going to, I’m glad to hear it because people need to be reminded that capital raising requires working with COVID-19. Look, look how we’re holding these events. Do you know core connects, we’ve been doing core summits now for the last year. And some we pivoted online to bring education, to reach an audience to educate 510 20 100, it doesn’t matter the point is one at a time to give you the tools that you need. So you’re prepared. So it same thing you’re going to need to do to reach out to do advertising. And I’m glad to hear this because people go, oh, here’s a new funding portal, the other ones don’t do it. I guarantee you, they all do. In fact, some of them are very specific given to the dollar amount. And so that just tells you even the most mature platforms, we found the republic’s even the ones who’ve been up there for the last four or five years, each one of them require you to hit a certain threshold before they’ll get behind it. So what what Jonathan’s team is doing is no different. And, again, it’s like everything we’ve always said, it’s everybody working together, you got to bring in your first crowd, when you read this book, the equity crowdfunding one on one, you’re going to see it, it talks about your first crowd, who’s your first crowd, the people, you’re ready. Now, if they really love your product, you got to bring it to the table. And you’ve got to because that’s how it all works, right? It works. This way, you’re going to be successful when you can. It’s not about hoarding or anything either, or that you’re giving away something you’re not you’re trying to get something and let the professionals help you to get your capital raise. So this has been very important, going through that list and making sure that so we got the corporate defined in the corporate getting your mini book ready, even if you’re a new startup, they’ll give you a whole bunch of records, you’ll have your cap table in there. And there are cap Table Tools, which will make you available, of course, and we’ll let Jonathan know about that as well, financial diligence, you know, making sure that even though you need audited financial statements, you understand the fact that you need to have them structured by an account and understand what they mean. And getting the business plan and working with Jonathan or any any advisor to give you the basics of it to putting that together, and then working on your term sheet. Right? And putting together what you feel is not just for this round, but all future around. And then of course, your marketing budget for that properly. Okay, so we’re gonna the budget is something that we’re getting asked a lot now it, it came out the other day, Oscar, you know, how much money should we be budgeting? And that’s a great question. So, you know, the legals, I will tell you right now, the lawyers are going to charge anywhere between 3500 to $5,000. You know, and they’re looking to build a relationship with you. Some of them need some of the funding portals do it. I don’t want to put you on the spot, Jonathan. But does your company offer that? Or are you off sending it to a lawyer?


Jonathon Whaley  43:08

So yeah, we do some of the legal work. So I draft the private pilot, the ppm and we do the form, see filing, we do take power of attorney in order to do like the Edgar filings. But we will not design your operating agreements. If you’re doing an SPV, we will not set up the SPV for you. So there’s some legal work that we can do for you. But you’re still probably going to want to find an attorney, especially for down the road. You know, like you said, they’re building a relationship with you. So they’re probably willing to put in the work and you only charge you 3000 to 5000, like Oscar said, to do like that legwork hoping that down the road when you’re raising 1015 even up the words of $50 million. You know, that’s when they’re going to get some more fees. And you’re definitely going to need a legal attorney at that point.


Oscar Jofre  44:01

It is a great point. I mean, we’re breaking it down and people go Okay, Oscar, what’s from a percentage, you know, it’s anywhere between 15 to 18 20%. That’s realistic. And with COVID-19. I would import that money I just need to all of you here that are listening in. Most of the money is marketing. It’s not going to be legal. So it’s not going to be accounting is getting the eyeballs the attention to an audience to come in. And the same thing is for any other regulation, trust me, I mean, regulation CF is no different than others. The funding portals do have registered uses, but again, listen carefully to what you are getting into is that they’re telling you that you need to come in for the first part. So you’re going to need to spend it already have it to make it work for everyone. So the budget is going to be a variable. It’s going to be different for every type of company. But if you budget you know, a million dollars, okay, go you know, you’re going to spend between 15 to 20% overall legal accounting, getting your business plan on social media, all of that, including the very set of first set of investors do, and this is no different than raising money, the traditional method, whether you go through LinkedIn or some sort of angel group or anything like that there’s always going to be a cost of raising capital along the way. So sorry, Jonathan.


Jonathon Whaley  45:21

Yeah. And we actually have we there was a really good study. By camp. I think it’s capital, HCA capitalization Association of America, that they just put out. And so the they found that for $100,000, you can expect a total budget for the campaign. And this covers marketing, legal, everything of about $5,000. The average campaign, which was 225,000, you can expect a cost of about $12,000. So right, we’re asking, you’re saying and then I’ve worked for companies that raised a million dollars, they had a budget of about $56,000, to get the campaign launched. So yeah, at a minimum, you’re going to want to have at least about $5,000 in capital available to pay to get the campaign launched. And then like, as I said, it’s variable depending on where you go from there.


Oscar Jofre  46:16

That’s perfect. Thank you, Jonathan. Alright, so as we said, 45 minutes we talk, you hear us speak, we give you an opportunity here now to put up your hand. And it looks like Terence has got a question for us. So thanks, we’re going to turn it on. So you can ask you a question. Oh, you’re on terrorists. Good morning. Thank



you so much for the information. I’d like to know how do we connect to your company, if we want to engage your companies to help us put this together?


Oscar Jofre  46:50

So Jonathan, did you hear that clearly?


Jonathon Whaley  46:53

Was there? That’s Yeah, that’s for me. So you can go to our website, Wonder fund that CEO, you know, don’t type that extra, just that CEO. And you can we have FAQs on there. And there’s a there’s a cipher investors and aside for issuers, so as an issuer, you can go in and indicate that you’re interested in we’ll kind of we have a little pre due diligence process where you can kind of give us some of the information about your company and what you’re looking to do. You can also email me, it’s Jonathan, how it’s spelled there, Jalen at h o. n, at wonder fund.co. And you can just say, Hey, I’m interested in getting some more information about becoming an issue where


Oscar Jofre  47:38

just Perfect, thank you, Jonathan, are there any other questions, there’s a few people there, just all you got to do is click the raise hand if you have questions. So we’ll, I’ll be keeping an eye there. But I will also be bringing up some other elements of, you know, preparation for your regulation, crowdfunding. So one of the things that obviously, you’re going to be spending money, and you’re going to be spending money with a lot of different partners, as you choose your partners, whether it’s the funding portal, the lawyers, the auditors, the marketing firms, and all that. This is your first crowd, including your existing shareholders, your family members, your advisors, employees, everybody, this is your first crowd, you’re gonna if you’re walking into this journey, you need to understand the power of the crowd. If they’re not behind you, I assure you, it’s going to get even tougher for you on the other side. So make sure that that inner crowd you have is going to be there supporting you, bringing it forward to make sure you have a successful raise. That’s the key to all of it, marketing can thrive on that if you have customers, even if it’s one that can be the if you have an advisor or you have an existing shareholder that’s willing to put their name out there and support you and be you know, you’re saying this, and they’re saying that as well, it’s going to be part of it. So you have some other soft items that often is not talked about, because we just talked about preparation, regulatory and all that. But one of the things I firmly believe in and when I’ve seen the success is those who understand how to harness the crowd will be more successful down the down the line and doing their capital raising, bringing that first crowd is everything. You were going to say something joining in Sorry about that.


Julien Phipps  49:20

Yeah, no worries. Yeah, I was actually going to go back to an earlier point that we touched on at a high level is that all of this is is really geared towards the journey that the company the issue is going to be on right and the more that it can be complete, the more that it you know, can can be, you know, well thought out and planned. And that also translates to I would say, what we’re seeing is is really investor confidence in the offering. You know, as the space also has been maturing, you know, the investors also mature and those those investors that are, you know, successfully investing in the right types of companies and seeing the opportunities are the ones that are prepared and really done their due diligence through all these steps. So, so definitely encourage, you know, everybody to really, you know, put that effort behind that because that that, you know, in addition to your your great products and services and solutions that you’re offering to the market is is, you know, that complete package. Right. The The, the last point I’ll make on that is also the communication aspect. So really, you know, being proactive rather than, you know, reactive with your, your, your potential investors and shareholders. It just promotes that sense of well, being near nurturing that those that have invested in your company. So that’s a few thoughts there.


Oscar Jofre  50:42

Yeah, we’re adding a little bit more to it, talking a little bit about the shareholder part it is there are going to be some webinars that are going to be very specific about the crowd itself. How do you nurture it, why most companies don’t even call them shareholders. I mean, that’s kind of a teaser for you there, because we believe that this is a journey. And you’re going to start this journey the right way. It’s meant to help any stage of company we’ve seen it, look in the in the last four years, there have been over almost nearly 3000 companies that you are now coming into 3000. So that’s great successes there. they’ve raised, you know, almost a billion dollars in capital, they’ve created jobs. And we’ve seen companies raise $50,000, and they’ve been able to get their business going. Others have raised a million dollars and a whole bunch in between. So what is important, though, is that we recognize that all of them came prepared responsibly, which is what we’re trying to help you here today. So I’m alright. So I’m just going to reach out one more time. If the any of the attendees have any questions. Don’t be shy. There is no any particular question that may help you with your reg CF. One thing I will tell you is don’t worry, we’ll be reaching out to you, you’ll have the contact details for Jonathan as well. We will make available to you the the book on equity crowdfunding one on one to assist you with your capital race so you can become successful and understanding it. The more prepared you are, the more successful you will become. And that is really our entire goal. I want to thank Jonathan this afternoon. Thank you so much. It’s great to finally meet you. And God, looking forward to learning more about what you guys are doing a wonderful one. And then of course, my colleague, God gentlemen, fibs. So from all of us. If you are going to join us, we have another webinar at 330. This afternoon. If you’re not already registered, this is part of our series. The next one is why everyone benefits for regulations. Yeah, so this is, again, these are bits and pieces. All all of it is around you got to understand this to the theory behind and it’s working. It’s finally working. Six years ago, seven years ago, eight years ago, we were talking about it like it theoretical today. It’s practical, we can give you the examples. You can see it. It starts here and then it just keeps moving forward. So have a great week. We hope to see you again soon. And thank you very much for everyone’s time. Take care.


Jonathon Whaley  53:13

Thank you very much.

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