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Study Hall: Raise Money for a Business without a Bank with Mike Brown · Earn Your Leisure

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Speaker 6: See you on the other side, my graduates from my
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Speaker 6: school being forced back drop drop, Mike.
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Speaker 7: Drop, back drop drop.
2:20
Speaker 5: All right, so now we're gonna talk about something very
2:22
Speaker 5: interesting and something actually when you when you contacted us,
2:25
Speaker 5: you brought up a good point He's like, I don't
2:27
Speaker 5: think you talked about this, and like, you know what,
2:28
Speaker 5: we haven't talk about it, right, so, yes, equity crowdfunding. Right,
2:36
Speaker 5: so people might not be familiar with equity. Well, crowdfunding
2:39
Speaker 5: in general is a way to raise money from large
2:41
Speaker 5: amounts of people, right. So, like the most popular form
2:45
Speaker 5: is kickstarter. People things like that, Right, It's kickstarter where
2:49
Speaker 5: you kind of like a donation kind of charity thing.
2:52
Speaker 5: Sometimes you can give people like T shirts, but it's
2:54
Speaker 5: pretty much they're not getting nothing in return for that
2:56
Speaker 5: except for just good will they want to support you.
2:58
Speaker 5: Right now, Equity crowd funding is something that is new
3:04
Speaker 5: that came about from President Obama's Jobs Bill.
3:07
Speaker 3: Up, I'm not yeah, the Jobs Act.
3:08
Speaker 2: And yeah, so can you talk about that because it's
3:11
Speaker 2: pretty interesting.
3:12
Speaker 3: Yeah.
3:12
Speaker 6: No. So, you know, one of the any business, right
3:15
Speaker 6: particularly within in tech companies, right, you have to raise
3:19
Speaker 6: funding and for for you know, decades now, right. The
3:23
Speaker 6: way you do that is go to an investor, right.
3:25
Speaker 6: You pitch your vision to that one individual usually or
3:29
Speaker 6: a fund, and you know they make a decision on
3:32
Speaker 6: if they're going to give you the startup capital that
3:35
Speaker 6: you need to go build this thing, and in exchange,
3:37
Speaker 6: they get equity, right, they get ownership part ownership in
3:40
Speaker 6: the company. And that's how it's been done for ages.
3:43
Speaker 6: Now one of the things that it has created is
3:46
Speaker 6: a very big gap in terms of wealth and the
3:49
Speaker 6: access to generate wealth, right when you talk about angel investors, right,
3:55
Speaker 6: and again, trust me, like I've learned all of this
3:57
Speaker 6: stuff in the last five years. I didn't, Like I said,
4:00
Speaker 6: I don't even know what Silicon Valley was or the word,
4:02
Speaker 6: and so this was all things that I had to
4:05
Speaker 6: learn on the go. But when it comes to angel investors,
4:08
Speaker 6: these are basically wealthy individuals that are investing their own capital,
4:12
Speaker 6: like out their bank account. They they're investing in the
4:14
Speaker 6: companies getting equity.
4:16
Speaker 3: Uh.
4:16
Speaker 6: And then when those companies go on to do very
4:18
Speaker 6: well and get sold or i po then those angel investors,
4:22
Speaker 6: those wealthier, those wealthy votes get even more wealthy, right
4:25
Speaker 6: because they get a return on their capital.
4:26
Speaker 3: And so it was creating this gap.
4:28
Speaker 6: And and you know, shout out to Obama because he
4:31
Speaker 6: you know, saw that there was a disparity there and
4:33
Speaker 6: thought that anybody should be able to have access if
4:36
Speaker 6: they can access that deal, right, because there's there's there's
4:40
Speaker 6: part access, but then having the capacity to even get involved, right,
4:44
Speaker 6: and so he created the Jobs Acts, Right, it's jumpstart
4:48
Speaker 6: our business startups, and it is you know, it's it's
4:53
Speaker 6: actually a whole lot of different things. But one of
4:55
Speaker 6: the things in there is equity crowdfunding. And what it
4:58
Speaker 6: does is it gives founders of companies the ability to
5:02
Speaker 6: open up the fundraising to what they call non accredited investors.
5:07
Speaker 6: So that angel investor that I mentioned is going to
5:10
Speaker 6: be an accredited investor. And to be an accredited investor,
5:14
Speaker 6: you have to make two hundred and fifty thousand dollars
5:16
Speaker 6: a year or more at least for the last three
5:18
Speaker 6: years as your tax you know, paperwork will show or
5:22
Speaker 6: have a million in liquid ascents.
5:24
Speaker 8: Yeah, we can see how that could be a problem.
5:25
Speaker 8: Like especially in the communities we live in.
5:27
Speaker 4: It's like, how many people do we know that make
5:28
Speaker 4: two hundred and fifty thousand as a combined family somebody
5:33
Speaker 4: one person make.
5:34
Speaker 3: It and as a group, actually you can.
5:36
Speaker 6: You and your spouse collectively have to make three hundred thousand, right,
5:40
Speaker 6: and so they even make that bargain a little higher,
5:42
Speaker 6: and so or have a million in liquid assets.
5:45
Speaker 2: That's it. That's the only requirements to fifty million in assets.
5:48
Speaker 3: Or a million in liquid liquid, So it can't, but
5:50
Speaker 3: it basically can't.
5:52
Speaker 5: They got to be something like a retirement account on
5:55
Speaker 5: bank or stock stuff like that, things that you can.
5:58
Speaker 3: Look at the liquid at yeah quickly.
6:00
Speaker 6: And so that's you know that and honestly or like
6:04
Speaker 6: what I looked at in the research I've done, it's
6:06
Speaker 6: that's about eight or nine percent of Americans, right, And
6:11
Speaker 6: so the ninety one percent essentially right, can't can't even
6:15
Speaker 6: access that deal. Even if they know the founder of
6:18
Speaker 6: X y Z company. They can't you know, invest even
6:21
Speaker 6: if they havn't to have some load of cash that
6:23
Speaker 6: they came across or whatever. But so what Obama said is,
6:27
Speaker 6: you know, through the Jobs Act, now anybody should be
6:30
Speaker 6: able to access that. So in twenty sixteen is actually
6:33
Speaker 6: when they went through, and now you started to see
6:35
Speaker 6: the rise of these equity crowdfunding platforms. So the thing
6:40
Speaker 6: that you have to know is like if I run
6:42
Speaker 6: a tech company or startup, just because you know the
6:46
Speaker 6: Jobs Act exist doesn't mean you could just walk up
6:48
Speaker 6: and give me some money and say I want to
6:50
Speaker 6: be an investor.
6:51
Speaker 3: The companies have to go through. So this is all
6:53
Speaker 3: sanctioned by the SEC.
6:55
Speaker 6: You know, there's a lot of kind of formal terms
6:57
Speaker 6: I won't bore you guys with, but you have to
7:00
Speaker 6: go through a very extreme vetting process. So first, there's
7:02
Speaker 6: the platform. So you brought up a good point Kickstarter, Indie,
7:06
Speaker 6: go go, right, these are forms of crowdfunding. Go fund
7:10
Speaker 6: me is a crowd as a crowdfunding platform, right, and
7:13
Speaker 6: again to your point, you're raising money for something from
7:16
Speaker 6: a large crowd of people.
7:17
Speaker 3: Hence the name.
7:20
Speaker 8: The original of the crowdfunding itself was based on a
7:23
Speaker 8: rock band like yeah, they couldn't get money to go
7:26
Speaker 8: on tour.
7:27
Speaker 4: Oh yeah, so their fans came together to say, like
7:30
Speaker 4: let's fund them to at least have a tour to perform.
7:33
Speaker 8: Hen it's crowdfunded.
7:35
Speaker 5: Troy always comes with it was like a white elephant
7:41
Speaker 5: always comes with like these little does That's all right,
7:47
Speaker 5: so we back to the crowd.
7:50
Speaker 6: Yeah, so you know, crowdfunding as in and of itself exists, right,
7:55
Speaker 6: It has existed for some time, all the way back
7:57
Speaker 6: to the rock band. Right, and to your point, crowdfunding
8:00
Speaker 6: came in right when you and let's just draw a comparison.
8:03
Speaker 3: Let's take Kickstarter for example.
8:04
Speaker 6: This is a Kickstart is a company that enables you
8:07
Speaker 6: to run a crowdfunding campaign, right, and so you can
8:10
Speaker 6: put up your project, whether it's a film, whether it's
8:13
Speaker 6: a whatever it is, right and you can basically promote
8:16
Speaker 6: it and people will buy in and maybe you have perks.
8:18
Speaker 6: Like you said, now, the difference, right, you talk about
8:22
Speaker 6: equity crowdfunding. There are also platforms, right, so republic is
8:26
Speaker 6: one that is probably one of the more popular ones.
8:29
Speaker 6: There's others called we funder, you know a few others
8:33
Speaker 6: that you know allow you to have an equity crowdfunding campaign. Now,
8:38
Speaker 6: they have to go through a rigorous process to even
8:40
Speaker 6: be set up. But the big difference between those two
8:43
Speaker 6: platforms is that on Kickstarter, if I'm not mistaken, basically
8:47
Speaker 6: anybody can set that up. You can go in there,
8:49
Speaker 6: fill out the thing and then boom, launch your campaign
8:52
Speaker 6: and it's up to you.
8:53
Speaker 3: And you have to raise a certain amount to even access.
8:55
Speaker 6: To the capital for equity crowdfunding because these are technically
9:00
Speaker 6: public offerings right of shares in a company and a
9:03
Speaker 6: private company, it has to be sanctioned by the SEC.
9:07
Speaker 6: So it's a very rigorous process, right, I mean they
9:10
Speaker 6: dove deep into the financials and all the history of
9:13
Speaker 6: the company. H And then that's how you're able to
9:17
Speaker 6: even be accepted on one of the platforms, right like
9:19
Speaker 6: Republic for us. And then and really it's a it's
9:23
Speaker 6: a because basically I don't even know if we said it.
9:26
Speaker 6: What it means is equity crowdfunding enables anybody not a
9:30
Speaker 6: credited investors to invest into private companies for as little
9:34
Speaker 6: as you know, I think legally the minimum is like
9:37
Speaker 6: ten dollars.
9:38
Speaker 5: Yeah, now that's something that all right, So I don't
9:40
Speaker 5: want people to not understand this, so because I get
9:43
Speaker 5: I get this question on my DM so often, like
9:46
Speaker 5: when I post stuff about like Beyond Meat and like
9:48
Speaker 5: Lift and all of these stuff, and I post stories
9:50
Speaker 5: about like nas and like how he invested early, and
9:52
Speaker 5: people like, well, how can I invest in these companies early?
9:55
Speaker 5: For the most part, you really can't, right, like you said,
9:59
Speaker 5: I mean on that level is like angel investors and vcs,
10:03
Speaker 5: but even on the small levels and credited investors, so
10:06
Speaker 5: you have to be like a special kind of person
10:09
Speaker 5: for lack of a better word, to actually invest. But
10:11
Speaker 5: now it allows the general public crowdfunding allows the general
10:15
Speaker 5: public to invest in companies on the ground level, because,
10:20
Speaker 5: like you said off camera, one of the main disadvantages
10:24
Speaker 5: is that you're getting people that can invest in these
10:27
Speaker 5: companies and then when they go public, their percentage goes
10:31
Speaker 5: up like a thousand percent. But by the time the
10:34
Speaker 5: general public is in the stock market, they've already made
10:37
Speaker 5: them money that they're out.
10:38
Speaker 2: They're out the gay right.
10:39
Speaker 5: So and it's it's interesting because probably the most famous
10:46
Speaker 5: in our community person that has done that is Jay Morrison.
10:50
Speaker 5: He did a real estate crowdfunding with the Tulsa Real
10:53
Speaker 5: Estate Fund and he same thing.
10:56
Speaker 2: He raised money from.
10:58
Speaker 5: The crowd and I think like over ten million dollars
11:01
Speaker 5: in a very short period of time. So it's a
11:03
Speaker 5: very successful real estate crowdfunding fund campaign. But it's something
11:07
Speaker 5: for people to understand from two aspects of it. From
11:11
Speaker 5: a business owner, it's a way to raise money, right
11:15
Speaker 5: because financing is extremely important and it's hard to get
11:18
Speaker 5: bank loans, it's hard to get outside financing. So this
11:21
Speaker 5: is a way for business owners to raise large amounts
11:24
Speaker 5: of money. Now you're giving up equity in it, and
11:27
Speaker 5: we'll talk about that, but you know, you don't get
11:30
Speaker 5: nothing for something. You always have to do something. So
11:33
Speaker 5: and it's also a way for investors to invest in
11:36
Speaker 5: companies that they believe in and they think that can
11:39
Speaker 5: blow up because now you might put in ten thousand
11:43
Speaker 5: dollars on a company, but in five years that company,
11:46
Speaker 5: that percentage might be worth one hundred thousand because you
11:48
Speaker 5: got it on the ground level. And you as said
11:50
Speaker 5: something about Ben Harwitz, right, Ben Howardz If anybody's not familiar,
11:55
Speaker 5: he's a tech giant, VC giant, and he's good friends
11:59
Speaker 5: with NAS. He's one of the reasons why NAS is
12:02
Speaker 5: really blowing up. He's kind of like mentored him. I
12:04
Speaker 5: read some stuff about that If anybody's not Familion, Niles
12:07
Speaker 5: is doing this thing with Queensbridge Bridge. Yeah, and they
12:10
Speaker 5: invest in like lifting Ring pill Pack, all a lot
12:15
Speaker 5: of these companies. And so Ben is really into hip hop.
12:21
Speaker 5: He's like a hip hop head. And it was maatic
12:23
Speaker 5: from what I understand, is like one of his favorite albums. Ever,
12:27
Speaker 5: so he just he developed and Horror was not Black
12:29
Speaker 5: by the way, if you didn't know about the name.
12:32
Speaker 2: If.
12:34
Speaker 3: So, he's just the barbecue.
12:37
Speaker 5: So you were saying that it was crazy because roughly
12:42
Speaker 5: he invested like two point fifty into Instagram and then
12:46
Speaker 5: like two years later it was worth like eighty million
12:49
Speaker 5: or something like that.
12:49
Speaker 6: Right, Yeah, I mean, so I don't have any facts
12:52
Speaker 6: on this. Actually shout out the Chamellionaire if you know,
12:56
Speaker 6: Chamellionaire is really really been winning and this Houston's own
13:00
Speaker 6: ride dirty and you know he's been winning in the
13:04
Speaker 6: tech game and just real quick, you know he I mean,
13:07
Speaker 6: we were talking about a situation that happened I think
13:09
Speaker 6: twenty seventeen finals, right, and this is where it actually
13:13
Speaker 6: came out that you know, chamillionaires. Yeah because he because
13:17
Speaker 6: he yeah, he was you know he was court side, yeah,
13:20
Speaker 6: and like in the background of a picture. And it's
13:22
Speaker 6: how many ring tones did he sail at the finals
13:24
Speaker 6: game game five, you know, court side And people came
13:27
Speaker 6: and said, no, he's been early investor in Lyft, early
13:30
Speaker 6: investor in ring you know, early investor in the number
13:32
Speaker 6: of companies that have done well. And so you know,
13:36
Speaker 6: actually Chameleon I was the one that kind of you know,
13:38
Speaker 6: put this, put this kind of this data out and
13:41
Speaker 6: now I don't know, you know, the details and specifics
13:43
Speaker 6: on it. So let me make that clear, but there
13:46
Speaker 6: was a very sizeable return you know in the in
13:48
Speaker 6: the eighties of millions of dollars you know, based on
13:50
Speaker 6: that initial investments from what I hear. But it shows
13:54
Speaker 6: the power of equity ownership right and and now was
13:56
Speaker 6: I think with the with the real point that he
13:59
Speaker 6: was making is that you know, you have to be
14:01
Speaker 6: able to get in on the ground level, and for
14:03
Speaker 6: so long the price was so much higher than earners.
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Speaker 6: You know, most of our folks in the community could
17:01
Speaker 6: ever even think about investing. And so with the equity crowdfunding,
17:05
Speaker 6: that's where because it's coming from a crowd of people,
17:07
Speaker 6: you can make that price much lower, you know what
17:10
Speaker 6: I mean. And so for like for win win for
17:12
Speaker 6: two hundred and fifty dollars you can own equity, right,
17:16
Speaker 6: I'll be it a smaller portion compared to somebody that's
17:19
Speaker 6: putting in twenty five grand or two hundred and fifty thousand,
17:22
Speaker 6: but you know, it's all about having a slice of
17:24
Speaker 6: that pie, particularly if you believe in the company, if
17:27
Speaker 6: you believe in the mission, if you're going to be
17:29
Speaker 6: a consumer of it, right, and that to your point,
17:32
Speaker 6: the ninety one percent that aren't that are non accredited investors.
17:36
Speaker 6: They have to wait until it's already publicly traded to
17:39
Speaker 6: even you know, have some ownership, right, imagine being able
17:43
Speaker 6: to do that on the front end. But now you
17:45
Speaker 6: actually can. And that's where the equity crowdfunding, to your point,
17:48
Speaker 6: comes in, where we can raise money, particularly as black founders,
17:52
Speaker 6: we have now an alternative avenue to raise money from
17:56
Speaker 6: the crowd versus having to go to a very particular
17:59
Speaker 6: specific demographic of vcs and people.
18:02
Speaker 5: I'm glad you brought that com millionaire story up because
18:04
Speaker 5: it highlights a problem in the community. So it all
18:08
Speaker 5: started with the It was like the Golden State Final.
18:10
Speaker 5: Anybody knows finals tickets they cost a lot of money,
18:13
Speaker 5: like hundreds of thousands, Like it's crazy now hundred of thousands,
18:16
Speaker 5: but a lot of money, a lot of them. So
18:18
Speaker 5: he's front row at the finals, and it's like a joke.
18:21
Speaker 5: It's like, damn, how many how much ringstos did he sell?
18:24
Speaker 2: Like he has somebody here doesn't belong where feen years.
18:27
Speaker 5: But little do they know the guy's been making millions
18:30
Speaker 5: of dollars and investing in companies long after his musical
18:35
Speaker 5: career was over. So when they find that out, it's like,
18:37
Speaker 5: now it's not funny anymore. Right, So it's like a
18:39
Speaker 5: lot of times we highlight celebrities and entertainers, but like
18:45
Speaker 5: even if you look at that Jay Z and Beyonce
18:47
Speaker 5: at the front row, everybody knows them, but they're probably
18:51
Speaker 5: middle class for everybody else in the front row. Like
18:55
Speaker 5: the guy that got into the fight, nobody knew who
18:57
Speaker 5: he was. He worth eight billion dollars, just a random
19:00
Speaker 5: billionaireuntil he put It's like, how many people that you
19:05
Speaker 5: don't know are just billionaires? The one person that you
19:09
Speaker 5: do know just became a billionaire. Not not you know,
19:12
Speaker 5: no disrespect to James b. We love them, but that
19:15
Speaker 5: just goes to show you how much money it's out there.
19:20
Speaker 3: Right, Yeah, in the Trail.
19:24
Speaker 6: Hotel, right, And you know, and that's why I'm glad
19:26
Speaker 6: you brought that up, because when I was in the Bay, right,
19:28
Speaker 6: one of the things that I really actually appreciated, you know,
19:32
Speaker 6: relative to l A right, is that you didn't know
19:34
Speaker 6: who you was talking to or what you were doing.
19:36
Speaker 3: Like the money was just shown way differently, you know
19:39
Speaker 3: what I mean.
19:40
Speaker 6: And you just have people that were just grinding and
19:42
Speaker 6: hustling and building companies, and you know, you meet a
19:45
Speaker 6: guy just randomly looked like you know, random guys like yeah, man,
19:49
Speaker 6: you know, just sold my second company, Amazons.
19:53
Speaker 3: Words, you know what I mean, and drinks on you.
19:55
Speaker 6: Then you know what I'm saying, it's it's just a
19:58
Speaker 6: different it's a different mind said and to your point,
20:01
Speaker 6: like you know, like you said, it wasn't funny no more,
20:04
Speaker 6: you know what I mean. And you know, I think
20:09
Speaker 6: that I love these examples where you look at you know,
20:12
Speaker 6: a cha millionaire who and that's a great friend.
20:14
Speaker 3: Shout out to Cam and and by the.
20:15
Speaker 6: Way, he's he's an entrepreneur as well as an investor.
20:19
Speaker 6: He started his own tech app tech company called Convos,
20:22
Speaker 6: which I you know, suggests everybody go check out and download,
20:26
Speaker 6: and he's been building and feeding into the community, giving back,
20:29
Speaker 6: you know, and and and you gotta you gotta love that.
20:31
Speaker 6: But you look at, you know, the Beyonce situation right
20:34
Speaker 6: where if for those who don't know, you know, she
20:38
Speaker 6: essentially passed up a cash offer to perform at a
20:41
Speaker 6: big Uber event, passed on six million dollars, as the
20:45
Speaker 6: story goes, and wanted equity in exchange, and they gave
20:49
Speaker 6: it to her, and then they just recently I pod
20:51
Speaker 6: and supposedly it's worth somewhere in the three hundred million
20:54
Speaker 6: dollar range. Right, And again that's the power of equity,
20:58
Speaker 6: because you know, they I PO, you own shares of
21:00
Speaker 6: the company, and now you're able to cash that in.
21:03
Speaker 6: Now granted that's on paper, right that that worth, but
21:07
Speaker 6: she can cash that in and make it.
21:09
Speaker 5: You know, who else has a good equity story? I
21:10
Speaker 5: told this story before, but I never told her on
21:12
Speaker 5: the podcast. Some might as well tell fifty cur shout
21:17
Speaker 5: out to fifty.
21:17
Speaker 2: We don't we don't owe him any money? Oh yeah, yeah, Now, so.
21:23
Speaker 5: Everybody knows fifty cents vitamin water he made, like they say,
21:26
Speaker 5: ninety eighty million dollars, right, because what happened is that
21:29
Speaker 5: the he had equity, I think like ten percent equity
21:31
Speaker 5: stake in the company. Then Coca Cola brought it for
21:34
Speaker 5: a billion dollars and then his ten percent was worked
21:36
Speaker 5: like one hundred million. What they don't know is that
21:40
Speaker 5: so vitamin Water they got from Vitamin Water there from Queen,
21:43
Speaker 5: Queensland Queen.
21:44
Speaker 2: So yeah, so fifty Queens gets the money. So fifty is.
21:48
Speaker 5: From Queens from southside and you know who else is
21:51
Speaker 5: from Queens Metal World Peace, why not normally he's from Yeah,
21:55
Speaker 5: he's from queens Bridge, home with Us and Mob Deep
21:59
Speaker 5: and a bunch of other people. So when the guys
22:02
Speaker 5: that started Vitamin Water, they was looking for somebody from
22:05
Speaker 5: Queens hometown and they wanted a celebrity, so they approached
22:08
Speaker 5: Roan Our tests about being like the face of vitamin Water.
22:12
Speaker 2: Right, he's an athlete, sizeable names, it's you know at
22:16
Speaker 2: that time.
22:17
Speaker 5: So they offered him the same deal, ten percent equity stake,
22:23
Speaker 5: and he wanted two hundred thousand dollars. They didn't have
22:27
Speaker 5: two hundred thousand dollars to actually pay him, so they
22:31
Speaker 5: told them, well, we can't give you two hundred thousand,
22:33
Speaker 5: but we can't give you ten percent, He turned down
22:37
Speaker 5: fifty cent, took the deal.
22:39
Speaker 2: Just so happened.
22:40
Speaker 5: One year later, Goca Cola bort them for a billion
22:42
Speaker 5: dollars and at ten percent, turned into one hundred million dollars.
22:46
Speaker 5: So round our test gave up one hundred million for
22:49
Speaker 5: two hundred thousand. Education. He didn't fully understand the power
22:54
Speaker 5: of equity. He's like, no, pay me. You try to
22:56
Speaker 5: pull a fast one over right right, right, right, but
22:59
Speaker 5: it all comes down to education. So now you hear
23:01
Speaker 5: Beyonce say, pay me in equity. So we're starting to
23:04
Speaker 5: fully understand this, and especially in the VC world and
23:09
Speaker 5: Silicon Valley, that correct, siliconlic Silicon Valley, they're gonna know now.
23:17
Speaker 2: Well you was gonna know anyway.
23:19
Speaker 5: So that's something that's been going on for years, right
23:23
Speaker 5: where it takes time and the back end is always
23:28
Speaker 5: more profitable than the front end. So now we fully
23:30
Speaker 5: understanding this, and we need to be fully aware of this.
23:33
Speaker 5: So in that vein being that you have run a
23:36
Speaker 5: successful equity crowd funding campaign, you're actually still running in it.
23:40
Speaker 5: You're still running it right now. All right, somebody has
23:43
Speaker 5: a business and they want to take the same route
23:45
Speaker 5: that you did, right, what are the steps to actually,
23:49
Speaker 5: because I know you said it's a whole process with
23:51
Speaker 5: the sec they gotta get approved and all that stuff,
23:53
Speaker 5: Like what's the steps?
23:54
Speaker 6: Yeah, so the steps is, you know, you you have
23:56
Speaker 6: to you essentially can apply I believe to the company.
24:00
Speaker 3: Now we were a little rare.
24:01
Speaker 6: We actually you know, companies reached out to us, like
24:04
Speaker 6: Republic and how that got set up. So, but there
24:07
Speaker 6: is kind of a submission process, I believe where you
24:09
Speaker 6: can be considered. They actually have people on their team
24:12
Speaker 6: that are looking for companies and they're trying to say, hey,
24:15
Speaker 6: we think you should do an equity crowdfunding campaign because
24:18
Speaker 6: you know their model is they make a percentage of
24:21
Speaker 6: what you ultimately raise, right, So they're looking for great
24:23
Speaker 6: companies that they think.
24:24
Speaker 3: Will be successful.
24:26
Speaker 6: So if you end up finding yourself in a position
24:28
Speaker 6: where you know, you reach out and there's alignment, they
24:31
Speaker 6: do a vetting process themselves, then you're you're kind of
24:34
Speaker 6: in the game. You gotta go through the process of
24:36
Speaker 6: you know, pulling all your financials, right, you got to
24:39
Speaker 6: go through It's just like I said, it's a very
24:41
Speaker 6: rigorous process. And you I think the thing you have
24:44
Speaker 6: to make sure that you understand is what you're what
24:47
Speaker 6: you're kind of getting yourself into, right, because not and
24:50
Speaker 6: this goes back to even and this is probably a
24:52
Speaker 6: whole nother podcast just around the types of funding and
24:55
Speaker 6: who gets that type of funding right, because if you
24:59
Speaker 6: you know, depending on your business, right, there are only
25:01
Speaker 6: a certain type of business, certain types of businesses that
25:05
Speaker 6: should be raising money from venture capitalists, right because these
25:09
Speaker 6: vcs want to see ten x return like hockey stick growth, right,
25:14
Speaker 6: and that's why they're giving you that money. If you ain't,
25:16
Speaker 6: if you ain't getting that way, which is fine, right.
25:18
Speaker 6: You have other companies that just grow steadily profitable, you're
25:21
Speaker 6: making money. That's a great business, but you shouldn't be
25:23
Speaker 6: taking money from kind of the the investors that we're
25:26
Speaker 6: talking about right in terms of their credit, because there's
25:29
Speaker 6: a there's an expectation there. But when you when you
25:32
Speaker 6: go back to you know, looking at your business and
25:35
Speaker 6: where you are, right, I think one of the things
25:37
Speaker 6: that is key to look at, and we looked at
25:40
Speaker 6: this even in our own decision, is how attractive and
25:44
Speaker 6: understandable will it be to the crowd, right, Because you've
25:47
Speaker 6: gotta you gotta resonate with people, and we're building something
25:51
Speaker 6: that we believe touches everybody. Right, you talk about uh,
25:54
Speaker 6: sports and philanthropy and entertainment.
25:57
Speaker 3: Right.
25:58
Speaker 2: Uh.
25:58
Speaker 6: My good friend Don dix And said the other night
26:00
Speaker 6: that you know, she invested in our company as well,
26:03
Speaker 6: and she said that, you know, when when operates into
26:07
Speaker 6: recession proof businesses, entertainment and sports, people could be doing
26:11
Speaker 6: down bad and all across life, but you're gonna watch
26:13
Speaker 6: that game. You're gonna find a way to you know,
26:15
Speaker 6: get in in that into that experience, and so you know,
26:18
Speaker 6: you got to think about is this going to be
26:20
Speaker 6: attractive to the average consumer. That was one thing that
26:23
Speaker 6: I had to really kind of even adjust how we
26:25
Speaker 6: talk about the company because I'm so used to talking
26:27
Speaker 6: to sophisticated you know, investors.
26:30
Speaker 3: That this is what they do.
26:31
Speaker 6: So there are terms in terminology that we can use
26:34
Speaker 6: that they understand very quickly, whereas you're talking to the
26:37
Speaker 6: crowd right through communication or whatever.
26:40
Speaker 3: You got to kind of break that down. And I've
26:42
Speaker 3: been learning to your point.
26:43
Speaker 6: Like the the big gap and knowledge of what equity
26:47
Speaker 6: it actually is, even even to the point where on
26:50
Speaker 6: the hiring side, one of the things for startups is
26:53
Speaker 6: you have little capital usually, so you can offer early
26:56
Speaker 6: employees equity, right, and that's where you get big time
26:59
Speaker 6: companies like uh, you know, big time engineers at Google
27:04
Speaker 6: for example, who will leave Google right a very cush
27:07
Speaker 6: job and go work at a startup because they're getting
27:10
Speaker 6: some percentage in the equity. So they're saying, I'll pass
27:12
Speaker 6: on that you know very well to do job, to
27:14
Speaker 6: take equity because I'm.
27:15
Speaker 3: Going to help build this thing to become whatever that is.
27:19
Speaker 6: Even as we've now come to Houston, there's been conversations
27:22
Speaker 6: with potential employees that who don't necessarily even understand. They're like, no, like,
27:26
Speaker 6: you know, we need this much money, and it's like, well,
27:29
Speaker 6: you know, we'll be a little under market, but we
27:31
Speaker 6: want we can comp that with equity, which now I
27:34
Speaker 6: find myself having to explain, actually, how valuable that that's
27:37
Speaker 6: that that you're the fact that you even have an
27:39
Speaker 6: opportunity to have equity.
27:41
Speaker 3: Is a big deal.
27:41
Speaker 6: And that's what that's why I love these pop culture examples.
27:44
Speaker 6: Beyonce a chameleon there, you know fifty that everybody knows,
27:48
Speaker 6: and they're showing that, you know, how powerful that is.
27:50
Speaker 6: And now the fact that anybody can get in on
27:52
Speaker 6: that equity. I think it is a game changer for
27:56
Speaker 6: not only our communities. You talk about generating general tional
28:00
Speaker 6: wealth and you know create what you guys talk a
28:03
Speaker 6: lot about financial literacy. When you know better, you do better, right,
28:06
Speaker 6: And I think this is changing the game and opening
28:09
Speaker 6: up those opportunities.
28:10
Speaker 8: One of the things you said, and that's extremely important.
28:12
Speaker 8: It is like even if it's a small right, like
28:13
Speaker 8: one percent in equity. Right, let's say it's two hundred
28:17
Speaker 8: and fifty dollars, Like that's the initial investment to own
28:19
Speaker 8: a percentage, Right, that could turn into fifteen thousand, right
28:22
Speaker 8: if you if you had more, obviously it turns into
28:24
Speaker 8: more of a profit, but that fifteen thousand can be
28:27
Speaker 8: the startup for you to invest in something else, like
28:29
Speaker 8: your first piece of real estate or your first restaurant.
28:32
Speaker 8: How it may feel fit for yourself.
28:36
Speaker 3: It's a beginning, right.
28:37
Speaker 8: A lot of people think, like it's so small, I
28:38
Speaker 8: can't do it in Houston.
28:41
Speaker 3: Right.
28:41
Speaker 4: You said something earlier about it becoming a tech hub,
28:43
Speaker 4: like it's going to be the Silicon of the South.
28:46
Speaker 4: How's the vision for that, right? And who's ei the
28:50
Speaker 4: forefront of it are the people out here that are
28:51
Speaker 4: going along in that struggle with you.
28:53
Speaker 6: You can sense the kind of the fervor in the
28:56
Speaker 6: air of like, you know, this is exciting, right because
28:59
Speaker 6: Tip even with the investment, we got some new investors.
29:01
Speaker 6: Shout out to them, you know here in Houston that
29:03
Speaker 6: have typically invested only in you know, oil and gas
29:07
Speaker 6: and energy. So now to have some you know, innovative,
29:10
Speaker 6: fast growing tech company opportunities has been great for those
29:14
Speaker 6: you know, kind of traditional investors. But what I'm more
29:16
Speaker 6: proud of is that we can bring this opportunity to
29:19
Speaker 6: everybody from Third War to the Swat, you know, to
29:22
Speaker 6: downtown and the Gallery, anybody across the city, in the
29:26
Speaker 6: in the country, and really the world. That's the great
29:28
Speaker 6: thing about equity crowdfunding. Also, you can invest from anywhere
29:32
Speaker 6: in the world. I mean, we got investors in Canada, Australia,
29:35
Speaker 6: Africa that.
29:36
Speaker 3: Have come through in our campaign.
29:38
Speaker 6: And it gives everybody that opportunity to gain that equity
29:41
Speaker 6: we've been talking about.
29:42
Speaker 2: It's powerful.
29:43
Speaker 4: Man.
29:43
Speaker 2: They weren't thank you for coming in. We appreciate you.
29:47
Speaker 7: My graduates from my school being forced back drop. Mike Dropp, you.
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