Legal Excellence in Alternative Investments

Navigating the maze of private securities and alternative investments requires more than just legal knowledge—it demands practical wisdom born from experience. In this enlightening conversation with Roland Wiederaenders and  Sarah Florer of Grable Martin PLLC, we uncover the hidden complexities of raising capital in today's global marketplace.

Did you know the private securities market vastly outweighs public markets, despite receiving far less attention? Roland and Sarah, with their decades of combined experience across multiple jurisdictions, reveal how entrepreneurs can effectively structure deals to attract investment while protecting themselves legally. Sarah's unique background—practicing in Texas, New York, Dubai, and the UK—brings a truly global perspective to investment structures and cross-border transactions.

We explore the practical realities of international investing that rarely make headlines. When that Singapore family office agrees to invest $100 million in your venture, banking complications can delay funding for years. The attorneys share a fascinating case study where Gulf-based investors faced a two-year process simply to transfer funds to a California company due to compliance requirements.

The conversation delves into emerging industry trends, particularly the untapped potential in the cannabis sector. Despite significant regulatory hurdles at the federal level, the attorneys explain why entrepreneurs should monitor this space closely as eventual policy changes could unlock massive economic opportunities throughout the entire supply chain.

Perhaps most valuable is their breakdown of Grable Martin unique approach to legal services. Operating as a distributed firm long before COVID made remote work common, they deliver expert counsel at rates 30-40% below traditional law firms. Their philosophy of personalized service without unnecessary hierarchy makes sophisticated legal guidance accessible to entrepreneurs at various stages of growth.

Whether you're raising your first million or structuring your fiftieth deal, this episode delivers practical insights into the legal frameworks that underpin successful capital raising. Subscribe now to gain an insider's perspective on navigating alternative investments with confidence and legal clarity.

To learn more about Sarah Florer & Roland Wiederaenders:

1. https://grablemartin.com/

2. https://altinvestingmadeeasy.com/

3. https://www.youtube.com/channel/UCbH4ns8lUo2CgZwrpLbPk-Q

To learn more about Jonathan's recession resilient mobile home park real estate: https://www.midwestparkcapital.com/ 

-----And ground up Flex Space Development investments :

https://www.land-play.com

To learn more about Jonathan's lawyer Google Ads, SEO or business growth & consulting fractional CMO services:
https://www.revenueascend.com/


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Transcript

Practicalities of International Investing

Speaker 1 0:00

That said, it's not without consequence and they're practical problems to consider. So first of all, one practical problem. If you are an issuer in the United States and you're so excited because you've got a family officer from Singapore to agree to put $100 million into your deal, Well, there are going to be banks involved with that. Banks have to check, as we all know. Banks have anti-money laundering requirements. There's potential for, you know, checks have to be done to make sure proceeds are not received from criminal activity. Different countries where that money is coming from are going to have a different set or different risk profile.

Speaker 2 0:35

Welcome to Counsel and Commentary, the ultimate podcast for entrepreneurial lawyers ready to take their practice to new heights. To take their practice to new heights, each week we dive deep in the business strategies, growth frameworks, real world lessons you didn't learn in law school but absolutely need to build a thriving, sustainable firm, whether you're a solo practitioner or running a small team, you'll discover actual insights on leadership, marketing, client acquisition, system building and financial management, all tailored specifically for the legal world. Hosted by seasoned entrepreneur Jonathan Tuttle, founder of Revenue Sun, a leading lawyer, google ads and SEO agency. Also, midwest Park Capital, a boutique alternative commercial real estate asset fund business. Cash out a service-based business roll-up PE firm. And get podcast bookings a podcast guesting tour agency for those wanting to get booked on top podcast shows.

Speaker 2 1:23

If you're ready to work smarter, lead better and scale faster without burning oil, keep listening and let's build a firm and life you deserve. Welcome back to the newest episode of Council and Commentary. Today I have two amazing guests. This is the first episode with two guests Roland Weteranders and Sarah Flora of GrabAllMartin. Welcome to the show.

Speaker 3 1:46

Thanks so much, Jonathan.

Speaker 2 1:48

Perfect. Who would you I'm going to start with? Let's start with Sarah, because I like get a little quick background, because I think you have a pretty interesting story, kind of where you're from what you're doing currently.

Speaker 1 1:56

Well, I'm from Texas, I guess you could say, and I did my legal studies in Texas and then I qualified in New York and ended up working in Dubai internationally for a long time. I started off my legal practice in a large law firm, working on corporate finance and kind of turning into private wealth, which is where you work on the investments of the privately wealthy, which involve a lot of private investments and also some public investments, and from there I went into a private equity company that was a client and worked with them for a long time. They put me into one of their asset companies where I was a general counsel for a long time and that was an asset company that was an operator and telecommunications space in the Middle East, and so I spent a number of years there and then came back out of that back into private practice with Roland and back to working in a finance practice, but with a focus on private securities and alternative investments, which many people think of as funds or as private equity hedge funds, commercial real estate. We also work on oil and gas deals, so that's kind of the journey of it. I spent 17 years in Dubai.

Speaker 1 3:11

I'm still a resident there or here, which is where I am right now and I'm also qualified in the United Kingdom, England and Wales because in my legal life here in the Middle East it made a lot of sense. A lot of things are focused on English law, so it made a lot of sense to. I got a master's degree and I went through the qualification process to become an English solicitor. So I'm qualified in New York, Texas, and in England and Wales, which is a little bit unusual. So that's kind of the quick summary of my story. Maybe Roland?

Speaker 2 3:48

Yeah. Roland want to give a quick background about yourself.

Speaker 3 3:52

Yeah, for sure, Thank you. And I grew up in Austin and really practiced my entire career in the last area that Sarah described is just helping. We call them issuers, people that want to sell securities in connection with financing their business. You know, representing issuers of private securities, and these are private versus public. I think people would be surprised if they realize the size of the economy represented by the private sector versus public. You know, the public gets all the press but you look on a graph and the private sector of our economy dwarfs the public, honestly. So we work with a broad sector of the economy, all these private securities deals and, like Sarah was saying, you know it's private securities financings to finance commercial real estate.

Introduction to the Podcast

Speaker 3 4:47

For a long time, one of my very best clients was an electric motor company. We can represent a hedge fund or a private equity deal, both from a fund perspective and then also, you know, like I was just saying, the electric motor company. I represented them through three rounds of venture capital financing. They raised a total of $40 million. So we're really versatile in terms practice, where we can not only represent these issuers of securities but also then on the other side, representing the investors and then covering all their needs, including estate planning love it, love it.

Speaker 2 5:38

Yeah, it's pretty comprehensive. What kind of? What got you guys inspired to uh, I guess let's go with sarah the form or the, the rhythm here. Um, what got guys inspired to become into law? What was the inspiration behind it?

Speaker 1 5:53

I grew up in Dallas. Actually, I was born abroad, in Canada, and then I lived in California and I grew up the rest of the time in Dallas. I didn't really have law on the radar. We had a lot of businessmen or preachers and teachers in our family. So there was businessmen or preachers and teachers and you know, in the media and whatnot there's a lot of negative press.

Speaker 1 6:14

I think we like to poke at lawyers a lot in the United States for, sometimes for very good reason, and so it wasn't on my radar until I was in university and I met someone she was in law school and I was like that sounds kind of interesting and it kind of percolated. For a while. I actually went and worked for a while in a large private company and I worked in various aspects of the finance department and ended up getting an MBA and doing that for a while. And then from there I went and worked for a social services company and I worked very closely with an attorney in that context and I was like he was really wonderful person and he was a really did so much good for his clients. He was a trust in estates attorney actually, but he also on the side did a lot of support for people who needed trust support, who didn't have money to pay for that. So so that kind of inspired me and I came back to UT Law in Austin to go to law school and my parents were expats in the Middle East and so I'd always grown up with a lot of exposure to Middle Eastern culture and people from the Middle East and I thought it'd be really interesting to work in the Middle East and I'd already had a finance background. So when I went to law school I went with the intention of coming out and working in the finance and some kind of area of banking and finance, with an interest in Islamic finance. Actually, because people, a lot of people, don't know this about University of Texas, but they have a very strong Middle Eastern studies department and that is you know at the time, and the Islamic finance was becoming its own part of the finance industry, you could say.

Speaker 1 7:50

So I ended up after law school moving to the Middle East, partially because my husband is also an attorney and he's a maritime attorney, and he started working for a really large English law firm out here in Dubai and I came along and got a job when I got here at a really large regional law firm, which was a great, great experience because I was the only American and everybody there was from someplace different and we did at the time that the legal situation system in the United Arab Emirates is actually a little bit complicated, but at the time it was. I did a lot of finance work that was focused, based in English law, you could say. So it was really great. I mean, my boss was from New Zealand, another boss was from Jordan, so I got a lot of exposure to how people practice law all over the world, and which fit also really well because my original studies in school were anthropology, so that was kind of cool to get to do all this cultural stuff at the same time.

Sarah Flora's Legal Journey

Speaker 1 8:49

I was being a lawyer and I think ultimately what keeps me kind of partially in love with this part of the law, which is all aspects of how you contribute to the economy. So having a strong economy in our world is so important for the health and wealth of everyone, you know, whatever wealth, however one defines that but it's so important for societies to have an ability for everybody to make a living. That's how we, you know, live satisfying lives as human beings, whether you're on the high end and make a ton of money, or whether you make enough money to get by, and that's your choice. It's no judgment there, it's just we need a healthy economy for everybody to key in where they fit, where they want to fit. So to me, practicing law with you know there are different labels for it corporate finance, a finance practice, sometimes it's called a banking practice Anything that has to do with how money supports business in the economy I find fundamentally interesting and so very important from a wider perspective. That it's kept me motivated for a lot of years.

Speaker 2 9:53

Nice, nice, I love it. And Roland, quickly about you like a little inspiration.

Speaker 3 10:00

I won't talk about how I was inspired first to become an attorney when I was arrested for possessing alcohol in high school, so we'll just set that aside. That was my original fascination because I was just so overwhelmed by relief when the attorney that my stepdad hired got help help me get get around all the problems that that created. But later on in college I worked at a bank across the street from UT and it was like a customer service role and and I became acquainted with the owner of that bank. His name is Joe Long and there's a Long Center in Austin that's named after him. It's the Performing Arts Center in Austin. But I just I became acquainted with him.

Speaker 3 10:48

He was kind of a friend of my uncle's and he was an attorney and he was just somebody that always impressed me so highly. Whenever I would observe him I'd always think this is the smartest guy in the room and just had really great discernment and leadership, all these great qualities. And somehow I connected that with the fact that he had a legal degree. He was a lawyer before that and representing banks, and then finally he founded First State Bank and himself and got into it. But I was just always impressed by him. So I really sort of dedicate my career to him and you know, to the extent that you know, he was really a strong, strong inspiration for me to to become an attorney and I always imagine myself working in finance.

Speaker 3 11:35

Like what sarah was saying, I never imagined myself as perry mason or getting up in the court. I've gone to court a few times and um gone to court a few times and um, thankfully, the. The going to court for the, the possession of alcohol, was when I was 16, so, um, that was a long, long time ago. I'm 54 now, so 38 years ago. I've learned my lessons between then and now I'm sure.

Speaker 2 11:58

Yeah, that's a long time ago. What can you give like a story of like what? Because you I was looking at your background, roland you mentioned, uh, electric and some of this, so you work a lot with some of the sounds like some vcs can you kind of give us a case study of like a client you work with and kind of like how you helped them navigate the you know the process of like legal legalities?

Speaker 3 12:19

well, I think I can talk about infinitum. You know this is a Infinitum Electric in Round Rock, texas. I think they're still there, but you know their history. They were initially working on a different technology, but it morphed into an innovative design of the spinning part of an electric motor and I'm not a technical person, but I learned enough to be able to describe this but instead of the copper windings, like you see a lot of times in the electric motors electric motor and I'm not a technical person, but I learned enough to be able to describe this but instead of the copper windings, like you see a lot of times in the electric motors, they embed the this is how I understand it the the copper in a ceramic disc, and so it creates efficiencies in terms of making the motor light way less and I think production is easier.

Speaker 3 13:05

There are some advantages to it. So, um, you know you have to learn about the company and, and you have large investors coming in writing big checks. You know they raise the total of about, you know, 40 million dollars, I think. And um, in any event, you know just, you have to learn about the company and what the technology is, and then disclosing to investors what the risks are associated with that, and then going out and helping them comply with the law, create enforceable agreements. You know they're a corporation and so when you buy a stock from a corporation you enter into a stock purchase agreement and the company makes representations about ownership of its assets and things like that. But negotiating all of that is what Sarah and I do is those enforceable agreements that allow companies to raise capital through the sale of their private securities, just in whatever context.

Speaker 2 14:14

Perfect and Sarah, can you give examples of kind of some little known like, because in business has some like different. Like you know, obviously we have private placements for raising capital. Is there some other tools that the average, even business owner, doesn't even know that they could use to their advantage?

Speaker 1 14:30

To release money. Well, in the end, it's kind of useful to understand what is a security, which is actually a complex question. In the end, it's kind of useful to understand what is a security, which is actually a complex question. But there are different ways that you can bring money into your company and there are different ways to do that. That makes sense when you're of a different size. So if you're at the very beginning of a company or of your capital raising for a company that you're running, so you need some private equity dollars, which sometimes you might think of venture capital as early private equity. Or if you're doing a commercial real estate project and it's your first one and it's a small deal and you need some money there. The main, you know, you basically have the option of seeking out debt as a way to get money into your company or seeking out equity, and so equity is one kind of private security where you sell shares in your company or you sell stock in your company, depending on how your business is organized. And on the equity side, you can just do a pure sale of your equities, your shares or your membership interests. If you're a partnership, you can use safes. I think a lot of people know about safes now.

Speaker 1 15:41

It's supposed to make the process simpler, but of course, over the course of time it has become perhaps as complicated as just issuing offering shares in your company. And then always there's debt. And maybe you start off with simple notes that you offer to a few people who wanna lend you money for a fixed return to put into your business. Those are usually in the form of promissory notes or very simple note documents, or you can get somebody to loan you a lot of money. In my experience on the other end, for very large companies, because I used to do work on really, really big deals it's the same thing. They're getting gigantic injections of cash from syndicated syndication of lenders, you know, to the tune of a billion dollars or more. In today's dollars, you know, billions don't mean much anymore, but in 20 years ago that was really quite a lot, and at least in the Middle East. And so you know you can do your private raise now of that kind of capital. You can also, at that scale, you might go on to a public exchange and go through the expense and process of of registering your share so that you can take in public money, um, and then you know. So the same instruments are there whether you're at the very beginning of your journey, in a very small scale, or the very later mature part of your journey. It's just the level of complexity involved. You still, basically, can borrow money or you can sell people interest in your business, and there are different features and different benefits and risks from both of those, and that's the kind of work that Roland and I can counsel people on.

Speaker 1 17:17

So a lot of people who are experienced entrepreneurs already have a really clear idea how to raise capital, what kind of capital they're comfortable using. And then a lot of times, if you raise equity, you also combine it with debt from maybe an institutional lender or another fund that does a lot of in the context of commercial real estate, for example, lending against a real estate asset is really common because you have a physical asset to secure your debt with. And then you also raise equity because you need both pieces area that I've been working in recently, where people do deals between, say, 1 million to 20 million dollars. That, um, the issuing debt securities, is something that people know less about. Um, there might be early stage money. Taking in as simple promissory notes is just to help get projects going and things like that. Um, but there is know you could actually do more with debt securities if you wanted to have really set terms and a certain risk profile.

Roland's Career in Private Securities

Speaker 1 18:25

And otherwise, you know equity. You know what they say about offering equity. If you can get people to give you money for shares and your idea that money doesn't have to be paid back, hopefully you provide a return to your investors. That's the whole point, really, and what Roland and I do with anyone, whether they're. I mean, we've worked on deals where it's just a few hundred thousand dollars all the way up to $50 million. I think that's the range for our recent deals.

Speaker 1 18:51

What we help you with is when you raise money of any kind debt or equity, you need to make disclosures. There are certain regulations in the United States that apply. Different countries have different rules, but the main idea is that if you're raising money, you need to disclose a lot of details about your deal and the risks and what investors get to protect yourself for the future. That's what a private placement memorandum is. That's what disclosure is, and that's the real specialty that Roland and I have is that we're able to help people make those documents so that they really have a shield and protection, however, it is that they raise money, whether it's through debt or whether it's through equity. In the end, the definition of securities in the United States includes both debt and equity, so you don't avoid the process if you're offering debt, for example.

Speaker 2 19:39

Perfect. I love the in-depth detail. Ppms is not cut and dry. That's what you guys are here for and kind of navigating the process.

Speaker 1 19:48

We always tell people they have to at least read their own.

Speaker 2 19:51

Yeah, it's not a boilerplate. Every deal is different. Roland, can you give some things that common mistakes that an average, let's say a small capital rais? You give, like a some things that common mistakes that an average, let's say a small capital raiser. What's some things that they don't know about?

Speaker 3 20:02

they should know about yeah, that's a really good question. Um, I think understanding just basic financial concepts is is really important, of course, but then, as those apply to the capitalization of the entity, you know. So you're going to form as a business owner, you're going to form an entity and you're going to capitalize it. And sarah just gave a great summary of equity and debt and all all business entities generally are capitalized with some combination of equity and debt, and all all business entities generally are capitalized with some combination of equity and debt. And then, when you look at the cap table the equity cap table understanding that the equity represents control, management, control over the entity.

Speaker 3 20:52

And then, when you get into sharing, um, just understanding how, uh, you know, entering into a partnership is what I'm talking about where you're bringing in other people not necessarily investors at this point, but just operators and just being very careful in connection with how you divvy up the ownership of the entity and managing everybody's expectations about going into it and the effort that people are going to put into it and what their capabilities are and what they're really bringing to the table, and making sure that there are mechanisms where, if somebody doesn't follow through on what they're saying that they can do, then you can allow them to gracefully exit from the company without any controversy.

Speaker 3 21:44

You can still carry forward the business idea, but not if there are disputes among the owners and managers. Being able to carry forth the business idea and letting go anybody that you know doesn't agree with you know, generally it's a kind of a majority rule deal. Um, or you give preference to the capital, but I think for for entrepreneurs thinking about those issues and and um, uh, you know we, we want people to enter into trust relationships. Of course you're going into business with somebody because you trust them and believe in them, but also create agreements, enforceable agreements, so that you know your, your economic rights are are protected and and you're also helping manage everybody's expectations about going into it. You know that we want to run this like a real business, so I think that would be the the one you know. I think people maybe rely too much on trust and not enough on contracts.

Speaker 2 22:50

So yeah, that's a good, uh valid point is that make sure you have partners that actually do the work and not just sit there and get their equity and not do anything. So it's not. I'm sorry.

Inspiration for Pursuing Law

Speaker 1 23:03

No, I was going to say just to add one point to that. I think probably a sign that someone's actually trustworthy is that they want a solid agreement underneath your relationship, because if you don't have anything to fear in what you're doing with another person, then it just makes common sense that you'd have it clearly written down, the rules are clear, and if you do that in advance, you may never need to look at that document again. I think it's when at least in my observation when you don't do that, the waters get murky, problems come up, emotions get high and time gets wasted that you could actually be focused on building a business, and this is, of course, a human condition. But that to me, is one sign If somebody doesn't want a document. That's a question mark, a red flag.

Speaker 2 23:48

Yeah, I agree with that. What's kind of the market sentiment? Obviously a lot of what's going on in the world as we speak right now here in the Middle East, sarah, and so we know there's a lot of geopolitical issues and what's kind of like in terms I guess would be are you seeing a lot of people because obviously the interest rates in last year, if we've been talking about commercial real estate, really affected deal flow? Um, what's kind of the sentiment on new people doing ppms or successful capital raising? What have you seen because you guys have been in this industry for a long time? What's kind of the current marketplace for that?

Speaker 2 24:22

Roland do you want me to go?

Speaker 1 24:23

Let's focus on the US. First, because I think there are two different things going on. And the way that let's just take commercial real estate or just generally private investing works in the United States is that it's much more accessible to the general population. In other parts of the world, for example the Middle East, few parties own the big purse strings and individual businesses going from a tiny journey all the way up to you know, very successful, huge success stories like we have in, you know, in American culture you could say who knows what the real truth is sometimes. But that's a little bit less because usually, for example in the Middle East, if you've grown a business from something really small to really big, most likely you have a benefactor in the background who's already quite wealthy. I actually think in the United States you can achieve a growth process for building your private, your personal wealth and also the success of a company, without quite so much reliance on, say, one privately wealthy person behind you. It can be a multiple of people. There are different paths for that and that's, I think, something is very good about the American economy and, and just further to that, in terms of the kind of deals that we've seen, just let's talk about commercial real estate because we still see people doing deals, but everybody's nervous.

Speaker 1 25:41

From what I can understand, there's talking, and it's not just about interest rates. I think that people got their shock about interest rates a couple of years ago and are learning how to manage that risk. It's just coming out today, I think. One of our bankruptcy partners told us that her practice is up like somehow bankruptcies are up like 56% month on month from last year and then this year this month is even higher, and so obviously included with that would be projects that we might call private investments. So it sounds like some people are struggling.

Speaker 1 26:17

But, that said, I do think there's a pivot in commercial real estate that doesn't. You know. There's office space everybody knows is problematic, but people are pivoting into different types of industrial projects, still multifamily. I think there's always a housing need in the United States and so there's still an argument for all the various things people do with single multifamily residential projects. So the work is still going on. But I do think interest rates are a fear and a risk. But I think the overall stability of the economy and also the cost of constructing things is uncertain right now because of the question marks about tariffs. Yeah, Chip.

Speaker 2 26:58

I want to ask you a little bit more in depth, sarah. Things is uncertain right now because of the question marks about tariffs. Yeah, I'm going to ask you a little bit more depth, sarah, because you would focus a lot international. I think this is a good segue. Um, what if an American company? You don't have to go full detail, but I think this would be kind of interesting to listeners.

Speaker 2 27:12

If somebody's going to raise capital in the US, obviously you have the PPM and you have to like register an nt, like an offshore, like cayman islands or kind of. How does that work? Let's say, if somebody has a, let's say that somebody has a big deal and they want to raise like not just like five or 50 million, like couple hundred million, and they have somebody for the middle east to have, you know, like a foundation or something, and they, you know they're in mon. There's family office clubs and conferences across the world and there's a wealthy family, say, they want to invest 50 million, but they're based out of somewhere in the Middle East or Monaco or Singapore. Is there like a special, you know? I mean this might be like open up, like a real big can of worms, but like, is there like a. You have to open up like a foundation, some kind of offshore entity or kind of what's the basic foundation. If somebody had something more complex.

Speaker 1 28:01

Well, I'll answer your question first and then let Roland pipe up on it on any tax points. But first of all, foreigners can't invest in US private securities full stop. In terms of the regulations the United States actually they're subject to kind of a lesser rigor in terms of the requirements for proving that you're an accredited investor and some different aspects. So, from a purely technical legal point of view, for a foreign party, whether that's an entity or an individual in their own name to invest in the United States is absolutely possible and many, many, many wealthy people across the world do that. There's no doubt that it's well. This is one reason the current state of the economy is a little bit hard on the world, and that is that a lot of people make money by investing in the United States in private deals and in public deals. That said, it's not without consequence and they're practical problems to consider. So first of all, one practical problem. If you're an issuer in the United States and you're so excited because you've got a family officer from Singapore to agree to put 100 million into your deal, well, there are going to be banks involved with that. Banks have to check, as we all know. Banks have anti-money laundering requirements. There's potential for, you know, checks have to be done to make sure proceeds are not received from criminal activity. Different countries where that money is coming from. We're going to have a different set or different risk profile and therefore getting that money to you in your project might be fraught with practical difficulty. And I saw one deal a long time ago which was a big investment in a healthcare product development, so it was at the R&D stage, so it was a pretty risky investment. But $100 million or so was raised and I think it took two years to get the money to the company, because just getting the bank account set up so that the money could be transferred into the company in California it took forever, a really long time. And that was because the investors were from the Gulf, so some of them are from Saudi Arabia and some of them were from the United Arab Emirates and they were subject to a lot of extra not extra necessarily, but there was a stringent process and it was difficult for an American bank to get to know, be comfortable to open up accounts. It was just very complicated. Now this was about 15 years ago. That may all be sorted out now In my experience living abroad as an American, american banks are not great about understanding and how to deal with people who are not resident in the United States, and I think that applies to businesses as well, unless you're specifically the import export oriented banks and some of the ones from, probably, new York and San Francisco who only deal with with foreign transactions, you know day in and day out.

Speaker 1 30:48

So so there, that would be an example of a practical detail. The other, of course, important detail for any foreign investor is the impact of us taxation on their investment and what they. You know they're a number of complications depending on how the money is invested and what it's invested in. That can result in different kinds of uh tax consequences, even if they're not uh non-us residents and non-us taxpayers. So that's, of course, is a. You know, if you're putting 100 million dollars into a deal is an extensive exercise that you do with your team of CPAs and lawyers just for sorting out your tax details. So that's from the point of view of an American issuer. These are things that the more you can know about those in advance if you have contacts and you raise money from foreign parties and foreign family offices, if you can provide solutions for those two kinds of issues in advance of starting kicking the project. I'll say then you're going to be a step ahead. Probably so, roland. Do you have anything to add to that?

Speaker 1 31:46

no, that was a really good summary sorry, I didn't mean to take the whole answer no, I mean the.

Case Study: Electric Motor Financing

Speaker 3 31:52

the only other thing that I would mention and and I think, something that that is real common in the fund world and that is, I think, present in a lot of people's minds is having an entity formed in a jurisdiction like Cayman Islands and there are other jurisdictions that are like that and they have this reputation.

Speaker 3 32:12

I guess, in the distant past or maybe more recent, it's really not like this at all, but you know, thinking of people coming in boats with suitcases full of cash and going into the banks there and, you know, haven for money launderers whatever, and that's not, I don't, it's not the case for sure anymore, because they've implemented some really tight money laundering controls, and so really it does have more to do with tax issues.

Speaker 3 32:36

Us tax issues and the way that the United States taxes non-US persons investing in the US is by requiring the US company to withhold taxes on distributions to the foreign owners, can be recovered, and if there's tax treaties in places, you know trying to prevent double taxation or are trying to get offsets from taxation that you pay in your home country, but in any event, that can be something that foreign owners really need to be cognizant of, and most are, you know, foreign investors, non-us investors, investing in the? U, the risk is that the US business is required to withhold and pay over taxes on behalf of that investor in a way that is very taxed. You know could maybe be avoided by restructuring and or structuring the way that the money comes in. And you know, I know one of the ways is the? It. Just all the different circumstances need to be addressed individually and it's hard to give. You know we can't give legal advice here, but for sure we'd love to talk with you more about any specific circumstances.

Speaker 2 33:55

Yeah it sounds. I know it's pretty complex and you need to have a family office and obviously they have very complex teams and a lot of obviously all endless money. So you want to make sure you do your due diligence and everything correctly set up from the legal and the tax side. What are some trends you guys are seeing that are like something you might be seeing that you're kind of like a new trend that people don't know about, like some new business formations or trends that you're seeing that are kind of like on the cusp of exploding, that most people don't know about?

Speaker 1 34:27

well, there's a, you know, there's an interesting trend that was starting that maybe is being held off now, and that is the cannabis business.

Speaker 3 34:35

That's a good answer?

Speaker 1 34:36

I'm not talking about the business of smoking cannabis, I mean, or whatever one does with cannabis. I'm talking about the infrastructure for the industry and the from supply chains to banking rails to um trademark and patents and all kinds of things like that whole industry is, in the united states, kind of being held up by a few things that roland can talk about more, but this is one industry that could really explode and be a great place to invest, um, if certain things change yeah, I, I would want to chime in here because it's something that I do pay attention to and it's present.

Alternative Financing Mechanisms Explained

Speaker 3 35:16

The issue here in texas do pay attention to in its present issue here in Texas, sitting on Governor Abbott's desk now, is a bill to illegalize all the industrial hemp that's being sold in the different stores throughout Texas legally. There was a farm bill a few years ago that made industrial hemp legal and now Texas is making it illegal and, and I think a lot of it has to do with this sort of cultural thing. This, you know, dan Patrick, in particular, our lieutenant governor, has, you know, he's, I think, funded by the or his, maybe large donors. This is speculation. I don't want to be held sued for reliable, but you know, pharmaceutical companies, alcohol, uh, private prisons, they have a great vested interest in um, keeping cannabis illegal and um, and and so, uh, it's just interesting. But this is going on at the federal level as well, and and then I speculate more well, maybe they're doing this because they see that legalization of recreational cannabis throughout the United States is somewhat of an inevitability.

Speaker 3 36:30

I don't think that anybody believes that we're going to see a recriminalization of those laws just because there's's I mean, the trend is there's an overwhelming majority of the states it's legal, either recreationally or medically, and so it's just a massive part of a huge part of the economy.

Speaker 3 36:52

Still that that, because the federal laws are what they are, um, it hasn't been able to become a real industry like the wine industry in the United States Just compare it to that or the beer industry in the United States.

Speaker 3 37:07

It's not really been able to fully come into its own because of this issue about, you know, the federal laws being what they are, and so I just think that that's that's a massive opportunity in the economy that will be coming online in the next few years. But I would encourage anybody that is an entrepreneur to pay attention to that space. It's sort of you kind of have to read the tea leaves a little bit, and I've been completely wrong. I thought, you know, like a lot of people, I can't believe it's it. You know these laws are still in place, but it's just these states, and you know I'm in Texas and it just seems ignorant to me all the tax revenues that are being foregone, you know, because all the transactions that are still taking place, and even more so now when they make industrial hemp illegal. It just recriminalizes the trade in cannabis, and all those transactions take place in parking lots and no tax is collected. Um it's just ignorance on the part of my my dear home state of texas.

Speaker 1 38:17

Yeah, it's kind of Sorry just to add to that there's the reason that it hasn't developed into a full-fledged industry in the United States is because at the federal level, cannabis is still classified as the very you know, at the very worst, as the very worst kind of substance.

Speaker 1 38:36

And if that were released a little bit, then there would be tax consequences and then the cannabis industry would be taxed as a normal industry, perhaps with some extras, for you know the way you can throw extras in and anything, tax beer, extra, whatever. Um so, but this is this late, this is this latent. You know, as soon as that takes off, eventually, there's just huge amount of catching up to bring that industry online into a modern industry, which so many people are ready for that to happen. And it's not about what you think about cannabis or not, it's just like what you think about wine or beer. They're industries, they exist, and so in terms of entrepreneurial opportunities, there's just it's from every level, whether you're a bank that finances projects, whether you're in the business of research and development and supply chains, all the different parts of any kind of industry.

Speaker 2 39:34

Yeah, the banking was like the big thing.

Speaker 2 39:36

So I remember in California a lot of those like cash businesses and they'd have like armored truck and security guards thing. So I remember in California a lot of those like cash businesses and you have, they'd have like armored truck and security guards and like I remember in Illinois they had like a lottery system to get, like the in Chicago, for example. They had I don't know whatever license they granted, but there is an application and the state raised a few billion dollars to application $5,000 fee and then they only granted it but everyone was getting into it. And then the big thing was you had to submit like your security system, like how you your architectural drawings are like cause it's so there's so many different industries and I just like open up like a traditional or a retail where it's like hey, here's the build out. This is like no, you have a security system. You have to like opens up to. Uh. Sarah's point of loo too, was it opens up so many different, uh entrepreneur aspects. Even the banking side is lending it to cash.

Speaker 1 40:28

So instead of the cartels getting it, you guys are in texas or rolling the texas, the other ones that benefit most from it.

Speaker 1 40:32

So no, it's, it's a really interesting situation and and again, just to reiterate for any viewers, it's not about cannabis per se. Cannabis people have different views about things like cannabis and alcohol and wine and pharmaceuticals in general. Really right, so this is just purely from the business and economic point of view. There's a huge amount of logic to just regularize this industry so that those people who are involved in the industry already and it's, you know, a shadow industry it can just become a regular part of the economy and, and you know people who have small businesses and you know providing security systems you know that's a whole other area that can open up. It's the kind of, you know, that's how the american economy works, from a very tiny micro level all the way up to the macro level of biggest institutions.

Speaker 2 41:20

So you know, just it's an interesting area that we're watching yeah, I know, yeah, I totally agree with you. That's just, it's fascinating and it felt like there was a movement a couple years ago. Then, after COVID, everything kind of got, you know, slowed down again and it's kind of been limbo. I don't I haven't seen much action on it but, like with anything getting with the U? S government, nothing was fast.

Speaker 1 41:42

I think that's what we saw going forward and now it's going backwards. So it's a bit, you know. I think, yeah, there were. I think you're right that there was momentum and and just I I do. I don't have the document to pinpoint on this, but I had read generally that states that have legalized um recreational and medical use of cannabis uh have collected revenues that have balanced their budgets. So a huge social benefit there that's being missed out on yeah, I agree with that.

Speaker 2 42:11

Let's talk about your uh podcast. You both have a unique angle because most lawyers don't have a podcast, so kind of give a. What is about was, until what, what you guys focus on. You want to go rolling?

Market Sentiment and Interest Rates

Speaker 3 42:22

I go first really you want to do same yeah and uh, we're really proud of this. It's it's um been so much fun for us. You know, just becoming accustomed to this media having just what. What we're doing right now is literally recording a zoom conversation, and that's really what all these podcasts are, and anybody can get into it.

Speaker 3 42:40

But, you know, we just had this vision of trying to really bring authenticity, uh, to our, our business development, and so we created a podcast that focuses on trying to educate people about the types of assets that we help our clients create these alternative assets and so the podcast really is only possible because we're licensed investment advisors and there was a change in law in 2013 that allowed investment advisors to get more involved in the sales and marketing of a third-party clients securities on their behalf, like a broker dealer would, and so that's what we're really trying to do on behalf of our law firm clients. You know we're trying to say, hey, we can be your perfect legal secretaries, we'll get all your contracts right and your disclosure documents right, but we also want to help you sell your deals by exposing you to our overall network. We've worked with you. We've seen how you do business. We believe that you have integrity. We're not experts in finance and I mean, I guess to a degree we are really but we can help people assess deals and make sure that they're put together correctly and that there's thought and care.

Speaker 3 44:01

So that was really the vision with the podcast, and so we have episodes where Sarah and I will talk about legal topics focused on the alternative assets industry, and then also we have clients on as guests and the clients have securities offerings literally their investment opportunities that anybody can invest in, and so we're just trying to create this platform where we can talk with our clients about their deals and and just give them the opportunity, like what you're giving us the opportunity today here to talk about ourselves and the services that we're trying to sell. We're trying to do the exact same things with our clients and it's great because we've elicited some great client testimonials and we've gotten to know our clients better, and I think that our clients are appreciative that we go to the effort of trying to help them promote their deal. So it's been really gratifying for me I'm not going to speak for you, you can say it as well and it's just in this day and age of AI, we really I believe that authenticity is what makes this media so useful because you know I um stumble over my words.

Speaker 3 45:20

Well, people know I guess they'll incorporate that into ai eventually. You know, to make it more naturalistic. But, um, you know, people, people want reality and that's that's what we want to try to give them. You know, make make this topic of alternative assets investing. You know, dealing with attorneys make it more approachable.

Speaker 1 45:38

so well and to that just to go forward, the making attorneys approachable, I think that another aspect there's. There's also another one, which is just the education aspect, um, educating people about how to how to invest in a certain way you know what the framework is like, what to think about, but also invest in a certain way, what the framework is like, what to think about, but also just with a basic focus on knowing about investing and how to invest is a basic, fundamental life skill in the economy, in the world that we live in today, and people who learn that from their families or from people that they're close with end up quite often more secure in their later years. So there's a lot. So I think there's an education element here too. We can promote our clients. At the same time, we can promote financial education, fundamental financial education, albeit more specialized and more targeted towards people that are already probably investing.

Speaker 1 46:33

But, at the same time, knowledge is power in the sense that the more you understand, and so part of what we seek to do with our podcast is to take complex topics and topics. People like to push over in the lawyer corner and say, oh, that's for the lawyer, and just say, well, you can at least fundamentally understand these things. You can understand what your obligations are. You may not be the person that drafts the contract, because you need an expert to do that, but you should be able to understand what you should be saying when you read a document.

Speaker 2 47:01

You know, and I think that's another aspect of it yeah, that's, I mean, that's love that back because I'm a podcaster and I have a podcast booking agency, so I'm all about it is it's like you, to one's point it's the most autistic because you literally have a four, like we talked about before.

Speaker 2 47:17

You're literally getting to tell your story, build rapport, build a relationship with the people and by the time they get on the call with you or they want to do business with you because they know, like and trust you to know that you're the expert and you can add value to them, and it just comes down to what's your cost? How can we do business basically? Or can you fit me in if you're too busy? So, with your firm you have like it's on your website which is kind of unique. You guys got to explain kind of like you said, your CPAs will love us and it's kind of a distinct. You know I use one have like distinguishing factor in business. You guys want to break down kind of like how you guys differ than traditional lawyer law firms.

Speaker 3 47:55

You want to take that Sarah.

Speaker 1 48:07

Sure go ahead, okay. Well, you know.

Speaker 3 48:08

I think what that's really referring to is what we brought up before is Rollin's got a pickle in his throat. Yeah, you know. I think what that's referring to is we really try to work on an hourly basis, and so it just the number of hours that we spend on whatever the task is. That we're, you know, working on times, an hourly rate, and that's the way a lot of service professionals work, and it's distinguished from a fixed fee deal arrangement Boy, sorry about that. And we really prefer the hourly arrangement because in the end it always will work out to be in the client's advantage.

Speaker 3 48:53

And the reason why I say that is because when you have a fixed fee arrangement, there's possibilities for complexity to be introduced. That takes much more time to address, and so it's fine, we can do complexity. We always try to keep things as simple as possible, but the real overall message in this is that we try to help our clients do things absolutely as efficiently as possible, and really that can be done best on an hourly basis, because everybody knows that the clock is ticking. Whenever I'm working on a deal, we're talking on the phone, but you just have to believe that we really are doing that. We're not just lollygagging around and just billing imaginary time. I mean, we actually bill the, you know the bill the actual time. But maybe let me let Sarah speak to it, since I'm coughing.

International Investment Challenges

Speaker 1 49:50

Well, I just want to add that the structure of Graywell Martin is what's considered a distributed or a virtual law firm, which has become more common since COVID. But Gray-Martin actually started more than a decade ago with this kind of format, and what it does is. It means that we have pretty minimal overheads. Especially in the finance industry, there was a trend for a long time where people like to come into a fancy office, kind of like when you go to an investment bank, for example, and there might be some fine art on the walls and really nice furniture. All of this is impressive, right, and. But you're paying for that because that gets built. I mean, the lawyers have to make money for the bills and to pay themselves, and and so with a, with a virtual firm, then when you have, or in any firm that does things differently and is more economical when it comes to the space that they use, then you're able to charge rates that are a little bit below what those upmarket firms would charge, and I think that's what Grayville Martin does, and there are other firms that do this too and that is that we were able to we're all pretty much senior attorneys If we worked in the big firms that we all used to work in, we'd be charging really high hourly rates and that adds up for clients and it makes legal services inaccessible for a lot of entrepreneurs and people that are just starting with their first or fifth commercial real estate project or forming their first private equity deal or fund. So we're able to, with the elimination of most overheads, we're able to reduce our rates considerably 30% to 40% below what you might pay for the same kind of services from a big firm.

Speaker 1 51:36

Then also, in addition to that, because we're a smaller firm and we're all very independent, we don't have a very, very strict hierarchy about how we provide our services. So what that means is that we can be very personable. It's very nice to have close client relationships that don't require a certain kind of hierarchy and sort of pecking order. I mean, when you work in these really large firms, there's a definite sort of expectation about how, who talks when and these kinds of things, how many people come to meetings, all of those things.

Speaker 1 52:13

With a smaller team, we're much more agile and we're able to work closely together, roland and I, and still take care of our clients and get to know them and become friends most of the time, because, in the end, you know, one reason that Roland and I started AIM and also Roland, a few years ago, thought to register as an investment advisor is exactly because we want to help our clients with their legal work and solve their legal problems for them, but we also want to see them be successful with their businesses, which involves raising capital, capital and that's what we can support with, uh, with our, with our podcast and with our investment advisor business yeah, that's nice, great having both angles to that, which one, I could tell, sir, is very, uh, well, well, versatile, educated, was one.

Speaker 2 52:54

I asked both of you, but I'm just intrigued what, uh, what's your favorite book or the book that inspired you both the most?

Speaker 1 53:03

I have some very interesting choices in literature that inspire me it's probably nothing to do with business, but yeah, just um, you know, I suppose I've I've read, I've read, I read a lot of um.

Speaker 1 53:18

But fiction, that is literature, fiction. And I am thinking of a book that I read. That was I think it may have been a Pulitzer Prize winner, I can't remember the title of it, but it was actually about, randomly, it was about a family and it was about a various, a suite of characters that were in North Korea, and it was based on his, it was based on actual research. So it's one of these books that's written, that's kind of got a fictional story, but using actual facts based on what you know has been researched, academically researched, and it it helped me. I often think of that book when I think of difficulties that I'm having in my life today or difficulties that I'm having with the political environment or the economic environment wherever I am, and putting it in perspective keeps me thinking. You know, we have so much going for us. We can make our world better, and one way to do it is with this entrepreneurial spirit that we have to build our global economy, and that's everything you don't have in North Carolina, north Korea obviously, yeah, exactly.

Speaker 1 54:32

Yeah.

Speaker 3 54:34

And Roland, I've got a really different answer. And it's the greatest movies that were ever made, but the greatest books for me the lord of the rings by tolkien, nice, nice, and, and I mean I I guess it could go with further explanation, but as I've grown older, I've just really appreciated how it's this story about this really diminutive being a humble, being a hobbit, you know task with this, this incredible, you know task, and he ultimately fails in the end even, but it's just uh, he succeeds because of Gollum, I guess a spoiler alert, uh, but in any event, it just always really inspired me that that story, I guess it's, you know, and nowadays it even has some, some powerful female figures in it, even though it was written in the mid 20th century. So that was it.

Speaker 2 55:32

Yeah, I love it. Great movies too. By the way, as we wrap this up, the books are better as always, I mean even better than the movies yeah, it's always uh, that's always the case. But, as we wrap this up, who would be your uh ideal clients or who should be reaching out to you, uh, or even lawyers for referrals, kind of like, and how do I contact you guys?

Speaker 3 55:56

well you want to start. Sure, yeah, I mean the perfect client for me. I really like working with the investment funds and I've always had a real affinity for the guys that have their charter financial analyst designation. I've always felt like they're super intelligent. So I'm really saying, talking about a big hedge fund fund, that would be my ideal client yeah, I think I've worked over the years with a lot of investment bankers and um.

Cannabis Industry Legal Landscape

Speaker 1 56:27

I think I like working in this space, that's um deals that are under 100 million. I think you can get more personal and you have people that are going through a wealth, who've already been through a wealth building journey. They've started off smaller and they're going to big and so they're kind of starting to do bigger and bigger projects. I think a lot of family offices fit in that space too, where you know around the 50 million mark maybe you could say 50 to 100 million being, of course, a huge amount of money. But also you have a stewardship when you work in a family office aspect to it depending on the dynamics of your family, and often there's a lot of mission-driven work in that space and I really like. I think my ideal client is a family office that's got significant assets but also is small enough that they still want to be personable.

Speaker 2 57:22

Yeah, I love the family office space. I go to some of the conferences every year, so it's great, yeah, it's really.

Speaker 1 57:26

It's really important globally to Roland. You and I have never really discussed this, but you know family businesses and family business empires and all over Asia, I mean that's where the real strength of Asian economies, economies come from yeah, singapore especially, yep, yeah, and besides, the middle east too.

Speaker 2 57:42

But and then what's? And you know, I guess we have to mention what's. So what is uh your best uh website, email, best way to contact you?

Speaker 1 57:54

um, yeah martin.

Speaker 3 57:55

The graywellmartincom is our website, but then also we've got altinvestingmadeeasycom. That's for the podcast and that has all of our contact information on it. And then you can find us on YouTube. Our YouTube channel is Alt Investing Made Easy and we can give you a link to all of that.

Speaker 1 58:18

Yeah, we can send you that If you want to put it in the show notes or yeah, of course I'll have all your details.

Speaker 2 58:24

Yeah, I'll communicate after.

Speaker 1 58:26

Emailing is a great way to reach us. Being diligent attorneys, we always respond to email.

Speaker 2 58:32

Love it, Perfect. Well, thank you, Roland, Sarah. So much for your time and insights, expert insights. I know we've got a little pretty-depth in some of the topics, which is really cool. So thank you guys for your expertise and your time. Thanks for being on the show.

Speaker 1 58:46

Thank you, Jonathan. Thanks so much for having us on.

Speaker 2 58:50

Hey, it's Jonathan. Make sure to download Listen Weekly, as I bring the top lawyer guests sharing their best insights, providing exclusive resources and most actionable advice. Finally, I get a lot of people asking me to help them one-on-one. Yes, I can, but it's very limited. Go to revenueascendcom for lawyer Google ads, seo and CMO consulting For commercial real estate investing. Go to midwestparkcapitalcom and those that can invest in service-based business roll-ups, go to businesscashoutcom. And finally, get Podcast Bookings, a top podcast guesting tour agency. All links are included below. Please like, comment and share this podcast with your friends. Thanks for listening.