094. The Power of Blockchain in the Private Markets with Oscar Jofre

Connect with the host:

LinkedIn: https://www.linkedin.com/in/brandon-e-jenkins/

Website: https://www.birchprosper.com/

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About the guest:

Oscar is a Co-Founder of KoreConX, an all-in-one platform for private capital markets that brings the infrastructure of the public markets to streamline the global private markets. He is a globally recognized, top-10 thought leader in equity crowdfunding, and is sought after for his perspective on blockchain, FinTech, compliance, shareholder management, alternative finance, and RegTech. Oscar also founded The BabelFish Corp, a software-as-a-service multilingual translation portal.

Connect with Oscar Jofre: 

Email: oscar@koreconx.com

Episode Highlights:

✔️ Leveraging blockchain tech to raise capital

✔️ How legislation increased investment accessibility

✔️ The role of regulations and securities law

✔️ The JOBS Act

✔️ Bringing transparency and efficiency to the capital raising world

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Transcript

SPEAKER_03 0:06

Have you ever wondered how new blockchain technology could transform your real estate investment journey? So I want you to picture this increased transparency, increased efficiency in capital raising, all thanks to new tech. But here's the catch without learning from fin tech leaders, thought leaders, like we are in our upcoming episode, you risk falling behind in a rapidly evolving industry. Imagine the missed opportunities and potential setbacks from not embracing this new wave of innovation. So that's why understanding how blockchain can revolutionize capital raising is essential for any investor looking to stay ahead in today's market. So tune into our episode and discover the game-changing advantages that await those who look to explore the potential of blockchain and real estate. So I want you to stay tuned, listen in, take notes, because here we go.

SPEAKER_00 1:02

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SPEAKER_03 2:10

What would you do if you had the freedom to pursue the things you enjoy the most? How incredible would it feel to have the resources to pursue your passions fully and live life on your terms? This is Brandon Jenkins, host of the Capital Stack Podcast and principal of Birch Prosperity. You might have heard that 90% of the world's wealthiest people attribute their wealth to real estate investing. Well, guess what? It's true. Investing in real property continues to be the greatest generator of wealth all over the world. So join us each week on the Capital Stack Podcast to hear about how commercial real estate group investment opportunities can help you reach true financial freedom and give you your time back. Hello, everyone, what's up, and welcome back to the Capital Stack. I'm your host, Brandon Jenkins. So as much as we love the private equities and private placement industry on this show, um, you know, we have to acknowledge that uh there's a need for more platforms that offer a streamlined solution for investors in an all-in-one type of format and that focuses on compliance and transparency, right? So um today we're going to have a conversation about that. And um, my guest for today is Oscar Joffrey. He's someone who can tell us um all about that. So we're we're we're excited to uh welcome to him to the show. So, Oscar, how are you doing today?

SPEAKER_01 3:23

I'm doing great. I love all the words, transparency.

SPEAKER_03 3:27

There we go. There we go.

SPEAKER_01 3:28

There we go.

SPEAKER_03 3:29

Yeah, all right. So Oscar is a co-founder of CoreCon X. It's an all-in-one platform for private capital markets. CoreCon X brings the infrastructure of the public, excuse me, the public markets to streamline the global private market. So it's a really cool solution. Um, he is a globally recognized top 10 thought leader in equity crowdfunding and is sought after for his perspective on blockchain, fintech, compliance, shareholder management, alternative financing, and reg tech. So a very, very heavy uh focus on efficiency, transparency, compliance, um, you know, which is again absolutely absolutely critical in this business. Oscar also founded the Babelfish Corp, uh, which is a software as a service multilingual translation, sorry, uh portal. Um, so there's plenty to discuss here. And again, Oscar, just really excited to have you on the show. Um, but why don't you kind of fill us in a little bit more on your journey, your your background, and kind of what brought you to uh to where you are now.

SPEAKER_01 4:27

Thank you. Thank you so much. Well, you know, it's um when you're an entrepreneur and seeking capital, you know what it's like. We're look turning every page we can in order to make sure the opportunities exist. And for me, it was about 14 years ago when I met David Wheel, the Ford, the father of the Jobs Act in the United States. Uh, he was former vice chairman of Nasdaq at the time. And literally, it's sort of like having someone completely, completely turn your whole life around from a perspective of everything you thought about how to raise capital or where capital is, just completely transformed. And what I mean by that is we've all been trained to only look at capital a certain way, which is okay, I have an idea, I gotta go to my family and friends. Okay, I'm not, I'm done. Okay, no, no, no. Now you can go to the bank. Okay, where do we go next? The venture capital, okay, and then private equity, and then co-public. And that's it. That's the only route that people have been given. What people don't realize is that the vast majority of individuals, uh, let's just take the United States, for instance, 99% of Americans have never been able to participate in the private markets. People go, What? That's right. 99% of Americans have never been able to give a chance to participate until President Obama in 2012 signed in the Jobs Act. Up until then, it was only the one percenters making money and getting fatter and richer and so on. And David Wheel made that happen. And what does that mean? It means that you now have another chapter in your journey of capital raising, and that's when it began for me. This new chapter that is opening, this new wave of capital raising is not going to be like any other form. What does that mean? It means that you're gonna need to change your approach because now I call it getting naked. Imagine being in a stage of 80,000 people and you're naked and you have to stand there. You can't hide, you can't cover anything up. You just have to stand there. If you're ready for that, this is the journey for you. So I know I'm being blunt about it, but it's it's one of the most exciting things that's happening in the, let's call it the 21st century for all of us, because it really is that exciting. And more importantly, for anybody who is of color, a minority, Latino, women, LGBT, whatever that minority class will be, you now have an equalizer. An equalizer, which means that who cares if the banks don't want your business? Who cares if venture capitalists don't want to invest in your company? You now have the ability to target 233 million Americans to invest in your company. I have to believe that there is like-minded people in there who believe in the same cause you do and who will invest in your company.

SPEAKER_03 7:49

Wow, absolutely. That's an incredible way to sort of summarize that. And at the end there, I think that's very powerful because you know, the reality is in the past, um, there were things that the different types of opportunities and pathways that were blocked, you know, for um underrepresented uh communities and minorities. And so that's just the fact of it. And so being able to have now this solution to that um opens up a whole new world of opportunities just incredible. So that but let's talk about sort of the mechanics of that just a little bit as well. And again, appreciate you for sharing kind of your journey. I appreciate that. So the mechanics of of of how it all how it works, you know. So, how does someone then um you know, in this new space tap into that 230 uh plus million Americans and say, listen, I have an opportunity for you. How do you how do you go about doing that?

SPEAKER_01 8:33

So the regulators, uh, when Obama signed in the Jobs Act, it took the regulators a couple more years, and the regulations are so smooth. I mean, there's no there's no better place in the world than to be in the US. Look, I'm Canadian, and I'm honestly telling you, there's no other place in the world that has regulations that are available to you today. And some of you listening may go, but I gotta do this, I gotta do this. You would have to do it anyway. So you need someone else's capital. You need to demonstrate your real. So, what are the things that they've done is they've made sure that when you are ready to raise this capital. So let's take one of the regulations called regulation CF or regulation crowdfunding, as it's known sometimes, you can raise up to$5 million every 12 months from anybody over the age of 18. Look at that, anybody over the age of so the regulators say you can do this in two ways. Number one, you can find any of the 88 platforms we have already authorized for you to go there and raise your money, or you can work with a FIMRA broker dealer and raise your money directly on your website. Okay, that's number one. Number two, we need you to have a lawyer to follow your form C. Number three, we need you to have audited financial statements. And this is the part where people go, but wait a minute, my business is brand new. How can you audit it? They can still audit it, it's just quicker. Um, obviously, for companies who already have a going concern, it's going to take a little bit longer, but that's one of the requirements. And then number four is you need an SEC registered transfer agent. So, what does that mean? It means that the regulators are giving you the ability to raise$5 million from anyone. They want some safeguards to make sure that the investors are being properly managed. Your book of records, meaning the ownership structure of the company, is being properly managed by a third-party company that is regulated by the SEC. So all of these pieces come together. So, what's the harmony in all of this? The harmony is that it allows you to do it over the internet. You can't be doing this with a phone, it's just not efficient. Imagine if people were investing as low as$10 in your company, it would have to be extremely efficient. So that's where technology comes in. You need an infrastructure to glue everyone together. So to be able to post your offering, to be able to find a lawyer and auditor very quickly. So you're not wasting time and effort and looking for these things. And then to find a broker dealer who will do this offering to do your compliance. And then for your investors to click the invest button on your website, to then invest$10 using their credit card or their ACH, and then immediately to see their shares showing up on their portfolio. All of that is an infrastructure that we built, but anybody else could have built as well. But we saw it years ago that this was the future of where we were going. And for companies, that's$5 million. There's another regulation that allows you to raise up to$75 million every 12 months. Whichever regulation you use, the same regulatory component pieces you need are there. They're there to protect you. And people go, but no, no, no, it's making no, no, no. They're there to protect you. Because see, if you do it wrong, you're gonna end up in prison. See, it that's what they do. They're not, they're not there to you know, take all your money. And you know, some people have said negative about lawyers and and auditors and all that and broke dealers. They're not, they're not gonna be your best friends, but what they're there to do is fulfill a regulatory requirement so you don't end up on the wrong side of the securities law. And and there have been many, as we all know now, that you know, when you want to go against the SEC, you don't win. You lose, you lose every time, you lose every time. 100% SEC, that's her track record. But overall, I mean, look at that. It doesn't matter if you're blue, black, white, yellow, it doesn't matter what color you are. Why? Because people are coming to you because they know you. It's it's one of the most exciting. Look, I'm an immigrant myself. I when I arrived in Canada, English was not my first language. I was I was born in Chile, so I might have not been born with all the issues, but I dealt with my own issues living in Canada growing up. And as you get older, you learn to understand that you feel sometimes that there's not enough choices. This to me was the look, it came to me at a time in my life when I was already in my late 40s. People would go, okay, well, that's you're already getting ending of your career. No, that's when that's when it's just getting started. I mean, that was 14 years ago. I was pumped in. I'm pumped even more now. Why? Because it's working. It's working. When when when you see an entrepreneur, you know, I have one, Reverend Dwayne Jones, I think that's his, and he has a company called I Have a Dream. I know it's he was part of the Martin Luther King movement. He's given an opportunity to raise money today in a way that, you know, prior to 2012, it was just in his head. He couldn't do anything about it. And if he even tried, he would end up in jail because it would have been illegal. So now he can get people. He's what he's trying to do, he's trying to help black Americans in the state of Illinois to be able to get mortgages for homes, which we all know there's a problem. So all the opportunities would have never existed, never had it not been for the Jobs Act. So we have to look at the tangibles of capital, job creation, but what is it really doing for the rest of us in in the market? And that's what excites me every single day about what's available.

SPEAKER_03 14:51

Yeah, absolutely. I think I think that's really exciting. And I want to, and let's let's talk uh kind of about the mechanics. I'll I'll mention something really quickly for the listeners that um, you know, for those of you who are trying to get into the active side or you're fairly new to the active um side of the business, by having a platform and a portal where um, you know, that's sort of front facing, facing or investor facing, um, you also have, in my opinion, it gives you a much more professional um look and feel to your business. You know, it's nothing worse than, you know, I've seen I've seen some sponsors uh on deals where they really don't have any kind of interface for an investor to go and um and interact with and kind of get a sense of who they are or to look at their deals or what have you. And it gives you a different sense of someone that actually has a sort of a professional portal, a platform. But so so as far as core con uh uh core chain um is concerned, what what's the interface look like? So is this if if I'm a sponsor, you know, I go and I log in, I have uh, you know, I get it all vetted and approved to you all. And then now is that then a platform where I can display my deals and investors can go and look at the deals? What's kind of the just in a basic sense, what's the the play, the the layout of the platform uh look like for sponsors and investors?

SPEAKER_01 16:04

Yeah, it's a great question. So, first of all, Core Connects is really as you described it at the beginning. We're the we're the infrastructure. What does that mean? We're way at the bottom. What are we doing for you? We're trying to make sure that whatever you're transacting is compliant. So how it looks, how it feels is exactly what you already have. All we do, we plug it in to our infrastructure to make sure that when you are transacting, it's transacting under the SEC rules. So we made that decision a long time ago that it wasn't really about us. Nobody knows me, they know you. And there's a lot of you everywhere. And so when we build Core Connects and our entire infrastructure, which has a few layers, it was built around so it would be under your brand, your color, your URL, your look and feel. Because otherwise, you're imposing the very essence that killed us all from back then. And this is meant to open it. And by doing so, you can operate knowingly that you're operating fully compliant. What does that mean? Fully compliant? Because people go, Well, I can do KYC. No, it's not just KYC. When you're doing securities law, it means that all the regulatory participants are there, the lawyer, the auditor, the SET transfer. Okay, so they can be in the background. Yes, of course, but they need to be there. The Femra broker dealer. Why do I need a broker dealer? Well, think of it this way: we drive a car, you need insurance. Why? Because what if? It's the what if. So in securities law, you pay a broker dealer a very small percentage to be in the background. But once again, to make sure that every investor you're bringing in is being properly vetted in. ID, AML, suitability, sanctioned screening, AML meaning anti-money laundering, ID identification, all these little bits and pieces that are important because all you need is one bad actor in there, and then boom, it destroys your operating. So the broken market is your insurance policy. It takes care of all that. And again, all of that is fluidly happening directly on your website. And then once the investor is done investing using credit card or ACH, their securities are delivered to them electronically, again, on your site. They can view, oh, there's my 100 shares on this particular uh portfolio. Excellent. And then I'll invest again. And depending on what regulation you use, Brandon, you can even give them the ability to trade them. And people, what? That's right. The regulators had the foresight to not only give you the ability to raise capital, but also allow you the ability to give those investors the ability to trade. So that was the one of the big harmonies of those regulations. It wasn't just saying, okay, everybody can invest, and then people are stuck. Okay, what do I do with this? What can I do? Well, now they can trade them, they can sell them to a private buyer. It doesn't put any pressure on the company going public, which is fantastic. You remain private and they can sell them. Now, people don't go in immediately to buy and sell. That's not why they're doing it. They want an ROI. But if they have to, there's no lock to restrict them from doing that. So you you have to admire the regulator for seeing that. And that power comes back to you again to be able to do it. So, one of the key words he said at the beginning, transparency. So, I'm going to keep coming back to that a lot because so look what you got. You got two regulations. One allows you to raise up to 5 million, the other one allows you to raise up to 75 million. You're now in control. You get to dictate, you get to put that out there. So that comes with a responsibility. That responsibility is transparency. You must be transparent to that audience. You need to communicate differently than you would have communicated with the one percenters. Um percenters um are there, they want their return, like everybody else. But this audience, they believed in you as much as a project, it's you they believed in. So you need to keep you know engaging with them because that's why they came to you in the first place, because you engage. And that could be from educating them, providing them information. I have one client that when they first got started, they couldn't connect with the investors, they couldn't figure it out. They go, Oscar, this is such a great real estate project. I go, I know, but the problem is you're treating them like investors. Yeah, yeah, you have to look at them differently. These are people that are going to your buildings, maybe the renters, talk to them and now get them to invest in you. And it's a very different narrative, and and therefore that responsibility of transparency is even greater. So what are we talking about here? Well, in money, as I said in the beginning, it's a funny thing. There is these pockets of money, and each one has a pro and con. So when we think of venture capital and private equity, we the pro is that they can write one check and you're done. The con is you may not be running the business. Yeah, they'll be in control, yeah. They'll be in control. So you got one controlling shareholder directing the future of the business. And sometimes they'll even control even further where they won't put any more money and forcing you to shut down. So you have to look at that. So here you get to put the offering on your terms to everyone. Not one person will control, but you have a responsibility to them. And if you can grasp that and you can nurture it, you can go back and back and back. I've seen companies do it after nine years over and over and over. And the crowd keeps coming back over and over. Why? Because they believe in what they're involved in. See, that's the interesting thing. Making money is not just simply putting it in. If they want it, that they go to the stock markets and they can that any day. This is different. They need to believe. Why? Because if they believe in the story that had they put a thousand dollars in Elon Musk's company, you know, in Tesla way back when he first got started, and it's now worth almost half a million dollars. You gotta believe and you gotta wait. I mean, it wasn't worth half a million the day after, it took a decade to get there. You gotta be patient. And during that time, what you do as a CEO, you gotta inventalize them. You gotta get them to participate. And yeah, it's wonderful.

SPEAKER_03 23:16

It is, I think um, I think you you're very accurate in that the approach and the story is kind of different when you're approaching a retail uh investor versus kind of a larger, you know, investor, um, where you know, at the retail level, at the individual level, it's much more um, you know, almost I almost say emotional, maybe not quite, but it is very intimate and it is very much about you and your story that they're believing in. And so the edge, even though the educational piece still needs to be there to make sure that they are confident in what you're doing that they and that they feel good about what you're doing, um, you know, it's it's much different than you know, speaking to kind of a larger outfit or the you know, venture capital or private equity firm where they want to see the numbers and they want to see what you accurately what you think the numbers will be. You know, so the whole this whole mantra of uh kind of underpromising, over-delivering that you see when we're when we deal with kind of the retail side, you know, certain private equity investors won't want that. They'll want you to say, hey, if you think this is what it is, put it here and then we'll we'll look at the numbers and be sort of a cold, you know, a colder review, I would say. So there's definitely a difference there. One thing that uh, you know, on the topic of transparency, because I know that there's a uh blockchain plays a role in this, correct? So can we talk about that? And you know, wanted to dig a little deeper into the role that blockchain plays in into your firm.

SPEAKER_01 24:37

Yeah, it's a great question. I mean, it's um coming back to transparency and coming back to that earning that trust. And with when you're dealing with individuals that have never been given this opportunity to invest, they're they're gambling. Well, not just gambling, they're taking a risk. One, they love your video, they love who you are, but they haven't touched you. They maybe some happen, not all. You're not going to be able to reach everybody. So, how do you build, how do you give them the confidence level that I gave you$500, how do I know that I own this? So the SEC transfer agent plays a great role in that. But when you're managing thousands and thousands, hundreds, maybe a million, you need something more efficient. And then if people are doing transfers and trades, that number can easily grow and double. So at Core Connects, we have uh the world's first and in the United States, the first SEC qualified uh blockchain technology. What does that mean? We went through the front door of the SEC, we showed them what we had, we said we follow the rules, we don't, we're not asking for anything special, and we will continue to do so. Uh, our environment is a permission-based, meaning that it's not available for the general public because it is private markets, private capital market, the first word, private. Your information is yours. People shouldn't know uh what you own, only you, the company, your lawyer, and so on. So the every every share that is being acquired in your company is actually being put on the chain. That immutability, that ownership, that investor protection is everything. That investor will never have to ever worry that whether I own those$500. If you one day, you know, something forbid, something happens to you and you did not paid your books, it doesn't matter. The book's already there, it's already set in stone. It has all the rules to protect the investors. You can't erase them. You can try. See, all those things go through the mind of an investor. Oh, I've heard the horrors that, you know, one day I put in, then they tell me they have no record of me. Yeah, that will never happen within our infrastructure. Today, we've done billions and billions of shares that we've tokenized, that's another word, or digital securities. We put on the chain, and investors have protection of ownership. We can validate, quantify, yes, you do own a thousand shares in that company. No matter what the company's telling you, you own a thousand shares. And if the company argues it, we can show it to them. Why? Because at the time of the transaction, everything was there. What does that mean? Well, they enter their data, they pay for it, they signed the subscription agreement, and the company took the money. See, it's not like you know, there is no tracking. There's a yeah, the chain is tracking everything, it's creating a chain of trust for that transaction. Today, up until blockchain, we didn't have that. And there were times, scary as it sounds, that people did that. I'm not saying all entrepreneurs did that, but there were some malicious entrepreneurs. And sometimes they did it, they did it because they were malicious, sometimes they did it because they were just overwhelmed. Oh my god, what am I gonna do? It's all these shareholders, I can't keep track of it, and and so on. So technology has made it easier. We don't need to be afraid anymore. Yes, we don't need to be afraid. And for companies, you now have a way of giving something to an investor that they've always wanted. Number one, investor protection. This does not mean that I'm saying this company is gonna make it or they're gonna be a home run. That's not, I'm just saying that the investment you made is real and it's gonna be protected, and it will be you will be there like a tombstone that you are the holder. And then, of course, transparency. They can always see it, they can always log in to view it, regardless. You know, in not that, hey, can I see my shares? Well, no, not this week. I gotta hit all get a hold of my lawyer. None of that. They can just log in or the mobile app. There's my shares. I want to transfer something to my daughter, to my granddaughter, whatever it is. And they're in control and they should be. And that's the power that the jobs like is given. So you can see the balance here. So one, they've given it to the entrepreneur in order to raise the capital, and they've also given it to the investor. And they put the intermediaries in in the middle there to make sure that both parties are doing it correctly. And every once in a while, you got to keep educating the groups. You know, you got to go, hey, Brandon, you got to do this, this before the end of the year. Okay, thank you. And Brandon, we got to deliver that to all the holders. Okay. And then you got to remind the holders, you know, what their role is, you know, what their expectations should be. And that education is important because the more people we educate, the greater chance we have. And this is why it's important for all of you to remember this. The greatest lesson that I got taught by David Wheel as an entrepreneur was every single day there's$36 trillion sitting in US bank accounts today and growing. The only difference is that we're here and the money's there. Up until 2012, we had to go by these intermediaries and that was it. But the money went from them to there. Make no mistake, it wasn't their money, it was everyday money, your money, that it went there. Now you have to do it. The only difference is it's a little dark, meaning you don't know where it is. But we're helping with that. We're we're putting lights, opening it up. The more people become aware, 10 million Americans have now participated investing online with these companies. Anything from you know, from technology to biotech, med tech, life sciences, real estate, and real estate and everything you can think of family, office, you know, family, uh, real estate, you can think of commercial, uh, cannabis, alcohol, whatever. It agnostic, as long as the company filed with the SEC and got qualified to raise money, who are we to tell you whether you're a good enough company or not? We're just you now have the ability to do that. And if everybody follows that, you're you know, you have an opportunity, and in a company that does not need to be a billion-dollar company. This is another important thing that everybody needs to understand. Not every company needs to be a billion dollars to make a difference. The one company for me, like after 14 years, I still remember this company, a young lady raising$50,000 to buy sewing machines, even sewing machines. If it wasn't for the jobs act, she would have never been able to do that. By buying those sewing machines, she created jobs and she had a little shop. You see, that's all it is, and you know, you go wherever you go in America, Washington, New York, there's little shops. We need those shops, they serve a purpose. You know, they serve a great purpose for all of us. So it imagine in in your neighborhood if if your local dry cleaner is going to be shut down and now you got to drive another 20 kilometers to get your dry. Is it worth it to you to give them$100 to have an ownership and keep them there? It's a no-brainer, right?

SPEAKER_03 32:26

Yeah, yeah. This is that's that's very interesting. I mean, he he it kind of speaks to I mean, the direction that that this is all going. I mean, I think um, you know, there's a couple of things you mentioned in there that I really want to uh focus on that that for me sound like they're they're kind of uh almost game changers, really. Um, one of which is you mentioned the transferability of shares. And uh that so that's a pretty a pretty big deal. So there's two things I want to talk about. One is transferability of shares, but the other one is for some, so someone who's coming in who um is not familiar with blockchain, meaning so I know that the block the blockchain and cryptocurrency are two are two separate things, right? Cryptocurrency is on top of uh blockchain tech, but that doesn't mean that all blockchain is cryptocurrency. Now, there's some people who aren't aware of that. So so that's my first point that I wanted to tackle is maybe clarifying that just for people who aren't aware, aren't aware of that. That they they they are they can you you can use blockchain for contracts, it can have nothing to do with cryptocurrency example. So if someone doesn't have, say, a cryptocurrency account, they might be thinking, oh, well, I can't participate in this. That's not true. So maybe just clarify for for people who are not uh clear on that.

SPEAKER_01 33:33

Yeah, it's thank you for that. Sometimes I, you know, being in the tech sector, you kind of analysis so true. Um, and grand analogy that you know, blockchain is it is is just something that is there. It it is nothing, it is it's whatever you want to make it. And there are people who are creating these cryptocurrencies, so that's a byproduct of it. And no, this has nothing to do with that. Um, there's no wallets, you don't need to have any of those things that you hear in that world. Uh the crypt, you know, you you hear wallets and people robbing and no, we're using blockchain in another case. I'm gonna give you another example of this. Um, we don't think of this much, but you know, uh people who are in the medtech space, people who receive hard plan, uh transplant, they are given a device and they're given a serial number. And for the very first time, I I applauded this group. It's called Traceability. They created an application on blockchain, on blockchain to trace the ownership, the the the the the transplant they made. So if there was ever going to be ever a problem, there was no issue that this was put in Oscar's heart and it came from this manufacturer and it was put by this doctor. That was just phenomenal. That's a real life case. All the other stuff, it's a totally different world. We don't play in it. It's illegal, first of all, in our world, to be involved with it. We can have no um association with cryptocurrencies because the SEC and FINBRA have indicated, you know, what's going on right now. They are uh they are illegal at the moment. Um is, you know, I'm not telling people not to play in it, but I'm just saying be very cautious. We're using we're using the baseline technology for another purpose, and in this case, it's a great business case. And what's it do? It's gonna reduce the friction of finding records, you know, excuse me, finding records, making sure that immutability of ownership. So we so the the the value propositions of the technology are being used in so many different ways. You know, people are hearing about NFTs, another one, and and people go, Well, blockchain isn't NFT. No, NFT is created within blockchain, and it's a great, great, you know, uh innovation. So the fact that someone took a painting and made it into a digital image, and then you buy it, it's fantastic. And the fact that they take that same image and they give little bits and pieces to everyone is even more innovative. But the fact remains that the baseline technology can be used in different cases. You may not even realize that today your own bank is already using it. So many large institutions have already adopted it. And you wonder, well, why don't they say anything? Well, the same way they didn't tell you they were using other technology because they're just using whatever it takes to make their business more efficient.

SPEAKER_03 36:42

Yeah. That's right. That's right. And that's why I wanted to highlight that because I think, you know, uh just to be clear, you know, for the listeners, look, regardless of your stance on, and again, and I wanted to make sure I focused on um on separating and decoupling cryptocurrency from blockchain, because that's that's the prevailing thought for people who are not in that space at all, is that they're linked and they're not. And so I wanted to be very clear on that, regardless of what your stance is on some of the things that have um been born out of the blockchain technology. Blockchain itself is here to stay because it's about transparency, it's about traceability, it's about that kind of thing and preservation of your position and whatever it's being applied to. So it has nothing to do with um cryptocurrency, those things directly, those were built using blockchain tech. Okay, so um it's okay. So now the other point that is very important is the transferability piece. Because this was this is something that, in my opinion, is potentially a game changer. Even though um, I believe what you're saying is that in the Jobs Act, there was uh some um room for it in there, but but in a practical sense, it's now something that that is much more feasible, even in say a syndication deal as an example. So make so maybe I'll explain that. So someone has shares of a company that's in the part of a syndication deal. Um help us kind of understand then the transferability potential of those shares to someone or to an entity.

SPEAKER_01 38:05

Yes. Yeah, exactly. If you're used, obviously, if you've done syndication, you've been doing it under the reg D rule. And we all know that doing a transfer with Rule 144 and one, it's costly, time consuming, and nobody ever wants to do it. It's just, you know, it's got all the so under the Jobs Act, the regulators really, as I said, they did a balancing, and that balance is the following. So in regulation A, where you can raise up to$75 million, the minute I get my securities, I invested, I passed KYC, the broker dealer has approved my investment and closed it, and I received my 10,000 shares, I can begin to transfer them. And the company is doing its work. So, how does it happen? So the investor would log in, they would enter who they would want to transfer. So, quite often people are buying shares to give to their family members or maybe they sold it to someone, but it doesn't matter who they did, they enter all the details. Then our our platform does a KYC automatically in the background on the new individual, and the transfer agent then approves it. If the if all the information is there to make sure that it's ready to go, they approve it, their shares are transferred, the new holder goes, I had 10,000, less a thousand, I got 9,000. The new holder logs in, they got a thousand. When the company logs in, they view their cap table, they go, Hey, look at Oscar had had 10,000 shares. He uh transferred a thousand to John Smith. So all of this is fully transparent for everybody, and you have to use technology because it's gonna kill you how people do it today. They used to have documents. I mean, this is crazy. You can't do that with 50,000 shareholders, right? Um, during Christmas, we had this the busiest time for us for transfers is in December, when people are raising money and grandparents are buying securities for Christmas. And in one case, we had one investor investing, I think,$250,000. And what he did after he was approving all that was automatically give it to all his grandchildren.

SPEAKER_03 40:20

Wow, that's awesome. Oh, so so okay, let me ask you. I mean, this is really good stuff, you know. Okay, so and uh and it's for the sake of uh the listeners and even myself in some cases, the terminology. Um, you mentioned cap table, you mentioned kyc. Um, what what are those those two?

SPEAKER_01 40:35

So the cap table is where so every company has a ledger where every person who put in money in your company with a date stamp and all the so that ledger is a living thing. So today Oscar has 10,000 shares. Tomorrow he he's he transferred a thousand, and so the ledger keeps track of everything. So the company's authorized. So we have a cap table management that allows the company the ability to manage its entire cap table. And KYC stands for know your client. So as a transfer agent, we're almost like a broker dealer. We still need to do ID, AML on that new person that the securities are being transferred. Because securities is money, so you have to, and all of that is happening within the platform. So no more paper shuffling, no more of that. Is one makes the request, the other one enters it, someone approves it all electronically. That was never possible 10 years ago.

SPEAKER_03 41:37

Today it is. That's incredible. Okay, and so here's the next um thing that I want to get clear on. So um, because we we started to talk about uh different um uh SEC filings, you know, reg Reg D, so where which which I'm sure the the listeners here are much more familiar with, reg D 506B 506C, where in one and in the 506B you cannot solicit, and you can have um some, I think 35 sophisticated or non-accredited, sophisticated and unlimited accredited. If it's a reg D 506C, then you can publicly um solicit and you can have an infinite number of accredited only. Okay, but but um I wanted to make sure I I distinguish or differentiate that between what we're talking about now, though, where you have this this uh where it's reg A and you have kind of um transferability. So is that it it does five does that does reg D, any type of reg D filing allow for that?

SPEAKER_01 42:28

Or is it only Reg A that allows for what you mentioned in terms of so first of all, just to clarify, so Reg D 506B and 506C have one major limitation that it's really important for everybody to understand. You cannot have any more than 2,000 holders. Yeah, that's it. That is your limit for Reg C F and Reg A, the regulators once again said you can have unlimited.

SPEAKER_02 42:56

Okay.

SPEAKER_01 42:57

So that is the reason why you can do transfers and trades to as many wearing reg D as you can. Because you have that issue of first of all, the individual needs to be accredited. Number two, does it you go over the limit over the 2000? You never have to worry with Reg C F and Reg A. For the investor, the the security is the greatest gift because they're not bound by all the other rules that reg D has. But at the same time, they don't get to invest, you know, five million dollars where in the Reg D world one investor could if they're in accredited. So there are you know, people need to manage it based on what they feel their community can have. But based on what I've seen in the marketplace, excuse me, is that the the market today has finally re recognized this I have one company in real estate all they've ever done is Right D and when they went out, at first I was going, wait a minute, uh how come your your limit, your minimum investment is not a hundred dollars? Because Oscar, I'm still going after the same Rike D guy. And it took me a little bit, and I'm going, you know what? You're a genius, you figured it out. So try to understand this. In the Reg D world, you go after that accredited investor, he or she can only trade amongst other accredited investors, and the company has a limit of 2,000. And they have to go through the accreditation. In the reggae world, the investor does not need to go through the accreditation. They can invest the big amounts. So they made the minimum investment$100,000, which it looks like it's shuttering everybody up, but it didn't. Every single one of those investors about those blocks were then able to sell it to non-accredited investors and have a bigger spread. So there are so many creative ways to using these regulations. Another one is called what we call the marketplaces. The marketplaces in real estate are going to be huge in the next two to five years. Why? Because the traditional ways you raise capital for one entity or one project, and that's it. Under the reggae umbrella, the regulators allow you to do what is called an LLC series. So you raise money on the top umbrella and you put properties together that equal 75 million. So let's say it's about 30 properties, and you put all of this under your platform, your website, and so on. The investor is able to buy and trade all of it on your website with all the regulatory components. It as I said, I mean, we're living in the most exciting times because everybody's given a chance to participate. Everyone is given an opportunity to grow their businesses or start their businesses because the capital is there, but you're gonna have to earn it. It's not just gonna, you know, people go, I build it and they will come. Good luck with that.

SPEAKER_03 46:11

It didn't work.

SPEAKER_01 46:12

It doesn't work.

SPEAKER_03 46:13

It didn't work at all. But you know, one thing that um, you know, I like that you're that you've kind of mentioned a couple of times that we're in a really good um it's just a great time to be alive because uh, you know, even though sure, if you build it, they will come. That doesn't work. We do, however, have the benefit of the world being a very small place right now. So you can put you can put some out on the internet and you can literally touch you know the world with with the piece of content or a few pieces of content. So the ability to speak to people at scale is unprecedented. So um, but yeah, no, I just again I just think that this is really um, you know, really, really amazing uh stuff here. So and I want to ask now, what are some of the not not pitfalls, but what are some of the risks uh, you know, of let's say someone's used to the reg D world and they want to shift over then and say, you know what, I think I want to now play in the reggae space. What's what's some of the things that they need to be uh conscious of or aware of in order to uh give themselves the best the best chance to succeed?

SPEAKER_01 47:08

That that's a great question. And and the best way I'll answer it for you here is that the the the challenge isn't that there isn't any risk in the regulation. Actually, it's actually better. It's the CEO, they have to transform themselves. And here's what I mean: you have to transform yourself, you're not going after that high net worth selling them on the ROI anymore. The ROI is gonna be there. All of the basics, everything you've done before, all of that's there. But now you're reaching an audience that never even had a chance to. So you got to go back to the basics the same way you asked me, okay, Oscar, let's talk about boxing, let's go back. Same thing. And some people go, oh, you know, that's a lot of work. You know what? That's the beauty of it. You do the work now, look what it pays off. Because, see, here you're always limited. And the the accredited is moving the market based on market conditions that are out of your control. Here, these individuals, it's all in your control. They're following you, they they they follow your narrative. So you have to transform yourself. The same way that I transformed myself as a CEO of my company. It like when COVID hit, there were two things you could have done during COVID. You could have gone under the table and hit and said, oh, it'll be okay, things will come back to normal, or immediately embrace it as we did. We shut down our office, offices again, and we brought everybody at home. Everybody was happy. We went from a company of 10 individuals to 74. So, what was different? I had to be different. I couldn't manage people the same way, I couldn't micromanage them. It would drive me nuts. You know, people put software in there. No, you have to trust. So, what these are the same characteristics you have to do with yourself. So you have to transform yourself, how you're going to talk to this audience. And when you do, it's that's so the risk is can you do it? Do you have it inside you to change the narrative on how you're going to approach? Can you change the risk? Is can you identify, can you speak to the everyday person that has never heard you before, or maybe has, but never been given the chance to participate? Because the only way they could, if they put in 25,000 and now you're giving them a chance just with$100. See, it it's easy, but the risk is you, it's only you. The rest is the market. And how big is the market? Well, let me put it this way: real estate is the number one regulation that how many people are shifting from RAID D to reg A daily? Why? Because if you're going to advertise, why not get everybody, not just you know, right now the way you're doing it or others in the reg D world is you're hoping to get that one in a million. I mean, really? And instead, you're reaching out to everyone, hey, wait a minute,$100, I'll get a piece of that. And communicate. You build you build a profile around the people who believe in you. And next thing you know, you're building communities all over the all over the place. I share a strategy with you at one company that I that I that I share with everyone because to remind everyone the power of people. You know, people use the word crowd, but I'm just gonna say people. So this company based in London, UK. London, the UK, um, with a brewery. So if anybody's ever been to London, every every pub has a microbrewery. So there's no distinction between one or the other, and they got funky names. And this one was called Brew Dog. And Brew Dog wanted to raise capital. It raced a little bit in the UK, but it didn't do very much. It came to the US, created a company in the US. Brew Dog has raised now neighborhood of$300 million. Wow, it has franchises all over Brew Dog, uh, you know, uh restaurants and and microbreweries inside. All the money came from the crowd. They couldn't get enough of it. And why? Because he he was thinking of them, not as investors. He called them punks, equity punks. So the punks wanted to be part of this. They got a badge every single time a new store would open, they would get a badge and they would collect it like Boy Scouts, you know, and and so you you build a community and people believe in what they're doing, and that is the power of people. People is the money, and as long as so again,$36 trillion is not held by one family or one five, it's held by Americans, 233 million Americans. Okay, and so you're here, it's there. It's time for you to realize that once you make that shift, the rest, as they say, is history.

SPEAKER_03 52:15

Wow, man, that was incredible. That was incredible. And I just think um, again, that to me, this is really exciting stuff. And um, and uh yeah, I think that it's definitely the the the present and certainly even more the the future um of this industry. So I really appreciate it. Um, so Oscar, uh again, but you know, this has been been really incredible. We're getting kind of close to to wrapping here, though. So I wanted to um ask you. So if someone is you know listening to this, and um, in this case, we'll actually talk about um on the active side because normally I ask this question for a potential passive investor, but someone's an active investor and they're on the reg D side, they want to switch over to the reggae side. What is an action that they can take today to facilitate that?

SPEAKER_01 52:56

So, first thing before you do anything is get educated, get a hold of me. I published, uh I have a number of books, free books. We have the largest library or video library that you can learn from experts, lawyers, auditors, everybody. Learn the how-to, learn everything, learn the language, learn the lingo, learn your responsibility. And when you're there, and you can do that while you're getting everything prepared, but you should do that because you should never go into something without knowing everything that you're going to be involved in. And uh, I'm easy to find. I'm on LinkedIn, Twitter, Facebook. If you email me, I'll email you a copy of my ebooks. They're all in PDFs, and they're very easy reading. Remember what I said, I'm an immigrant, so very simple English. So the idea is the book was written to help investors understand how it works and for companies to understand what they need to do and the responsibilities for both. And the more educated you are, the better it is, and the more fun you will have in using these regulations.

SPEAKER_03 53:58

Right. All right. So I'll include that information in the show notes. Is there any other um how else can listeners maybe get in touch with you or get a hold of you or see some of your content? Are there any any other uh things they need to tune into?

SPEAKER_01 54:09

Um, you know, at the moment I I'm just doing I'm doing a lot of public speaking, but if they email me Oscar at CoreConnex, K-O-R-C-O-N-X.com, I will respond. I mean, I don't, I know what it's like being an entrepreneur. I've been an entrepreneur all my life. So um part of our journey today is we want to help you and your and your listeners to make sure they understand that you're not stuck in a box. This is the only lane. You have more lanes, you have another chapter that you never even knew about. Okay. That's what I'm presenting. And it's real. It's it's it's last year our sector raised 151 billion dollars. You know, this is exciting for us. We're we're making a difference. And uh, and and it's and it's just getting started. It's just getting started.

SPEAKER_03 55:04

Well, that's incredible. Again, I mean, I you know, I like I said, I really appreciate uh the information, appreciate your expertise and and and your perspective here today, um, Oscar. So um I'm very excited stuff. And again, I you know, thank you so much for adding value to myself, to the listeners. And um, yeah, I'm just looking forward to seeing kind of your your company and firm and industry continue to grow. So um thank you so much for uh for your time. Thank you, Brandon. I appreciate it. Thank you. As always, thank you so much for tuning in to the show today, brought to you by Bridge Prosper. If you enjoyed today's episode and you'd like to learn more about commercial real estate investing, please like, subscribe, and share. And we'll see you again next week. I'm Brandon Jenkins, and this is the Capital Stack, where we help you learn, apply, and prosper.