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Chapters:
- The characteristics of main-street Reg A+ investors
- Marketing costs – building a large follower base reduces expenses
- The best places to run advertisements for your Reg A+ offering - SEC rules for running ads
- Advantages of Series Reg A+ offerings
Disclaimer:
The content in this webinar is not and shall not be construed as investment advice. This information is meant to be informative and for general purposes only.
MSC is not a law firm, valuation service, underwriter, broker-dealer or Title III crowdfunding portal and we do not engage in any activities requiring any such registration. We do not provide advice on investments. MSC does not structure transactions. Do not interpret any advice from MSC staff as a replacement for advice from service providers in these professions.
Rod Turner
Rod Turner is the founder and CEO of Manhattan Street Capital, the #1 Growth Capital service for mature startups and mid-sized companies to raise capital using Regulation A+. Turner has played a key role in building successful companies including Symantec/Norton (SYMC), Ashton Tate, MicroPort, Knowledge Adventure, and more. He is an experienced investor who has built a Venture Capital business (Irvine Ventures) and has made angel and mezzanine investments in companies such as Bloom, Amyris (AMRS), Ask Jeeves, and eASIC.
www.ManhattanStreetCapital.com
Manhattan Street Capital, 5694 Mission Center Rd, Suite 602-468, San Diego, CA 92108.
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So now I'm gonna touch, I'm gonna move over to how to market your Reg A+ especially in the context of a series offering, but not exclusively then. So one thing to know is that most of the main Street investors who engage and they are entertained by that want to, that choose to invest in a Reg A+ are optimists. It's a completely different thing than institutional investors. And many accredited investors, wealthy investors tend to have so many options before them. They tend to be more skeptical, which is fair enough. So to give you an idea of what, I mean, we've had days where advertising outreach in social media drew in investors to a particular offering that was put together well, and they looked at the offering page and they liked it enough that they clicked the Invest Now button, which we have on our site, of course.
And we asked them for their email and their phone number. They provided that information and then went on of the people who clicked the button and gave us that information. We've had days where 70% invested on their first visit. So, you know, when that happens, we're dealing with optimists, right? We are dealing with optimists and I, I see a lot of that because I monitor the email traffic going to our companies, our client companies, CEOs and their other team members to make, to make sure that they know how to answer those questions and make sure that they are answering the questions that come in. They're not that many, but I pay attention to it. And it's amazing to see how optimistic some of these folks are. So a company that never talked about doing a public an I P O anywhere, never mentioned it, never hinted at it.
Jim who invested three months ago will be, will fire off an email to the CEO asking him, you know, when's the I P O? You know, so that's an optimist. So just know that because it makes a very big difference as to what kinds of offerings can succeed in a, in a mar in a low-cost marketing way. Main street investors, 60%, 70% of the investments are made on a smartphone. Apple, obviously an Android on a tablet and a PC as well, you know, one or other of the computers. But mobile phone is the dominant. 55% of investments are made by debit credit cards and ACH is another 40% and the rest is checks and wires. And institutions do invest these days at Reg eight plus that, that, that is new in the last two years. Continuing on how to market. If you have a established brand or if you are a social media influencer, if you have a lot of followers, then the cost of outreach to your followers and fans, it's drastically lower, which can make a Reg A+ offering and an extremely cost effective way to raise money.
And that's one of the reasons I chose to put this Reg A+ webinar together is because it's so cost effective when all you have is the legal filing and the audit and you know, some other miscellaneous fees, but you're not spending mega bucks to bring in every investor because you've got a large fan base. So you can bring them in with your own communications. So that's a fantastic, a fantastic thing. I think the lowest cost Reg A+ that we've done so far we're, we're, we're helping a client was a biotech company where their total cost of capital was six and a half percent, but that included all of their advertising expense, all their expenses for their Reg A+. So very exciting delivery in that case. But if they had been dealing with fans, that could have come down to two and a half percent, could easily have been a two and a half percent total cost of raise.
I mentioned social media advertising is the most effective outreach vehicle to people who don't already know your company. That when, when we need to do that, that's the most effective vehicle. The ads have to have a clickable link in them so that the investor can see what the terms of the offering are, what the offering circular, which is what it's called when the offering is qualified. The SEC uses the term offering circular with all the details and the audit numbers in them and so forth. And the s SEC's restrictions on the, the kind of advertising you can do are mostly reasonable. Nothing terribly unexpected there. You can't use hype, for example. You know, you can't introduce a new product and say it's gonna replace everyone else. You know, we're revolutionizing the market. That's two grand acclaim.
An advantage of a series offering is that having pinpoint precision, this is the building we're offering, this is the vintage car we're offering, this is the racehorse we're offering is much more motivating. It's much easier to get investors. They, they're when you are, when they're narrowing in on something they really like. So that makes for lower cost marketing itself. And of course, in the case of many alternative investments like jewelry and art, select art and select jewelry and select vintage cars, they're appreciating assets with a very strong track record. So the track record speaks for itself and that makes it much easier to market the offering and raise money because people can see, oh, if I buy this, this diamond and this quality, I can see what the benchmarks have done for diamonds at this quality. So that makes it less expensive to market.
The nature of being a series of separate little offerings, they're much smaller, so they run out of capacity quickly that motivates, that makes it easier to raise money. And the fact that a lot of them are attractive investments that already have a following, you know, so playing cards, trading cards, you know, vintage cards for that matter, they already have a following. So it makes it much easier to to, it makes it much easier to market the, the, the raise. Having an app helps me these days. Having an app is a good thing for this type of raise for communication, better communication with the investors and engagement offers, because that engagement is such a valuable thing.
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