#106: How to Crowdfund Millions with Cecil Robles

Intro Hook (0:00) Sean Weisbrot: Why would a company choose to go through a Reg A fundraise? Cecil Robles: For the right company, it is a very good way to marry your customers to your company. So, if a company has a lot of customers, then those customers can be converted into actual investors and so, it’s a great way for a company, that is again, the right company the right model, to turn those already raving fans and buyers of their products into actual investors of the company. Guest Introduction (0:34) Sean Weisbrot: Welcome back to the We Live to Build Podcast. I’m here today with Cecil. We’re gonna be talking about fundraising, most likely, and probably specifically Reg A based crowd funding. So, that’s for you guys in America. So, Cecil is a serial entrepreneur and investor with twenty years of business and brand building experience. He’s currently the chief marketing officer and co-founder of NFT IQ in Enterprise Data and Web3 Technology Company. Cecil specializes in developing corporate strategy and effective marketing campaigns that illicit response from the target audience. As one of the first to tie blockchain technology to equity fundraising, he’s helped startups and growth stage companies raising fifty million dollars, although he says it’s probably more right now, something like seventy-five million, and from more than over twenty individual investors. Cecil is passionate about his family, food, marketing, and innovative technology. So, thank you for taking the time to talk with me, Cecil. I appreciate it. Get to know Cecil (1:27) Sean Weisbrot: Before we begin, why don’t you tell everyone just a little bit more about your background and what led you to why you wanted to help companies with their fundraising? Cecil Robles: Yeah, so I’ve been a serial entrepreneur. I mean my entire life. I’ve never had a job. I started my first business when I was nineteen years old. I grew up in the construction business, and so, I started my first construction business basically right out of high school and then, you know, did that through college, and then, you know, have ever since either had my own businesses or, you know, been a part of starting up businesses over the last twenty years roughly. And so, through that, you obviously gain a lot of experience, a lot of know-how, you know, for me, it was really about taking, you know, what I’ve been able to learn and put together from, you know, business strategy to marketing to fundraising and help companies that I’m passionate about and really be able to, I guess, what I would call, scale something rather than just building one company, helped build a hundred companies, get a piece of a hundred companies and you know, build a personal portfolio were not only do we generate income from it. But we also, you know, participate in the potential upside of these businesses and these companies as they grow, and are able to help them through the life cycle of again, and anything from business strategy to product development, to marketing too, which is a big part of it, fundraising and taking them through the fundraising life cycle, whatever that may be for that specific company. And it could be going from you know, a seed round all the way to, you know, a pre-IPO or IPO listing. So, that’s kind of, that’s kind of my background and you know why we started this particular consulting business. What is crowdfunding? (3:28) Sean Weisbrot: All right, so I do want to mention that you were helpful with EI Ventures. I’ve interviewed two of their team members already. I wasn’t aware that you helped them until like yesterday. So, that’s cool and will definitely, if you’re allowed, to talk about maybe some of the details of that fundraise, but we’ll get into that a little bit later. Before we do that, I would like to cover two definitions for people. The first one is what is crowdfunding? Cecil Robles: Yeah, so there’s two things. There’s two types of crowdfunding. I mean you have like what you see on Kickstarter, where a company goes on there and they have a particular product idea, or maybe they have a product that’s currently in production or manufacturing and they want to iterate that product or they want to get the funds to actually build the product and release it to market. So, that type of crowdfunding you’re actually putting dollars in to get a future product or future perk or a future benefit. You’re not actually investing in the company and then, so that would be more like product crowdfunding. And then, there is what you call equity crowdfunding, and equity crowdfunding is a regulated, regulated crowdfund that essentially companies used to raise money for their company and that money then can be used to hire, it can be used to manufacture products, whatever the company has for their particular roadmap and whatever the use of funds are that they’re, that they’re needing. They can then use that money to accelerate the growth of their business and in exchange for either equity or future equity. So, there are a number of ways to structure these types of equity fund raise. If you’re doing a general crowdfund, you know you’ll generally do it, most companies will do it with like a future equity, like a safe. If you’re doing like a Reg A, then it’s a you’re generally selling stock in the company. Difference between Reg A and Reg D (5:25) Sean Weisbrot: Now, I’ve also heard of something called Reg D. What’s the difference between Reg A and Reg D? Cecil Robles: Yeah, so Reg D 506-C is a, it’s a way for companies to raise money from accredited investors only. And so, when you do crowdfunding, a company can raise money from both accredited and non-accredited or retail investors. And so, accredited investors, the definition of that, according to the US Securities and Exchange Commission, is having two hundred thousand dollars in income individually for the last two years or three hundred thousand dollars filing jointly, and or a million dollars net worth, excluding your primary residence. So, when in a Reg D, you’re only able to raise money from accredited investors, so investors that meet that particular criteria. Now, there’s two types of Reg D’s. You have a Reg B 506-B, which basically doesn’t allow you to solicit, or general that doesn’t allow for general solicitation. So, general solicitation means any type of advertising scheme that you may put out there to find investors that you’re not familiar with or you don’t have a current relationship with right now. So, in a Reg D 506-B, you’re not able to solicit investors that you don’t currently have a relationship. You either have to engage a broker dealer who has a network and a relationship with investors of that particular caliber, or you have to have a personal relationship or some kind of a relationship with anybody that you’re talking to, or just talk one to one with people, versus again being able to solicit that offering, you know, create advertising online for it. So, Reg D 506-C allows you to solicit that to the public, you know, do general solicitation. So, that’s any type of advertising that you can think of, direct mail, phone SMS, you know, any kind of online media advertising strategy, email campaigns, so on and so forth. You’re able to do that through Reg D 506-C. The difference is that in a B, individuals that say they are accredited; all they have to do is check a box and say that they’re accredited. You don’t have to verify their information. In a Reg D 506-C, if you’re advertising to investors that you don’t have a relationship with, those investors then have to go through an actual accreditation review. They have to prove that they’re accredited, and that can happen through a number of different ways. It can happen through providing their tax returns, getting a CPA letter, you know. It can happen through providing their W-2, an income statement or a statement of their net worth. So again, two different types. But you know, and I don’t want to get too confusing or too ingrained here on this subject, but that’s what it is. Sean Weisbrot: So, I can understand why you liked Reg A. It seems like it’s a lot less of a headache. Cecil Robles: Definitely is a lot less of a headache, for sure. Well, we’ll say it’s a less of a headache from the standpoint of raising the dollars. It’s not necessarily less of a headache from the standpoint of what you have to do to get there, the cost factor, as well as the reporting factor, the reporting requirements afterwards. So, it’s not again, for everybody, and you know, it’s not like this this thing that probably every company wants to do, but from a fundraising standpoint of actually raising dollars for your company, and getting investors in, it’s much easier. Why go through the Reg A fundraise route? (9:05) Sean Weisbrot: So, I know you already kind of explain this, but I’d like to hit it from a different angle. Why would a company choose to go through a Reg A fundraise? Cecil Robles: Sure, I mean there’s a number of reasons. I would say the first reason that a company would want to do this is to, you know, stay in control of their company and to, you know, maintain, probably as a founder, more equity in the company. When you fundraised through venture capital, there’s generally a lot of caveats tied to you getting that money and as a founder, you can give up a significant amount of control of your company. You generally have to give away board seats. You will likely have to give up a lot more equity than you probably want to. And so, I’ve met founders that, by the time that they’re actually ready to go public, they’ve fundraised so much through VCs that they only own, you know, a couple of percent of their company. And that to me, after having built a number of companies. That to me is a travesty, you know, for somebody who has taken the risk to start something from scratch, you know, birth something and then, you know, end up with a lot less reward at the end of the day. So, I think that’s one reason that a founder particularly would be interested in this. The second reason, there’s a number, but the second reason I would say to is that, for the right company, for the right company, it is a very good way to marry your customers to your company. So, if a company has a lot of customers, then those customers can be converted into actual investors. And so, it’s a great way for a company that is again the right company, the right model to turn those already raving fans and buyers of their products into actual investors of the company, which then marries them to that brand and that company right, and allows them to tell everybody that they know about it. Word of mouth is still the most powerful form of marketing that we have and advertising that we have, and so for again, the right company that is a good brand fit for that, I think, is something that could be extremely powerful. And then I would say the third thing probably is that it gives companies a pathway to a public listing if that’s the direction that the company desires to go or it’s the right fit for that. It gives them a direct pathway to a public listing. That’s much more cost effective and not necessarily easy to do, but it is more cost effective, and it allows them to go public on their own terms, and I think that’s also important with a large investor base, right. So again, you know, those are three things that I think companies should consider, you know, a Reg A for. It’s not the right fit for every company. When should companies consider going Reg A? (12:11) Sean Weisbrot: So, if a company would be interested in going this route, when should they start thinking about it and when should they execute on it? Cecil Robles: Sure, well, I think that for most companies they should probably test the waters with a Reg CF, which is a regulation crowdfund. So, there’s differences. So, the Regulation Crowdfund, you you, are either only able to raise one point, seven million, if you don’t have audited financials, or five million if you do have audited financials. So, it’s a much smaller offering than a Reg A. It’s much more cost effective. You’re not going to spend nearly as much money. So, I think companies should take and test the waters doing that before they go Reg A and if they have success doing that then and if they’re ready for, then a Reg A, you know, could be a next step. Now a Reg A, to get it actually, so another difference between Reg CF and Reg A, is that a Reg CF does not get qualified by the SEC. It’s what’s, it’s what’s called an exempt offering. So, all you have to do is you know, all you have to have either reviewed or audited financials and then you have to fill out what’s called a form C and file that form C with the SEC. The SEC doesn’t really qualify it, they do review it and then it’s put on file with the SEC, and so, it’s a much easier process versus a Reg A, which you actually have to get qualified by the SEC and it’s probably gonna cost you three to four times as much money to actually get it to where you can actually raise money. So, I think a company that’s looking at crowdfunding for a vehicle to raise money should probably do a Reg CF before they do a Reg A, unless, again, they’re well capitalized, they have a big customer base, it’s in a hot industry and market, and then you might skip that step and go directly to a Reg A. What are the qualifications for Reg A? (14:10) Sean Weisbrot: So, you’re just talking about qualifying for Reg A. So, what do you need to do to qualify for Reg A and how much would it normally costs for that qualification? Cecil Robles: So, you have to have fully audited financials. They don’t have to be for any particular length of time. You know, I’ve seen companies that just start three months ago, you know, and have three months of financial history qualify for a Reg A and do an audit on their financial history. So, you have to have fully audited financials that have to be performed in accordance with US financial guidelines. So, generally their PCA will be auditors. So, they’re there, they have a certain qualification. It doesn’t have to be at PCAOB audit, but it has to be done by an auditor that can do that. So, that’s a pretty costly task generally. You know, companies can spend anywhere from twenty-five all the way up to a hundred thousand dollars, I’ve seen, to get an audit, depending on how complex their books and their financials are. Right. So, so that can be very costly if they don’t already have that done. And if they’re not doing that, and then you have to keep that up every year. So, once you actually do raise money with the Regulation A, you have to keep that auditing process up every year. And so, the cost generally will go down relative to how the company grows. If the company has explosive, explosive growth and starts all these new divisions and everything else, then of course the cost can add up to that. Right. So, you have to be ready and prepared to pay those costs on an ongoing basis. Number two, you have to file what’s called a Form 1-A, and a Form 1-A is basically what the, that the filing document that the SEC will review, and you know, that can cost again, depending on how complex the businesses and how complex the offering is. You know, that can range anywhere from, you know, fifty up to a hundred thousand dollars, and so and then again, there’s continued, there’s continuous filing requirements once you actually do get qualified. Then you submit all of that packaged information to the SEC. The SEC reviews it and either they’re gonna say it’s good to go or they’re gonna come back with what they call comments, and then you have rounds of comments that come back between your legal team and the SEC. They may comment on your financials, they may ask questions about, you know, your business plan and so on and so forth, and so all of that has to be buttoned up before the SEC will actually qualify it. Once you get the qualification, then of course you can raise money, and that’s not even talking about what you need from a marketing, marketing and advertising budget for media, things like that to actually make the campaign successful, and there are no guarantees, right. So, you might do all of this and nobody likes it and they don’t want to invest in your company, right, and so now, you’re out a couple hundred grand and you have nothing to show for it. Most of the time that’s not the case, especially for people that you know, that we work with on this. But you know, it has happened before and so, that’s why you need to go into it with, you know, eyes wide open, knowing exactly what you’re getting into. How long does it take to file for Reg A? (17:27) Sean Weisbrot: I can understand why people like the idea of ICOs and NFTs, right, and crowdfunding, just on Kickstarter, because this sounds like it’s a lot of energy and effort. I’m curious, real fast, how long would it take to do an audit and to fill out the Form 1-A and to submit it to the SEC? And you know what, what’s the typical process for handling? Your time length for this on average? Cecil Robles: Yeah, so, I mean, look, this is a new thing, right, and when I say new, I mean, you know, the traditional way of raising money through venture capital, through private money, through private equity, things like that. I mean that’s been around for, you know, for decades and decades. So, this is a new thing, in terms of, you know, fundraising for companies. I mean, it really only came about Reg A in 2015 through certain laws being enacted from the jobs act that was passed in twelve and you know, not a lot of companies have done it up until I would say, around 2019, 2020, so it’s very new. So, the service providers, like the law firms and the obviously, the accounting firms, are getting better and better and be able to do it, you know, quicker and quicker. And it depends on how ready the company is, right, like does the company need corporate clean up? I mean, there’s a lot of factors involved in that. But let’s say everything’s buttoned up, everything is good, the company’s great, they’ve got their business plan dialed in, they’ve got their financials dialed in. You know, an audit can usually take six weeks, four to six weeks for that, and then the same thing on you know actually drafting the form 1-A. You know, it’s generally a hundred pages or more of a doc, of a legal document. So, drafting the form 1-A, you know, that’s gonna take, you know, four to six weeks. Again, that’s assuming that the company has everything buttoned up, and then you have the qualification process and again, if it’s done right and proper, you may come back and have zero comments, and that would be a best-case scenario. But you know, you’re probably looking at two to three months to get even qualified, and sometimes longer. I mean with EI ventures it took a year to get qualified. Being well-capitalized (19:32) Sean Weisbrot: Wow. So, yeah, earlier you were talking about needing to be well capitalized. I can understand this. That’s because, to add to that, it’s not just the cost of the audit and the form 1-A and dealing with the lawyers in the SEC with the comments process, but it’s also the team salaries that you’re paying while you’re building this product and all of this stuff, like it could easily be a million or more dollars, like from start to finish before you’re ready to actually market. Cecil Robles: I wouldn’t say that, it’s much less than that. Sean Weisbrot: Assuming salaries and things like that. Cecil Robles: Yeah, yeah, yeah, yeah, so, that’s why I’m saying, like this is not a right fit for every company that you know, a company that’s just bootstrapping and starting up and hasn’t released a product yet or something like that. It’s probably not a great idea for them to get involved in this process. That would be more like, for regulation crowdfund, you know, or I would suggest going out and angel investing or seed investing, and doing a private round, you know, if you were going to do that, getting private, you know, private, private money from you know, groups like ours, companies like ours, or others that are out there to be able to fund this type of a process, and then go and do a Reg CF, and then go and do a Reg A or do a Reg D, you know, private money type thing where you’re selling accredited investors only, which is going to be less costly as well. So, I mean there’s again, this is why I call it the life cycle of fundraising, right, because you know, again, it’s different for every company, number one, and you do need to have a strategy of how you’re going to do this, especially if you’re a startup without any income, your pre revenue, you know. Yeah, how do you keep it going without any revenue? Right, and that’s all. That’s why I’ve always liked to build companies that have revenue built into them right away, or at least as soon as possible. Because, you know, if you don’t have a good capitalization strategy, then you know you’re gonna find it very hard to get that off the ground. And so, you know, that’s why I always tell people go talk to your family and friends and see if they actually buy into the idea. You know, if you tell somebody your idea and they’re not leaning into the conversation, you probably don’t have a great idea that somebody wants to invest in. Simple as that. Sean Weisbrot: Have you ever worked with someone who had a patent? Cecil Robles: Oh, yeah, yeah, definitely. Yeah. I mean we’re working with the company right now that has over a hundred patents filed and thirty-three granted right now. Sean Weisbrot: Geez. Getting SEC approval (21:58) Sean Weisbrot: So, I guess, the where I wanted to take that was, does having a patent to make it easier for the SEC to approve it or do they don’t really care? Cecil Robles: No, that doesn’t matter. I mean, it really is in your business plan. It really is, and how good the attorney and the law firm is that’s doing this, and it’s in how, you know, good you present the package, essentially. I mean that’s really what it boils down to, and most that go now, get qualified. I think there’s somewhere around in 87% and 91% of Reg A’s that actually get to the point where they’re filing with the SEC that get qualified. Don’t hold me to that exact number. It might be different from the last time I checked, but I think it’s somewhere around there right now. So, you know, there’s a very slim chance, I mean there is a chance, but there’s a slim chance, that a company doesn’t get qualified. Sean Weisbrot: Have you worked with the company that the operations, the operations company was incorporated outside of the US. Cecil Robles: So, you can’t have that. You can’t have that with a Reg A or even a Reg CF. The company has to be incorporated inside of the US for you to use any either one of these types of offerings. The team can be outside of the US, but as far as the actual company has to be in the operating company has to be in the US. You can’t use this to raise money into a shell company here in the US and then Siphon funds off to a company that’s offshore either. Sean Weisbrot: Damn. Cecil Robles: That’s a no-no. Sean Weisbrot: So, the reason I was asking was my company is incorporated in Singapore and sure our investors are all in Asia except for one in Switzerland, and they had recommended me looking at a crowdfunding round and my response to them was, one, we don’t have enough money to keep everything running and pay for this stuff. But this was before I even knew the numbers. I just assumed it was gonna be, because I was thinking about it from the point of view with the marketing would be a lot which we’ll talk about a little bit. But that, one, we didn’t have a company in the states and if we did, I wasn’t sure I wanted a company in the states. Cecil Robles: Sure, yeah, yeah, yeah. So, I mean your best bet there would be to do like a Reg D-506C, something like that, where you can still advertise. It’s again much less costly. You still have to create what’s called the PPM, a private placement memorandum, which can be a hundred pages as well. So, I mean there is legal costs there, but you don’t have to do any financial audits, you don’t have to you know, do anything like that. Generally, you’ll just have like a pro forma set up, you know, five-year proforma, and you know your PPM, your business plan, your pitch deck and then you go on a road show or you do online presentations, you know, to investor audiences, and so that would probably be the best way to do that. But again, you know, it’s difficult for foreign companies to come into the US and raise money from US investors because US investors want to know that they have some kind of a liquidity events. This pump company going to go public in the US and you know, am I gonna have to figure out a Singapore Stock Exchange, you know. I mean. So, things like that, you know, are tough challenges to overcome. I would just say. Sean Weisbrot: For sure. Where can you launch a crowdfunding campaign? (25:22) Sean Weisbrot: So, what are some platforms that you could launch Regulation A based crowd funding campaign on? Cecil Robles: I mean, there’s a lot of crowdfunding portals out there. I mean, you know, you can use, any number of them. I mean from We Funder to Republic, to Start Engine to Seed Invest, I guess those are some of the bearer ones. I think there’s probably over now, close to a hundred fundraising portals out there. We do it in a different manner. We don’t use those portals, not saying that they’re, you know, bad or good or anything like that, but we like to control the data that, you know, that when we were, when we run a deal, we like to make sure that we control that data, that we’re not sending a hundred thousand dollars’ worth of traffic and media into a portal that is then going to have the opportunity to sell a hundred other deals. You know, that and get distracted from the deal that we’re trying to raise money for. Yeah, so, in terms of when you drive traffic to a page that, let’s say, is set up on a one of those platforms, you are then putting your traffic, your potential investors that you’ve gotten interested in investing in your deal on that platform. There are a hundred other deals that are running, right. So, do you want to spread those dollars out through all of those deals, while if you’re a company that is putting actual advertising dollars out there, chances are you don’t want to do that, but that’s what a lot of companies do. Now, there is a benefit to launching on those platforms in that they have an audience. Right. So, if you put your deal up and it’s a hot deal. Then the audience may be attracted to it and they may come and invest in your deal if you get some traction from it right. So again, you know, companies don’t want, for me, the companies that we’re spending money on advertising and media to raise funds for and with conjunction with we don’t want to drive that traffic. So, we use a couple of different companies to run the back-end process for us. So, they essentially have the back-end, takes all the investor data in and does everything digitally on the back-end, so collects the signatures on anything that needs to be signed digitally and then also collects the funds through either wire transfer, ACH or credit card, and then manages that investor in a back-end portal, that investor database and a back-end portal, and distributes funds out. Does KYC and AML, let’s know your customer and Anti Money Laundering what you have to do when you’re raising funds and so it handles all of that on the back-end and then we build specific funnel, top of funnel entry points on the front-end that may drive into a live or recorded webinar. It may drive into an investment research report on the company. It may drive into just a landing page that sells that that tells the pitch and tells the story and sells the deal. It might drive to a particular video of the founder talking. So again using, you know, digital marketing and advertising to control the top of funnel or the front-end of the process, and then having a back-end portal where we’re collecting all of that data. The company is also collecting all of that data. So now, whether the person invested or not, they’re able to follow up with them on an ongoing basis and hopes that they will invest in the future or in or in future rounds. And so, for us it’s really important to control that process and to direct investors’ attention to that specific deal with zero other distractions, right, because people are already distracted enough, so when you’re trying to get them to look at a deal, you don’t want them flipping through a site and looking at a hundred other deals. So yeah, that’s just from our perspective. And so, we use, we use a technology on the back-end called Deal Maker, and we use others. There’s others like Issuance and there’s Core Connects, and so there’s a various other technology companies that do this as well. Sean Weisbrot: But you didn’t develop this yourself. Cecil Robles: We did not develop the back-end portal ourselves. I don’t have any interest in running, running that that particular type of a platform. Sean Weisbrot: Okay, I remember when I was involved in ICO. I don’t even really want to talk about this, but when I was involved with ICO stuff many years ago, there were some that had something very similar to this, actually. One of them, called Presearch, actually developed their own and they ended up managing the KYC and the AML and the coins being sent out and all of that. I don’t know if you’ve heard of Presearch. I don’t want to talk about them, but I’m not sure if you’ve heard of them. They raised up ten million or so. Cecil Robles: Yeah, and I’m familiar with, you know, technologies that were similar back in that in that particular time. Yeah. Sean Weisbrot: So, I thought it was really cool actually. So, I’m surprised that you don’t have your own thing, but I understand if you don’t want to deal with it. Fair enough. Cecil Robles: Yeah, I mean you know, it’s a big undertaking, and you know. No, but our focus is just on really, you know, is on really capturing, you know, consulting and equity deals that we really believe in and helping them, you know, go the distance and not having to deal with, you know, the back-end technology components of it, capturing the data. That’s the most important thing to me. Why did Cecil chose not to deal with fundraising platforms? (30:51) Sean Weisbrot: Right. How did you come to the decision that that was the right way to go, is using this thing like Deal Maker or something, and like not using these on funding campaigns, because you say, you say it is, if like it’s so ingrained for you. But like what you know? Did you start off with one of these platforms? And that’s actually this is horrible. Why am I doing this? Like, how did you come to that? Cecil Robles: Yeah, no, I mean, yes, I have help companies that I’ve been a part of raise money on those platforms in the past and again, I think they’re great. I think they’re great for the right business, you know, coming in that doesn’t really know anything about this and, you know, they’re able to get a campaign up for, you know, relatively inexpensive, you know, relatively inexpensive cost to the company. And so, you know, if they have, you know, a hundred thousand dollars of funding, let’s say, they can easily do this. You know, for me I’ve been in digital marketing and in Direct Response Marketing and advertising for the last twenty plus years. I mean I was in my mortgage company, I had probably one of the first websites in Houston that actually captured leads online for mortgages that we were selling. So, you know, I’ve been I’ve been a part of that my entire life and I really do believe that the real value, a big part of the real value of a business is in the data that it’s able to capture. And so, to me it was very important to be able to control that process. And especially when you’re putting out advertising dollars and you want people to you want to elicit response from people, you want them to go through a very focused pathway or funnel or pipeline and not get distracted by too many things. So, it was an immediate for me once I kind of saw this model of raising funds online. It was really an immediate for me of like why would I want to spend a hundred grand to drive, you know, traffic to somebody else’s website where they’re collecting all of the data and using that for opportunities that are not my own, right? And so yeah, I mean I call it, you know, being selfish, but that’s basically what drove my decision-making process. Sean Weisbrot: Fair enough. Now, I interviewed a guy named Adam Robinson and he has a company called GetEmails.com, and what they do is, I think, something that you might find very interesting, which is they can tell you the emails of the people that view your website, even if they don’t fill out a form. Cecil Robles: Sure, yeah, we actually have that technology. We own the technology and we own about four billion data points and records. We also have all the PII data on it, all the hashed email data, and so, yeah, it’s a pixel you installed on the website and then you can get all of that information. It’s first party data. It’s very difficult to build email servers to actually email those people, you know, that’s kind of it’s not spam, but it’s skirting the line in my opinion. So, I think yet you can use that data for some really cool stuff, using some AI stuff and then using obviously, retargeting is a big part of that as well. So yeah, I mean there’s a ton of stuff you can do with that data and it’s amazing and it’s great, and you know, in a certain sense it’s cutting edge because, you know, again, you’re able to follow people around. It’s, I guess, a term that somebody else coined, not me, but it’s called like being omnipresent, right, like you want to, you want to show up everywhere that person is, right, and that’s really the psychology of selling online today. Blockchain and NFTs for businesses (34:29) Sean Weisbrot: I’d like to turn to blockchain and NFTs. I know it’s part of your portfolio or your bio, it’s part of your career experience. We both, you know, have been a part of them. So, I’m curious to know how you think blockchain is affecting or changing crowdfunding. Cecil Robles: Well, I don’t think it’s changed anything yet in that particular respect. I think that there’s the potential for it to change the way that companies distribute equity, you know, in a distributed ledger, you know, where it’s, you know, a trustless environment. Where you know the equity that a person holds is secure. I think that’s one way that it’s already happening. So, there are transfer agents that are out there that are already digitizing securities on the blockchain, which I think is something that, again from a record standpoint, from a record keeping standpoint, is great. I think the other area that, you know, there could be some innovation is in fractional ownership. You know, when you’re buying a stock, you can fractionalize that stock, but in the current system it’s very difficult. So, let’s say a stock like, you know, Berkshire Hathaway, which Warren Buffett will never get behind anything blockchain, I doubt. But, let’s say a company like Berkshire Hathaway where, you know their Class A shares or and I don’t even know what it is right now, but let’s say there are three thousand dollars, you know. Or no, I’m sorry, let’s say the two hundred thousand dollars right, because I think that’s where they’re Class A, two through two hundred something thousand or three hundred something thousand. Again, I don’t I don’t follow Berkshire Hathway, but let’s say, they’re two thousand dollars a share. Right. Well, you could fractionalize that. That’s why they created the B shares, right, but you could do that with just the A shares. You wouldn’t have to go through the process of doing that same thing with, you know, any kind of you know, larger, you know, investing in a portfolio of paintings, right, like actually being able to fractionalize that ownership. I think that’s another area that you can see some innovation in right now. And so, those are those are probably the biggest areas at this point, I think that we’ve seen in the future what the potential is. I think the potential is for companies to control the investment process through using blockchains and NFTs and really baking their shareholders into community rather than just being a shareholder, putting the thing on a stock exchange and that’s all you get from it, but actually building in community perks, discounts, right directly into their shares, using NFTs and using blockchain technology. Sean Weisbrot: I think that’s really interesting you just said that. Because I thought about this about seven or eight months ago when everyone was like selling digital art. I’m thinking, what if I were to do like a crowdfunding where I give them NFTs and it gives them access to a community of other people. So, for example, our audiences, you know, for not for We Live to Build, but for my other company, Nerve. We’re building a B-to-B SaaS, and my assumption is the persona is a founder of a company. I could be wrong, but let’s say it is. Wouldn’t you want to buy the NFT to be able to access the other CEOs that want to try our product early because they were thinking, like you, that early adopters get access to the Beta version of the product where nobody else could because they don’t have the NFT. Literally use the NFT as a key to log in to the Beta. Give them permanent Beta access, permanent features that come out before you know. They get access to features before everyone else does, so they can provide your feedback, things like that, as well as a permanent discount on services. I was thinking is eight months ago for my company. Now, we still haven’t done it because we don’t have the finances to be able to do the marketing for it. And now, obviously the markets pretty shaky. I wasn’t thinking of adding an equity-based aspect to it, but it’s cool because I think NFTs do have the potential for that, because originally there were smart contracts and STOS security token offerings, but I think they’re overly complicated. I think NFTs actually could replace smart contracts and STOS or security tokens. Cecil Robles: So yeah, I mean, you know, an NFT really, at the end of the day, from a technological standpoint, is a token, right, I mean it really is that. And so, you know, there’s certain things that you can bake utility into that and to me that’s always been the play here. I’ve never, never really bought too much into the whole PFP profile picture, you know, JPEG artwork deal that’s gone on. To me, it’s always been about looking at enterprises, looking at businesses, and being able to find real utility that can add value to their customer, because at the end of the day, the customer is what counts, because you can’t count dollars without having customers. I can promise you that. And so, you know, how can this really add value to their customer? Number one, how can this add value to their business and make them more efficient in what they’re doing and provide another way for them to interact with their community and customers in a real meaningful way? And so, I think NFTs have that potential and they also have the potential to add revenue to the bottom-line. And they give the person that holds them the ability to sell those off in the future, if they don’t, just if they don’t want to be a part of the community anymore, they don’t want to, you know, own that particular thing they get and be a part of the company that they’re supporting with that, they can sell it off in the future. And so, to me that is something that, you know, can actually provide real utility and real value and something that these NFTs can be used for. They can also be used to collect data in a trustless manner, again, in a secure, trustless manner, where it’s completely 100% confidential, and you don’t have to share that information, you know, with anybody else you don’t want to, right, and so or you could share that information and they would be kept private, right, like the data would be kept private, but you could still share the information. So, I think there’s a lot, a lot of opportunity and I think we’re just getting started in this. I think it’s you know, again, I think this is something that is going to be developing for the next ten years. But I think, you know, it’s definitely something that that I’m focused on and you know that we have businesses that are focused on it’s not a 100% percent of my attention, but it is there. Sean Weisbrot: I’m curious now I’ve purchased only one NFT and I purchased it because it was a key to enter a community of other entrepreneurs. It was expensive, but it’s worth, it’s been worth it. Right when you in the current iteration of NFTs, there are marketplaces where you basically can buy and sell, and so the price of the NFT is set by the people. Cecil Robles: Sure. Sean Weisbrot: If you’re a private company, it doesn’t feel like it’s a good idea to have NFTs on an open marketplace because if you’re trying to set your valuation and you’re trying to talk with other potential investors or whoever, if you can’t control that price floor or that price ceiling or whatever, then yeah, how do you manage that? Cecil Robles: So, that’s where what we’re developing and what we have developed comes into play. My company, one of my companies called NFT IQ, we’ve developed some technology to allow enterprises to control that. So, they can control the wallets, they can control the resale aspect of it by having their own community and marketplace and so. And it’s custom branded for them, right. So, it’s like you’re not losing brand, you’re not sending your data off platform. Those are very important things, and so, you know, they’re able to actually control that reselling process. They’re able to control what’s known as a secondary market and continue to generate, you know, royalties on, you know, any future sales going forward, and so. So, I think that’s part of the solution, is companies want to own their data. They don’t want to be giving it out. They don’t want to, you know, solicit their customers privacy, and that’s really, really important, and so anything that we’re doing in regards to that is really happening on our tech stack with that enterprise is branding versus, you know, doing an open sea or something like that. Sean Weisbrot: Interesting. I’m glad you thought about it, because if you hadn’t, I was going to start thinking about it because actually, this conversation was like actually, so… Sorry, what? Cecil Robles: I said we’ll have to do a side conversation on, you know, maybe some ideas around how you can help us out. Sean Weisbrot: Sure, yeah, we can do that. Cecil’s passion for crowdfunding (43:42) Sean Weisbrot: So, is there anything I haven’t asked you that you would like to mention? Cecil Robles: Oh, let’s see. I mean, in terms of crowdfunding, I would say, you know, I really love the model. I love, you know, helping companies with this model. It’s a great, it’s a great thing to do. I mean, we’ve again, we’ve been able to you know, probably our most successful campaign to date as a company. You mentioned EI ventures, which was a psycho is, a Psychedelic Research and Development Company. And, you know, all told, I think we helped, we brought in over twenty-six million dollars between multiple campaigns. And so, that was a big one. And, you know, again, I think for the right company, for the right brand, it’s a great way to raise money. I would say this, I would say always, if you’re, if you’re an entrepreneur, and you’re building a company, I would say always have a strategy in your back pocket to be able to, you know, fund your company. You know it’s and educate yourself about it, read about it, you know, learn the different ways to actually raise money for your company. Learn about these laws. I mean these laws that have been enacted by the SEC are revolutionary. Because, beforehand, and I’d say the revolutionary from the company side, from the business side, but they’re also revolutionary from the investor side because investors in the past, retail investors, the average Joe, you know, who wasn’t an accredited investor, who wasn’t institutional money or didn’t have a million dollar check to give to a private equity firm or to a VC firm, they weren’t able to get into, you know, potentially life changing deals very early on. And so, these laws have really democratized the investing process. And so, for me it’s a benefit if you’re able to, you know, really have a strategy to, you know, hone in and find the right companies to invest in. If you’re an investor, I think it’s a great avenue to do it. And then number two, from the company perspective. I think it’s a great way to, you know, be able to raise funds and turn those investors into customers and vice versa, turn customers into investors. On the NFT front, I would say, you know, if you’re exploring this particular space, I would look for, I would look for projects that are actually creating real world utility for businesses that already exist. You know, for us that was our that’s our business model, is like to partner with companies that are already doing it, that already have a customer base, and come up with very unique ways to use these new technologies to impact and help their business, you know, grow, develop community and, you know, ingrain their customers and their clients, you know, into their community even further. Follow up with Cecil (46:26) Sean Weisbrot: So alright, great. And how can people follow up with you? Cecil Robles: They can go to, let’s see, they can go to genesisfinancial.com, if they want to, or they can follow me on LinkedIn. It’s I believe it’s at, that’s the easiest way. Just Cecil Robles at LinkedIn. Cecil Robles just LinkedIn, and Cecil Robles, and, connect with me on LinkedIn. Sean Weisbrot: Alright, great, so we’ll have all of that information on the show notes and thank you very much for your time and energy. I appreciate it. If you liked this episode, definitely tell everyone that you know who’s thinking about fundraising to listen to it, because it’s definitely eye opening for me. I didn’t know anything about this until now and I’m sure there’s still a lot more to learn. We didn’t even get a chance to talk about the marketing. I wish we had, but unfortunately time didn’t permit. So, thank you very much. Cecil Robles: Next time. All right, thank you, Sean. I appreciate it. Sean Weisbrot: Thank you for staying with us until the end of this episode. We know that you’ll like the other two that are on the screen now. The one in the top right is the episode that we think you would benefit from listening to next the most, and the one beneath it is what YouTube believes is also a really good choice for you. So, thanks again for sticking with us and we hope to see you on the next video.