How Entrepreneurs can Leverage Opportunities in the Private Capital Market
We sat down to have an absolutely intriguing discussion with Oscar Jofre (Co-Founder, President/CEO, KoreConX) on this week’s episode. In our conversation, Oscar pulled back the curtain on the world of the private equity market and talked to us about how the current situation is one of the most empowering, transformational and pivotal periods for tech companies and entrepreneurs. He also goes to explain the misconceptions that people have about private equity, what entrepreneurs need to be mindful of, and how it’s paramount to continuously improve and quickly adapt to changing marketing dynamics.
Topics discussed in this episode:
How critical it is for entrepreneurs to understand how to leverage and manage their shareholders and customers when they raise private capital. [41:18]
Companies & links mentioned in this episode:
Christian Klepp, Oscar Jofre
Christian Klepp 00:08
Hi, and welcome to the B2B Marketers on a Mission podcast. I’m your host Christian Klepp, and one of the founders of EINBLICK Consulting. Our goal is to share inspirational stories, tips and insights from b2b marketers, digital entrepreneurs, and industry experts that will help you think differently, succeed and scale your business.
Christian Klepp 00:29
Okay, ladies and gentlemen, welcome to this episode of the B2B Marketers on a Mission podcast. I’m your host, Christian Klepp. And today I’d like to welcome a guest on to the show who is one of the top 10 global thought leaders in equity crowdfunding. He’s also a top 5 Fintech influencer, a published author, and a featured speaker on topics ranging from FinTech to compliance, investor relations to transparency. So Mr. Oscar Jofre, welcome to the show.
Oscar Jofre 00:58
Thank you, Christian. Appreciate it.
Christian Klepp 01:00
All right. It’s really great to connect with you again, Oscar, and I’m really looking forward to this conversation. So you know, let’s just get the ball rolling here. And, you know, give us a little bit of background and tell us about yourself.
Oscar Jofre 01:11
Great, thank you. And, yes, let’s have some fun because we are in the modern radio, right? So they can’t see me, but I can see you. So like most entrepreneurs, my journeys… Well, there are no two journeys the same. But I have been an entrepreneur for over 30 years now, happy to say that I’ve enjoyed the journey tremendously. I think I’ve enjoyed the downs, more than the ups sometimes as weird as that may sound, but you learn more through that process. And, you know, my mission has not changed since the very first time I got behind the, you know, being on my own as an entrepreneur. And when I say being on my own meaning, I decided not to be, you know, working for someone else, rather than building something with myself and some colleagues. So yeah, it’s been a fun ride, and enjoying it.
Christian Klepp 02:10
Amazing. Amazing, you know, and I’m sure we’ll have plenty more to talk about as we as we progress, but um, yeah, Oscar, we talked about this last time, but like, you know, talk to us about a recent project that you’ve been working on, that’s gotten you really excited. And you know, clearly, this has been an exciting year, to say the least.
Oscar Jofre 02:27
Yes, I mean, for us, it may seem like we’re just starting today. But like any journey… until, you know, it takes a bit of time until people start recognizing the hard work that’s gone into it. So I’m not going to mislead anybody that what’s happening today, the success we’re having is because of today, it’s because of the work that we’ve done in the last 10 years. So this journey, this current opportunity that we’re working on today, started over 10 years ago, and probably a bit longer than that, because bits and pieces have come from other opportunities I’ve done. And we, back then 10 years ago, we, you know, I had the opportunity of meeting a very transformative individual that really changed my view in to what was about to happen in the private markets on a global scale. And then 10 years ago, you know, we didn’t have the technologies we have today that we’re talking about it, we didn’t have the… people didn’t have the vision of that 10 years ago, but here we are. And you know, for us, it’s like anything else, when people are waking up to it, and they’re saying, Oh, it’s now needed, we’re already here, we’re already deployed. So it’s been really exciting. We believe that the private markets today are about to go through one of the probably the most empowerment in history. And that is that everybody’s funny looking inside of it. And saying, hey, there’s something here. Why haven’t we looked at it deep enough, and we are happy to be one of the participants.
Christian Klepp 04:16
Yeah, that’s amazing. And, you know, you brought up such a great point about like, you know, one of the most empowering and transformational or pivotal moments in history, most specifically for your industry. But we’ll talk about that a little bit later on. Oscar, you’re the co-founder, and the President and CEO of a company called KoreConX. So this company is like a first of its kind, all-in-one platform. It combines tools that securely and efficiently manage business data, and it also helps to facilitate compliance for private companies. So, you spoke about it a little bit just a few minutes ago, but tell us about how you got started on this journey and some of the challenges that you faced early on in the piece.
Oscar Jofre 05:01
Yeah, perfect. So when KoreConX is they said 10 years ago when the… it was already bubbling up understanding what was about to happen, keeping in mind that our background came from the public world. So we kinda had an idea how public markets were formed and how distribution works and all the participants. So in the private, I think most of us walk around with a very narrow view, like a racehorse in a racetrack. And we think that’s the only thing that exists. So as we, as the market was to be, you know, as I say completely, I’m going to use it for the first time, disrupted, as it has with the new regulations, it opened up something that most people really couldn’t see at that time. So 10 years, or even, 6, 8 years ago, when we first started publishing information on it, most people couldn’t see the problem. Even though we painted it, we put pretty colors around it, we had experts talking about it, they couldn’t visualize, and that’s just human nature. Human nature tells you that you know, it, the problem doesn’t exist, how can you be telling me about this… I’m not there, yet. They’re so caught up on what they’re doing at this very moment that they can’t see the next step. And you can’t blame any of them. So the hurdles that we ran into in the early days of introduction of KoreConX wasn’t that the opportunity was faulty, or that the platform then deliver what is promised to be, it’s that most people couldn’t see the problem that they were about to come to head with, when they started their process. And so that was then.
Oscar Jofre 06:44
Today, the reality is much different. We now have evidence we can point them to any type of company from A to Z of any size. And you as an entrepreneur can put yourself in the driver’s seat and say, well, that can’t be me. So that’s going to happen to me, yes, that’s going to happen to you. You know, when the rules, the new rules came into play, about 5 years ago, people still didn’t believe that they could actually raise the money now they can. Now they again, they didn’t understand what would come next. So it’s, I think the biggest issue we dealt with is that people were comfortable doing things the way they did previously, without understanding that you’ve been given this gift to democratize capital, and all sudden, you’re still operating old school. But that shift is moving so rapidly now. And with COVID-19, that just been accelerated tremendously. So the KoreConX all-in-one platform is true, one of a kind in the market, and it combines all the things a company needs to manage its business from a sea level, onward and upward. Sorry.
Oscar Jofre 07:56
And that’s something you know, people don’t realize that in a company, yes, you got your accounting tools, your CRM and all that. That’s all operational. But now you need to have to manage the board of directors, the shareholders, the lawyers, the auditors, now I need to raise capital. All of those things are done externally. They’re done sporadically via email. And this is the most confidential information a company has. And so in the past, we didn’t worry too much about it, because companies were not distributing this information too widely, or the shareholder basis were maybe 5 or 10. Well, now we got companies with shareholder basis of 5,000, 10,000. How about 100,000? How about a million? Everything changes. So that’s what we were telling people 10 years ago, people are like, Nah… Today? People go… “Okay, I’m waking up. I’m there. I got it. I know, I see how this is gonna solve my problems.”
Christian Klepp 08:51
Right. I mean, thanks for sharing that. I mean, those are some pretty incredible and interesting points that you raised. And I think one of them being if I understood you correctly, is do you find yourself in your line of work having to educate a lot of the customers about like you said, the democratization of the capital markets and, you know, getting people to understand how it works?
Oscar Jofre 09:18
Yeah, it’s there. I mean, educating the market is just as important as anything else. Right? Why? How does it work? And what’s the benefit? I mean, any company that comes to us, we’re purely a platform, we’re not consultants, we’re not advisors. You have the ability to use this platform, and to connect you with all the things you need in the most efficient, cost effective way possible. So you can be successful in your race, but like any, any CEO, you’re fixated. I need to raise my money. And so we try to make sure that out there we put the education through our partners. Our ecosystem to make sure that these companies understand that what is it that you’re stepping into? So what is it that… what is this democratization of capital? So people treat it… look at that, I got a new rule, we can raise more money. Now, what is it? What is what is behind it? What made the regulators, what made politicians, what made everyone get behind it? So once you get behind that, you start to understand what is the transformation that’s occurring and the disruption. And in particularly in the United States, what they did extremely well with, obviously, the Father of the JOBS Act, the former vice chairman of NASDAQ, Mr. David Weild, who is also happens to be one of our advisors in our company. He drove that, he became that pivotal point in history where, you know, by having the US change their rules, every other country around the world became a domino effect. So make no mistake, you know, the US changes of the JOBS Act became everywhere.
Oscar Jofre 10:56
So what is the JOBS Act? What are what are those rules? And you don’t need to get into the legal of it. But you just need to understand why, why, why, why was to create jobs, to create jobs, create jobs, so companies are complaining, they need access capital, so they can create jobs. Okay, so now you’ve been given this gift to give to, you know, the, the owners of companies, after the 2008 financial crash, were complaining because they lost everything, but the bankers made all the money. So now, you get to retain control of the ownership. And then of course, we needed to democratize capital to allow everyday American 233 millions of them, and then not just them, but globally to invest. And so now you’ve been given this gift, but that gift comes with massive responsibilities that you need to understand what you’re undertaking.
Oscar Jofre 11:45
It’s one thing saying, Okay, I’ll raise, you know, $10,000 from my friends and associates, okay, these are people that know you. But what if you’re raising $75 million from people, $100 a shot. So you now have 75,000 people that are…don’t know you. They love your vision, and they’re there. So how are you going to approach this? So that’s why the regulations are important. They drive it. But people on the other side, you have to be as cognizant as why they were created and how it makes a big difference in your company. And then of course, that’s part of the ongoing journey of any entrepreneur. You got to keep learning and understanding, so you can grow your business.
Christian Klepp 12:30
Yeah, no, that’s exactly. That’s exactly it. Those are those are definitely incredible insights, which leads me to my next point, Oscar. I mean, you spoke about this at length during our last conversation, and I think it was such an important piece to, most specifically with, what’s been going on, especially within this year. I mean, you know, like many companies in different sectors, you went into this year with a plan, that’s clearly seen some changes due to the ongoing pandemic. But as I mentioned, in our last conversation, you mentioned that these changes have been very positive, for the most part for your business. And in fact, if I remember you correctly, you said that the pandemic has been a catalyst to get people online, and it’s helped multiple industries, not just yours, multiple industries to reset, or reboot. And this is a reboot that we haven’t seen in a while. So could you talk to us about that a little bit?
Oscar Jofre 13:29
Sure. So, you know, the one thing that we’re going to see this come around that we have not seen in in a long time is that we become complacent. We, as a business society, we love technology. It’s been great. But, you know, how many times do people go to people’s office on the go? You do know, there’s a tool to make you more efficient? And yeah, yeah. But I’m so used to doing it this way. Right? And so, you know, when people are still doing email, you know, there’s a problem because it really isn’t an efficient tool.
Oscar Jofre 14:06
So what needed to happen happen, and nobody could predicted it, but here we are. With COVID-19. So COVID-19, on the start of it, most people were at shock. First, the reaction was all this will go away. I’ll be back at the office and so on. Here we are. We’re getting near the end of 2020. None of us are going back to the office. Most of us have either shut down or found a way to… everybody’s distributed. Yeah, that’s right, distributed, not remote. Distributed. And you become more… you find ways to work efficiently and find all the cracks within your environment in your business. So that’s one effect.
Oscar Jofre 14:50
I think the bigger effect is that I make the analogy to what happened in 1999 December 31 at 12:01am. And this is just kind of the same issue that with COVID, you couldn’t have predicted. But you knew that if there was ever going to be a time, you know, people will tell you, but what if, what if you can’t come to the office? Wouldn’t it be better if people were, you know, people would not listen, there was a no, no, no, you know, Christian and I will still have coffee, we’ll both do this. And, you know, Christian wants to do it that way. Christian has no desire to go online. So now, you know, December 31, 12:01, boom, the computers go off, they go back on, you know, 70% of the world come back on. Everybody smiling. Oh, look at that. So what was that? They were prepared, they were prepared. And then out of that 70%, you know, 20-30% are new entrants. They weren’t just prepared, they’re coming in with a whole new way of doing things, knowing that the old system… so it created, and then the 30% died. And those 30% were complaining, oh, yeah, my business died because of 2000. Your Business did not die because of 2000, your business died, because you fail to plan and you failed to be actually paying attention to what the market was telling you. You were too busy, or you felt that you were too busy taking care of business, but you actually weren’t. You were still stuck in your old ways. And in fact, the failure if you could have pivoted immediately, knowing that there was something was wrong, change the chip, get a new computer or something, but you did it. You chose to really dwell on it. So did that make us weaker as an industry? No one made us stronger. But now we become complacent ever since. Yes, we’ve had great paradigm shifts with social media and all that. We’re more online, we have the mobile device. But, the reality is, we’re still doing things old school, everybody has an example of a government or a bank or some sort of formal institution. You go, you can still operate this way, really? So think about all those times you’ve said that, and now COVID-19 strikes.
Oscar Jofre 16:56
The COVID-19 strikes. And once again, we’re in the same situation, we’re going to be in the 70/30. And the 30% that will fail. Yes, some will truly fail because of COVID-19. Because of the social distancing. And for those, I regrettably feel horrible. But at the same time, I don’t think it’s over for them, because we are seeing companies that are pivoting and saying, Okay, you know what, they can’t come to me, I’ll go to them. There’s always another way. It’s just how you process, but for other service providers, like an insurance and banking, capital markets, M&A, any of those financial professional services in the sector that were in providing those, if you have not done so you should be out. And that’s exactly what this is doing.
Oscar Jofre 17:42
So, and then in the stats that are now coming out, it’s demonstrating just that. So the first six months of this year, compared to last year, which 2019 was a great year, but 2020, the first six months was a 280% increase online for online investing. Now, why is that so important to understand, the increase is paramount. It’s remarkable because of COVID-19. But it goes to show you that people wanted to keep investing, but not only that, they’re investing online. So now that they’ve gotten used to that, so Harry comes back and say COVID is over, let’s get together for coffee. I have a deal. Yeah. Don’t you have an online place? No, no, no, you can email me your driver’s license, your passport will still do. No, no, no, you know what, I want to do it this way. It’s more efficient. I can track everything, I can see exactly where it’s at. I’m not in the dark. See, there. This is what’s materializing. So it is a reset. It’s a great reset. We need it. And what it’s going to do, it’s going to remove layers in every… If everybody knows law firms, you go into some of the big law firms, their foyer is 10,000 square feet. Look at them now. They’re empty, because the lawyers are working from home. So efficiency is what we needed. We’ve been fat for too long. And ultimately, who pays for that fat, the clients. And who pays those clients, the investors. So you got to follow the money, the money comes down to… so this is going to make us all more efficient, it’s going to provide a better way and because of it that we become connected in this way, there is going to be better accountability and transparency and moving forward. But more importantly, I think now, because COVID is with us for at least another year. There’s no going back. There’s no going back just like in 1999 moving to 2000. There’s no going back. That old computer just throw it in the bucket. Let’s get a new one. Let’s move on.
Christian Klepp 19:43
Yeah. No, those are some really awesome insights. I mean, you know, you hit so many nails on the head. I mean, that was an incredible stat that 200… What was it you said 200% increase in online investing?
Oscar Jofre 19:55
280% increase in the first six months of 2020 over last year.
Christian Klepp 20:00
Wow, that’s wild.
Oscar Jofre 20:02
That’s it right there. It is the evidence. I mean, I’ve spoken to some colleagues in the insurance industry. They’re seeing a massive increase. But not only that, they’re seeing that their clients want to log in somewhere and manage their… So we’ve been making excuses. Human beings make excuses for other people. Right? They got all… again, all Oscar, my clients prefer to meet me face to face, they don’t want to be logging in anywhere. Really? So do they have a mobile device? Yes, of course. Well, they got a logged into for that. And, you know, they got an email, they gotta log into that. So, you know, their logic doesn’t make any sense. What it is, is that they feel that this is the way to control the relationship. And so, you know, it’s time to say goodbye. It’s part of nature, as they say.
Christian Klepp 20:56
Exactly. And I think, you know, you brought so many points that were a great reflection of the current reality. And I think one of the buzz words for this year is just disruption. I mean, this crisis has disrupted a lot of industries, and it’s moved a lot of people online, thankfully, especially in the spaces like B2B, finance, I mean, all these things that were long overdue, and, you know, it took a crisis to get people to like, shift. Right?
Oscar Jofre 21:26
100%. Yes, the realities is that everybody now realizes this should happen before. It couldn’t happen. I mean, there are jobs in a company where, you know, I’m not picking on any company, but I’m sure everybody can reflect on this is that, you know, everybody’s got an assistant, I mean, what does that assistant do? To book your appointment. Seriously? You know, you can use Calendly, you can use online calendars, where people can automatically schedule a meeting with you. And it’s really, really quickly. So there, there is a shift. Now, I do feel bad. Part of me feels bad that there are certain people that are going to be you know, it’s going to disrupt their lives. But there is an opportunity as well. This is going to… for that individual that didn’t get the opportunity, they were stuck in that position. And now they can, they know the space, and they know the tools, make no mistake, all those individuals that were in charge of doing all the legwork, and using the tools, you are in big demand now, you are the one in demand, not the other person that you took care of. In fact, that’s old school. Those individuals can’t be on boarded onto a company. I look at our onboarding here at KoreConX. I mean, we’re pretty fortunate. We’re in a technology space. But you know, with COVID-19, what is the most important attribute of any one person that comes in joins our team? It’s communication. We’re not monitoring whether you’re sitting at your desk from eight to five or nine. We’re not. All we care is that we can you can communicate with us. You understand, you can speak with us. So we’re in an office environment, you would have allowed a slight… maybe you know, because you can sit beside me, they can point. But now, communication is critical. And then people, you know that… The question is now, how many different tools can you use? So the person with the most diversified toolset? And I’m not talking about email outlook. I’m talking about real tools; tools that are there to make companies more productive. That individual. So that’s what I say: one side of you, you can go and say, Ah, my world is over, I lost my job. And I am saying, No, you actually have become so valuable. You just don’t even realize it, right now. It’s actually your boss or the person you were serving that’s actually going to have a hard time getting the job because when they go there, they don’t even know how to turn on their camera on their computer to do a video interview. They’re like, I’m sorry. Can we do this over the phone? I’m not really …really? And how are you going to conduct business with our clients? Right? Oh, I’m sorry. I don’t know how to use my notebook. I had my assistant do this before for me, I’m like, really? So these are inexcusable today. Yesterday, so, you know, I occurred somewhere a long time ago that the most valuable asset a person can have is the ability to learn.
Oscar Jofre 24:31
You know, I’m 55 years old. And I’m just as excited as I was the first time I got into computers in the early 80s as I am today, and I’m sure there are many like us, but one thing that I keep going through all the time is that you’ve got to keep rebooting yourself. Rebooting is not every year, every three, it’s every month, literally. Right? And, and that reboot is not putting you off. It’s just you’re adding to the to the information base that you carry. So you understand the growth and the opportunities. Otherwise you cannot bring a solution to the market. You can’t. That’s just not possible in this world. The most valuable thing that I as well that I share with entrepreneurs today is this is COVID-19. COVID-19 is what investors are looking for, though, if you’re in the technology space or anything, make sure your business is COVID-19. If you need to look to understand why, then you clearly don’t get an array, you got to be COVID-19. You can’t be building a solution where everybody gets around a room together, or there’s going to be something face to face. You’re obsolete already. Yeah, you’re obsolete already.
Christian Klepp 25:41
That’s it. That’s it. And I mean, you know, there’s that old saying, and this is really going back to your point, you know, Necessity is the mother of invention, right? I mean, if you look back at all, you know, you’ve brought up a couple of like, dates, in the past couple of minutes. But with every crisis, companies emerged out of those right, or people that got laid off, you know, started their own company. So, you know, it’s not all like doom and gloom.
Oscar Jofre 26:06
It’s not! Oh my God, I think it’s so advantaged. I mean, yeah, these individuals have learned tools where others chose not to. Take that education and leverage it, and leverage it with everything else you learn. But now, if you didn’t learn while you were there, well, that’s your own fault. That’s another issue altogether. But yeah, if you just went there and sat there numb and did it, okay, well, they know, we’re not in that world anymore. We need to be versatile. We need to be agile we need to be and more importantly, you need to be hopping around in tools, like, here’s a perfect example of an industry that people think well, Oscar, they’re pivoting. They’re not. So which is the conference business. Right?
Oscar Jofre 26:46
So the likelihood that we will attend a physical face to face conference in the next 24 months, it’s next to zero. The risk factor right now in particular, in North America is too high, maybe no other regions, but here, it’s just too high. So what’s happening? Well, most of them are living online. They don’t see Oscar, they’re going online. They’re not pivoting, they haven’t done anything different. They’re still using the same model. They still, you know, they want the same sponsorship fees. So what’s the value to me? Well, you’re going to be posted. No, you’re not. The fatigue of the user is very different online than it is in a convention center. So that model doesn’t work. And same thing, the tools, the tools that you have. We all know Eventbrite, Eventbrite is the best tool for event registration. Right. Eventbrite should have been the leader in this space. And they aren’t. A company called Hopin just raised 125 million. So Hopin is a startup. What do they do? They put your entire event online. And there’s Eventbrite that’s been around for like 100 years. Just, you know, we just do registrations, that’s all we do. All the registrations are physical, we print them. So there’s, this is where those, you know, individuals who understand the market.
Oscar Jofre 28:01
Same thing with, you know, HR tools. Who is interviewing people face to face? Nobody, It’s done online. So all you’re asked, do we use zoom? No, no, no, I’m talking about like, if you’re going to give an HR tool, do it right. If you’re going to have the individual apply, then make sure it goes in this platform. Make sure that if the video interview is done right there, at the same time. You have a marking system, and you might as well do it all in one platform, rather than doing all these sporadic systems, and those who get that are launching it. So these are the kind of things that are the opportunities. Because now, for the very first time, people are saying, You know what? Yes, you’re right. I do want to look at it. I actually, I don’t want to… what happened to us? Because the people will know, there can be another COVID-19. See, and what happens next time it happens.
Christian Klepp 28:58
Yeah. Yeah, exactly. Exactly. Well, I couldn’t agree more. Oscar, from your experience, you know, talk to us a little bit about the misconceptions that you’ve seen or, you know, in terms of like, what entrepreneurs and companies have when it comes to the private capital market?
Oscar Jofre 29:20
Well, I think the problem we have is entrepreneurs is that we are misguided at times by what success is, right? Yeah. So success is punched at us that, you know, you need to be a unicorn. So that’s one. Number two, you need to have a venture back to be successful. And we have a different opinion. And we don’t just have an opinion. We have a statistical opinion to that. So what does that mean? Well, so in the United States, 150,000 plus companies a year raise capital. 150,000. That’s 150,000. And what’s really important about that is we already know how many venture backed companies there are 1,200. And there’s at least another 1,200 funds. So 2% of the market is already… that’s it. 2%. So about 3000 companies are, that’s it, that’s the only visibility we have. That’s, that’s everything we shoot for that we’re told that that’s we need to strive to be. And then if you’re not, you’re part of the other 98%, the 148,000 remaining.
Oscar Jofre 30:26
So, 147,000 sorry. So are they not unicorns? And we argued that they are. And in fact, we have evidence to prove that they are unicorns, and in that they’ve raised the capital. So why are they not covered? Why are they not mentioned? Because that side of the coin only follows venture backed companies or companies that are invested by funds. So in other words, so if your only view into life is this, and you don’t see the other, then you have this narrow view of the world, right? Isn’t that what we say to every Canadian, travel the world see what it’s like, so when you come home, you’ll have a much better appreciation of things. You won’t think that, you know, like, some people think Canadians live in igloos, and South Americans live in huts, and this and that, those are all images that we have. So same thing in private market. entrepreneurs need to understand and know, you have choices, you have lots of choices, in fact, but each choice you make takes you down a journey. So if you want to be a venture backed company, which is there’s nothing wrong with it. But make no mistake, it’s one it’s less than 1% of the overall market that gets that investment. I mean, they you $20,000, 20,000 deals a year and out of those 20,000 they only pick 1%. And, and that’s fine. If you are fortunate enough to be that one, perfect demondo nothing wrong with that. And if you’re going to go that route, there’s a route for it, you go through the accelerator route. Those routes, and then you get picked up and boom.
Oscar Jofre 31:54
But there’s still other routes you can go. You can go to the angel groups, you and raise capital from the crowd. And this is I think, you know, I would hear from entrepreneurs. Yeah, you know, Oscar, I really don’t want to do that. It just kind of puts us out there. Yeah. puts you up there, how? Like, what exactly do you think? Well, everybody’s gonna know about our deal. So first of all, every private company listening to this, let’s get over ourselves. Nobody knows who we are. We know, I promise you. Nobody knows who KoreConX exist yet. We are a prominent player in this space, we’re nothing. We’re not in every billboard, we’re not in every, we are no names. And if you can put that in your mind, then you’ll be able to understand that it’s okay to go out to the crowd and raise your capital. Americans do it every single day. The rest of the world does. Because those who realize or recognize that, wait a minute, I can raise my capital, I can get 75 million into my company and grow it. So but you chose a different path.
Oscar Jofre 32:59
So understanding the different paths they can take. And too, understanding that just because you didn’t get venture back doesn’t mean your deal is not good deal. I disagree 100% cold-heartedly with the statement of VCs that say if a company is not venture backed, it’s a lifestyle company. I disagree 100%. I have one great client, I have many great clients, my apologies, 120,000+, but a few in one in particular, they raised $100,000 many years ago, a few years ago, four years ago. And now they raised 130 million. 130 million, they’re worth over 1.3 billion pounds. Now, they’re not in any of the pitch book or CrunchBase, or anything like that. They’re not recognized as a unicorn, but they are a unicorn, and there are thousands of unicorns out there, that people don’t know about. And that is what we’re bringing to light. That’s the, that’s our whole mission at KoreConX to empower this ecosystem to brighten it up, to bring the light to the 98% that’s been in the dark for so long. We’re, we are truly in the dark ages sometimes. And, and so there are many opportunities that, you know, you sell too soon, because you didn’t know. You go… oh I don’t get venture, I gotta sell it. No, you don’t. There’s other ways. You don’t need to give up on your goal. And, you know, there’s other ways to move forward.
Christian Klepp 34:21
Right. Exactly. And, I mean, those are really some incredible insights. I mean, if I were to compare this, what you’ve been talking about in the past couple of minutes, it’s almost as if, you know, if somebody is driving a car, let’s say, from Toronto to Montreal, there’s many ways to get there, right. You can use a map or you can just google it with a GPS and the GPS will give you some options in terms of routes. And the route that you take, I guess is entirely up to you. There’s a quick way to get there and there’s a there’s a long way around.
Oscar Jofre 34:54
It is and the journey is…. it’s exciting. But like I said, I see the biggest problem with entrepreneurs – They just don’t understand what those journeys are. And then they’re scrambling, “oh, I’ll take money from anywhere.” And usually, that’s what people say/ They say that people that are looking for money outside of VCs, they’ll take any money. And so, I believe that the biggest key element in what we’re doing in our ecosystem, which is getting great momentum online investing, that’s not VC investing. This is our world. This is the dark, dark, the Dark Ages coming to light. This is where people are going to be exposed to “Wow, I didn’t know that was going on.” Yes, there are companies raising $75 million every year, and they can they can go back every year and raise 75 million from anybody over the age of 18. And the investors do not need to be accredited. And the investor has a security, a share in a company that they can fully trade in a secondary market. That is live today! That is… so these are the things that make that… you know, the private market. So if there’s, there’s the VC backed, great, great journey, it’s got an ecosystem of itself, the lawyers, the auditors and all the players there. Then you got the funds, which again, fund administration great. Then there is the 98% of the big bucket. And we’re finally looking at that big bucket, what it does, and what it represents.
Christian Klepp 36:33
Right. All right. Well, that’s absolutely incredible.
Christian Klepp 36:39
Hey, it’s Christian Klepp. Here, we’ll get back to the episode in a second. But first, is your brand struggling to cut through the noise? Are you trying to find more effective ways to reach your target audience and boost sales? Are you trying to pivot your business? If so, book a call with EINBLICK Consulting, our experienced consultants will work with you to help your b2b business to succeed and scale. Go to www.einblick.co for more information.
Christian Klepp 37:07
So what are some of the key trends in the private capital market that entrepreneurs should look out for? Talk to us about your top three predictions based on these trends.
Oscar Jofre 37:22
Well, so the with, obviously, with COVID-19, the catalyst, the biggest trend is we’re moving online now. It’s now there. It’s the… for an entrepreneur, you got to think of the investor, think about it for a moment. If you don’t know the investor, and you need to raise a significant amount of capital. And you need to get them to your story. So they’re going to view your story online, they’re going to watch a video online, they may watch your presentation online. So they want to connect the presentation, the investment online. So this is part of the biggest thing that we are experiencing right now is the sciences going online. So with that, with that comes the fact that we now need to understand that we now need to manage the entire company online. So this is going to be another transformation that’s going to happen inside the company itself that they’re realizing that we do need to clean house, we do need to… if they’re putting their business online, we now need to do ours as well. Otherwise, how can we communicate? How can we participate? So for us it’s really simple, this catalyst is driving all the different factors we need. And then the third piece, because you’ve been given this opportunity to raise money, you now need to manage it. You now have an investor base that you need to manage, cultivate, take care of, report to. So all these tool sets have been out there independently. Obviously KoreConX, we bring them all to you in one platform. But the idea, the reality is you do need these three things. You need them, because otherwise you can’t take advantage of the opportunity to gain access to this capital. So if you bring in the old school mentality, oh, manage them in Excel. Good luck with that, there’s no… You’re going to manage five people, maybe 10. You can’t do 1000 You can’t even do 100 on Excel without it breaking apart. You know, keeping track of it and moving around different pieces. So for us, we believe that online investing is going to continue for the next 24 months. We believe the next six months will not be 280%. We believe it’ll be 560% based on the going trend that’s going now. Obviously one of the big predictions we had was that the SEC would increase the limits by the new year but they beat us to it on November 2nd. They increase the limits for regulation CF to $5 million. And Regulation A plus to $75 million. This is gonna change everything again.
Christian Klepp 39:55
That’s clearly some progress there.
Oscar Jofre 39:56
Yes, huge progress right? Companies to access capital, to be able to, again, you’re being provided more options in how you can fund your opportunity. But again, comes with responsibility, you need to understand how to harness that power of that capital race, and then leverage it for not only as holders, but what other roles can they have. We often refer to these individuals as ambassadors. Why? Because these are your customers. Imagine for the very first time you can actually go to your customer and say, You like my product so much. Fantastic. Why don’t you invest $100. And by the way, I’ll throw in a month for free. Or by the way, I’ll give you this zip drive for free. So you can even incentivize the investors. Never been able to be done before. It’s historically, it’s one of the most, again, transformative things that’s happened in the private markets.
Christian Klepp 40:49
Well, I mean, just listening to your predictions already got me excited. So I mean, this is definitely an incredible time, you know, as you’re witnessing all of these things being migrated online. And I think you brought it up a few times. And I think it’s such an important point that entrepreneurs need to educate themselves about, not just about the options that are out there, but also the responsibility that comes with those decisions that they make, right?
Oscar Jofre 41:18
Yes, yes, that is critical, because if they do not, they will never have a full grasp as to why? what’s happening to them? I mean, when somebody uses like a regulation, like A plus and you have $75,000, you don’t report to them weekly, or monthly. If you do that, you’re committing suicide as a company. You need to understand these people fell in love with your opportunity. They want to be part of your journey. So, you know, one of the arguments I got into about six, seven years ago, when I wrote an article that, you know, make your shareholders into customers into ambassadors, was from a VC. They said, Who in their right mind, whatever, want 5000 shareholders, and I said, Well, you know what, that’s ironic. He goes, What, why is that? Because when I come looking for money, the very first thing I’m asked is how many customers I have, and the more customers I have, the more values the opportunity. He goes, that’s correct. So that’s what these people are, they are the customers of this product, they’re investing in it. They’re the best, you know, they’re socially driven. I don’t need to pay them as influencers, they already… in fact, they’re paying the company to become an influencer, something that is transformative. And those who understand how to do it. And there are many great companies have done that. We have many companies that have changed that. And their success is going back to every year, raising another $50, another $50, and now they’re going to raise some fund.
Christian Klepp 42:42
Yeah. No, that’s absolutely amazing. And I think that was really the most appropriate description and it’s transformative. That’s totally what it is. Oscar, we talked about this in the previous call, you know, there’s in every field of expertise. And your industry, undoubtedly, there’s no exception here as well. There’s a few commonly held beliefs, right. So there’s certainly a few of those when it comes to raising capital. So talk to us about one such belief, and why you strongly disagree with it.
Oscar Jofre 43:18
That you need to be a venture backed company to be successful. I’ve said it before, and I’ll keep reminding people, don’t think that way. Just, you know, you can still be if you truly believe and you got customers to follow you, and you’re gonna grow your business, you may not scale as fast, you may not raise as much capital as they do. But now there’s ways to do it. So that I think that’s one big one.
Oscar Jofre 43:42
The second commonly held belief. And again, because VCs talk about it, it makes you feel not worthy. When they say that if you’re not a venture backed company, you’re a lifestyle company. And I disagree with that. Look at Koch. The Koch brothers in the United States, it’s a multibillion dollar corporation. It’s not venture backed, right? The Waltons are not venture backed. So there are a lot of privately held companies. I apologize, Walton is not but there are others that are privately held. So I think it’s just about making sure people get over these things to make sure they understand. I’m certainly not saying they know that the venture route is not the right route. I am simply saying you have options. Look at all the options you have in front of you. What are the things most important to you? What is each one giving you a value? And that will help you understand some of these beliefs that you have.
Oscar Jofre 44:39
And the next belief that I think everybody needs to get over it. Nobody knows you. That’s it. That’s it. No matter how big you got a raise, you got 30,000, you got a million followers, we’re still a speck. You know we are a speck. And I don’t mean any disrespect to that, I just mean that because of that, you can relax a bit. I just told you about a company that’s worth over a billion dollars. And you know, nobody really knows who they are. I mentioned their name, and people have never heard of them. Of course, there are many billion dollar companies many of us have never heard of. So just don’t feel that, you know, because if you see it in the news, because you read the same brags, TechCrunch, Crunchbase, CoinDesk or in whatever form of online magazine you read. Just work on your goals. Put the strategy in place. Where do you want to raise the money? What kind of capital do you need? What is the goal? What is… truly understand your requirements. Forget about what others are doing. Because as soon as you get caught up in that trap, it will be seen that you’re not following what you’re doing. You’re following what others are doing. So for me, it’s really those kind of hang ups, and do not fear the crowd. If you fear the crowd, then do you don’t want customers. So there you go. That’s it. That’s a simple answer that I can give everybody.
Christian Klepp 46:07
No, that was some… that advice was really gold. And I think as you’ve rightfully alluded to, I mean, success can come in different forms. And it’s not always necessary that you have to go with the flow. I mean, if this year has taught us anything, it’s that, you know, sometimes you just have to, like, break from the flow. Right. And so they swim against the current. I mean, that’s what disruption is about. Right?
Oscar Jofre 46:29
Well, but that’s a great example. So what would you do if we weren’t, if people didn’t have online investing? Right? People still investing for a reason. Because they want to make money. Okay, and let’s make sure that we do that, because otherwise we’re gonna have a problem here. Right? So it’s, I think it’s important that we recognize that it’s not just one way that it’s going to happen. So I’m, like I said, I’m really excited about the fact that we are going to I don’t want anybody listening here today thinking that I’d like COVID-19. I don’t, I’ve been in quarantine since February. It’s you know, but you have a choice, you can either grumble about that, or that or you can embrace it and see it for what it is. It is an opportunity. And I want people to listen to this.
Oscar Jofre 47:24
It’s an opportunity for anybody who didn’t exist before to emerge just the next unicorn. And I truly mean that. Because there are things that you are thinking about right now, that can help. Like the company like Hopin. Nobody saw hopping before COVID-19. People would say, why on earth would you ever need a platform to do an event online? We don’t… you know, we go to conventions. So that’s why Eventbrite was number one. Amazing how one event turns things around. And so and that’s, that’s just one area, it’s going to be an insurance, HR, banking, capital markets, online investing, all of these things… there are still opportunity. So I believe there will be new entrants emerging, and there’ll be old ones disappearing. And that’s just the way the market is.
Christian Klepp 48:12
Exactly, exactly. So maybe one thing that you think people should start doing, and one thing that people should stop doing when it comes to raising capital. And I believe you’ve, you’ve mentioned a few of these already before, but name one thing for each category.
Oscar Jofre 48:30
Um, I mean, the one thing you got to stop doing when you’re raising capital is doing the same thing over and over again, without just you know, getting any results thinking that eventually because you hear the story that you got to hit on 1000 doors before you get one but that’s… you miss the other parts of it is, yes, you went through one door and it gives you feedback and you’re modifying, you’re trying different things over time. So that’s number one.
Oscar Jofre 48:58
So the second part, what things you should be doing is not giving up. I mean, look, again, raising capital is not easy. If it was the easiest thing on the planet, everybody would be doing it. And I suggested that nobody… this is not available to everybody, but it’s not being entrepreneur is there isn’t a book. I personally, I can’t speak for every other entrepreneur. But I’ve been asked… he asked, Why don’t you write a book about what it’s like, entrepreneur? Really? but my journey will be so different than yours. So different. I can’t imagine that two entrepreneurs are going to be the same, just like two capital raises are not alike in any way. The dollar amount, maybe you both raise 5 million or 10 million, 100 million, but it’s in the details right? It’s in the details that matter, that’s the real deal. So you know, not giving up and constantly revisiting and surrounding yourself with smart people. Right having people that are going to advocate for you ,assist you in what you’re working on, so you can move forward.
Christian Klepp 50:02
Yeah. Yeah. Well, that’s really great advice. And you know, the bit about like, not giving up and perseverance and you know, to your second point, it reminds me of an expression I heard on one of these webinars. So the guy says, you don’t always get what you want, but you always get what you vibrate. Yeah, exactly.
Christian Klepp 50:22
So, Oscar, man, this has been such an incredibly insightful and engaging session. Thanks so much for coming on and sharing your experiences with us. What’s the best way for people out there to connect with you?
Oscar Jofre 50:34
Well, I’m pretty easy to find. I’m on Twitter under Oscar Jofre; Facebook: Oscar Jofre, LinkedIn: Oscar Jofre. Email is Oscar@KoreConX.com. So yeah, I’m not. You can find me on Wikipedia as well, I believe and on there as well. So I’m pretty easy to find. In this day and age, we’re all digital. We are here.
Christian Klepp 51:00
Perfect. Um, Oscar, this session has been absolutely incredible. You know, thanks again for your time. I certainly hope that the listeners were taking those throughout this interview. I know I was. So um, thanks again for your time.
Christian Klepp 51:13
Thank you for joining us on this episode of the B2B Marketers on a Mission podcast. To learn more about what we do here. I’m like, please visit our website at www.einblick.co. And be sure to subscribe to the show on iTunes or your favorite podcast player.
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