Behind the Raise
The behind-the-scenes playbook for founders navigating private capital raises. From Reg A+ to Reg CF to Reg D, we share real strategies, real mistakes, and the frameworks that turn investors into believers.
Behind the Raise
The Future of Online Capital Raising
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In this episode of Behind the Raise, Martin is joined by Tariq Esmail, VP of Sales at DealMaker, for a conversation on what is changing across private capital markets and online capital raising.
Together, they explore how issuers can approach direct-to-investor fundraising, what separates successful raises from underperforming campaigns, and why owning your investor audience can become a long-term strategic advantage. Tariq also shares insights from the front lines at DealMaker, including the rise of self-hosted capital raises, the importance of issuer commitment, and where private markets may be heading next.
Welcome back, everybody, to Behind the Rays, the podcast where we pull back the curtain on what's happening in private capital markets raises. And today we have a very exciting guest, the VP of sales at Dealmaker, Tarek Ismail. Very excited to have you here today, Tarek, to talk about everything that you're seeing on the front lines of capital raising with your team and everybody at DealMaker. You guys have really been at the forefront of the industry. So every time I talk to an issuer, they're super excited about what you guys are doing. And uh we've really enjoyed working with you guys as well. So welcome.
SPEAKER_00Thanks for having me on, Martin. You know, it's a funny story. My own director of marketing said I don't have the personality to host our own content series. And that was really hard because in fourth grade a different bully told me I have a face for radio.
SPEAKER_02Okay.
SPEAKER_00Yeah. So I really had nothing going for me until you invited me to be here. So thank you.
SPEAKER_01Well, maybe we can prove them wrong today. I've always seen you as a great storyteller. So I think that this could be the breakout episode.
SPEAKER_00We'll see how we do.
SPEAKER_01Yeah, let's see it. Well, so for the people that don't know you, maybe rather than me, you know, hopping into things telling your story, but give everybody a little bit of background on yourself, how you found yourself in the capital raised space and uh your journey to get here.
SPEAKER_00So, born and raised in Toronto, where where we're sitting right now, I spent pretty much my entire career in sales and venture-backed SaaS, uh, series B and C companies, all coming up through the ZERP era, and that's really all I knew. And that's where you and I met back in 2018 at League. Yeah. Amazing company, Series B at the time, health tech company led by Mike Cerbenis, this pedigreed founder, right? He was, I think, a theoretical physicist, turned down NASA to work with Elon Musk, and then just started selling businesses like crazy. So it was super exciting. But you know, I spent 10, 12 years in companies that all looked and felt pretty much the same. A couple of those turned into unicorns, got that big billion dollar valuation we were all marching towards, but still no exits, like no IPO. Uh I'm certainly not exceedingly wealthy as as as was promised.
SPEAKER_01Not yet. Not yet.
SPEAKER_00So it didn't really work out the way I thought it would. And I think a lot of people thought it would. And I was really looking for something new. And I found Deal Maker. And Deal Maker, you know, similar size, 200 people, profitable business, growing about 50% year over year. But the mission was to help more founders raise capital and to raise it on their own terms, right? So that was just really, really exciting to me. And that's how I ended up here, uh, Dealmaker about two and a half years ago.
SPEAKER_01That's awesome. It's so funny how we have managed to cross paths through that journey as well. I think going back to the league days, it was a pretty incredible time. It was the yeah, the ZERP era was one where you're like, how long will this kind of go on for? And we had a good run, and but things changed pretty dramatically afterwards. I think the team that we had at League was like kind of an interesting, almost like the A team of sales, I think, during that that era, at least in the Toronto Tech scene, which was awesome to have that team assembled together. But then um, you know, we both went separate ways. I started my journey with virtual ad around 2020 with Brendan, and uh we went through a couple of iterations and then we also landed on the capital raise space. And I think I was posting on LinkedIn one day about one of the raises that we did. And uh, I'd been following you on LinkedIn as well, but I hadn't really made the connection exactly what you guys were doing. So it was so funny for our first meeting where we're both because you had just recently started at DealMaker, right? And so just kind of getting to familiar with what you guys were doing and what we were doing. And our process was a lot more manual because we were working with issuers only in Canada at that point. It was working with like EMDs, trading paperwork around, super manual like sales process. So when I learned what you guys did, I was like, this is the solution that the industry has has needed.
SPEAKER_00It's so wild that we both ended up working in this space, which is still pretty niche. And then to add to the coincidence, our offices are next door to each other, or you live like five minutes from me.
SPEAKER_01It's actually wild. It's it's crazy when I uh like my your guys' Wi-Fi network actually shows up on my Wi-Fi. That's how close our offices are together. That's good. I'll send you a bill. Yeah, yeah, yeah, yeah. Exactly. Now that we have a little bit of the background in there, I'd be kind of curious to learn a little bit like what how has the journey been since joining DealMaker as well for you? Because I know that you guys have had a lot of growth since you joined. So I know you're a humble dude, but I I do feel like you're a pretty instrumental part of that. Uh, so I'd love to hear a little bit more about what that's been like for you.
SPEAKER_00Yeah, it's been so, like I said, two and a half years for me at Dealmaker, and it's it's been amazing, right? I was coming from just SaaS tech sales. I knew nothing about the capital markets. It was pretty like I was like a fish out of water when I first showed up. I had this sales team, people had been there a few years looking at me like you don't you don't know anything. I'm like, yeah, you're you're probably right. I don't. But it was pretty, pretty clear, you know, when I showed up, like what was going on in this space, right? Some companies do this so, so, so well. And a lot of them just aren't that successful. And you know, it is what it is. It's an online capital raise, it's best efforts. You can't manufacture retail demand for your offering. Yeah, you can really capture it, you can find that audience, warm them up, and get them interested, but you can't just create it, you can't manufacture it in that way, right? So, you know, my mission from day one was let's do everything in our power to find the right companies and like what does that look like? And when I first showed up, the only people who really had a firm opinion on that was our in-house marketing agency. They do, you know, pretty similar to what you guys do with some different specialization. And they would just be telling us, like, yep, I like that company. I don't like that company. Right. I can take that to market. Yeah. And I'd be like, what is it that you don't like about it? Can we dig in there? Right. Because I'm trying to build this team of sellers who can help guide a potential issuer through this process and understand like where are they a fit? Like, what is it that makes them strong versus not? And what kind of things they might consider leveling up before really going for it. And I'm trying to train a team of, you know, 10 and now 20 young sales reps on like what to look for. And they're not investment bankers, right? They uh know for the most part as much about capital markets as I do now. They're not really experts, but it was a bit of an art and science, right? We're trying to create this scoring and this coding to say, you know, here's what we believe about your potential. And there's still so much quality, there's still an art to it that goes into like knowing if it will really pop, right? And and we can dig into that, I think, in the in the episode today on like what we see in winners. Um, but my mission was to find the right companies. Yeah. There's a lot of companies that just want to raise capital, they want to come on the platform. You know, a lot of founders have amazing visions, they built amazing businesses and they really believe in them. And they all believe they're gonna be insanely successful if they go online, right? I just have to put it out there and everyone's gonna come flopping. And you know, maybe if you're the Green Bay Packers and you have that type of audience backing you, like sure, throw up a page and they're coming. But if you're not that, it's it's a real marketing effort. So we've been really, really focused over the past couple of years on finding the right customers. In that time, we've been able to double the average race size on the platform, which is exciting. That means our issuers are getting more value. It's also obviously good for our business economics, and we can put more and more effort into every single file and every single raise. And one of the exciting things about the space is that it's it's very public. Like these raises are done in public. There's this viral growth you can tap into where if you're out there and you're doing these big raises, well, like millions of people are seeing it.
SPEAKER_02Yeah.
SPEAKER_00And that drives the awareness that we're looking for to take it from, you know, kind of niche to really, really mainstream. So that's been my mission. Bring in the best possible customers, get the average raises up as high as possible, and then drive category awareness by doing those bigger raises as well. Sounds like you have a good plan. You can say that. I'm glad it's all coming together in retrospect. It sounds like the perfect plan. It sounds really good. Yeah. If you asked me that, you know, two and a half years ago, a year ago, would I have been able to articulate it? No, it's I'm I'm looking back, I'm doing the reflection. Yeah, yeah. Yeah, I guess that's what I was doing. I'm sure it was so deliberate.
SPEAKER_01Yeah, yeah, yeah. I'm sure it was very, you know, like iterative throughout. But yeah, it's interesting, like what you said about the, you know, I think getting into capital markets from our background. And, you know, you always hear this where it's valuable to have an outsider's perspective coming into a different space. And I've always been like, is it really like it's probably better? We we saw this with the insurance space too, right? Like we were kind of outsiders, we got into insurance, and there there was a level of insurance knowledge you needed to be able to really be impactful and and all of that. But I I have found in capital markets, there's been a such a traditional way of doing things. That outsider perspective really is is helpful. So much money in it. There's so many institutions, like so much surrounding it that it's very interesting that there has been so little innovation going into it. And so I did find that like that outsider's perspective has actually been very helpful. And especially when you're talking to like, you know, issuers that have a there, they might even be really well seasoned at raising funds, but they haven't really done it this this particular way.
SPEAKER_00And that's the thing like that I've found here is as much as it's learning about capital markets, it's more so about understanding online marketing, right? Yeah, in a way, which you're an expert at. And I've worked in tech and sales for the most part, so I'm exposed to what does a marketing engine look like. Yeah. And to, you know, the history of the capital markets is not in online marketing primarily. Yeah. Um, probably a lot of hand-to-hand combat and meetings and roadshows. And that's to me, that's very old school, right? We live in a generation where unicorns are being built on Shopify, they're coming online, and they've maybe never met a customer in real life. So you kind of bring that lens to capital markets and say, why can't we do that? Yeah. The same way.
SPEAKER_01Yeah, totally. And I guess so, for the benefit of the audience, which is, you know, largely going to be issuers-based, how would you describe DealMaker to them? What do you guys do that's different in the space from others? And you guys have had some of the most successful capital raises out there. You've raised the, you know, I would say it seems like the most capital out of the platforms. So yeah, just, you know, from your mouth, how would you describe it? And how would you get issuers familiar with what DealMaker does?
SPEAKER_00Yeah. So if you're starting from scratch, I would actually just start with the analogy and and we just touched on it. It's a lot like Shopify for the capital markets. Yeah. You're setting up a web store, you're running a marketing campaign to attract, acquire, and convert investors at scale, right? Thousands of investors at a time. Um, except instead of selling t-shirts or shoes or whatever the big verticals on Shopify are today, you're really selling securities. So that's our approach, right? It's a raise that's done on your own site. You're developing and cultivating your own audience, your own investor list. You're nurturing them, you're educating them on the opportunity you're after, your traction, your big releases, your big updates, and you're hoping to convert them to investors. And because you own that list, you're actually gonna keep them warm, keep nurturing them. And every year, two years, you're gonna raise from them again, or at least that's what most successful issuers do. So, like you mentioned, yeah, we're we're pretty big in the space of you know online capital raising to retail investors. We do about 50% of the volume in that space is done on dealmakers tech, uh, which is awesome. It's about the amount of all the other platforms combined. Um, but the key difference is because of our approach. If you, when you come and look at the space, you're gonna see two approaches to it. You're gonna see what we do self-hosted, white labeled, own your own data, own your own investor list. That's kind of where we play. And then you're gonna see the marketplace approach. And that's pretty much everyone else. They looks and feels like a Kickstarter. You list yourself alongside, you know, potentially a hundred other deals, pretty standard format. It's a fixed community of investors. They may or may not have any direct, you know, affinity to your brand. They're just seeing you in a marketplace and they're like, yeah, you know what? I might, I might participate. And those investors are you know being solicited, you know, many deals at a time. They may invest in you, and and if they do, they probably do like your company for some reason or another, but they're in this portal, they're constantly being marketed other deals and stuff. So they're not really yours. So with ours, you own the raise, it's yours, you own the audience. And so we become specialized in these larger raises, right? When you're raising capital online from retail, it's pretty much up to 75 million.
SPEAKER_02Right.
SPEAKER_00These marketplaces are really good in the few hundred thousands.
SPEAKER_02Yeah.
SPEAKER_00Um, if you're looking to raise, you know, above two, three million, and if you're raising up to 75 million, like that's where we play. Right. Um, and that's how we've kind of captured a lot of the volume in the category, which is still growing, and we're excited about it.
SPEAKER_01Yeah, I love the Shopify Amazon analogy. I feel like that's the clearest way to understand it. And also from a marketing perspective, when I look at it and the value of traffic and how you know you're trying to prevent a leaky funnel. Yeah. And so I find the marketplaces, you know, they're interesting because they have a level of exposure, but there's gonna be some leakage in the funnel. And I do feel like those communities get tapped out pretty quickly because they're also not growing exponentially and they're looking at smaller ticket sizes. So regardless, you're gonna have to invest in your own audience development.
SPEAKER_03Yeah.
SPEAKER_01And I do find that you had a good point as well around the the scalability of it. So if you're looking to really go on a large scale, you will primarily be relying on your own audience or you know, investor acquisition.
SPEAKER_00Because of that model where you it's the data, right? Because you own it's every investor, but also every person who really engaged with that campaign, which is five or 10x, the actual people who convert.
SPEAKER_02Yeah.
SPEAKER_00Because you're building up that list, like the companies that have been on our platform the longest today, you know, they've now raised 120, 130 million dollars lifetime. They've been with us five or six years. So they've made this kind of a core part of their capital strategy. Yeah. And there's a ton of reasons why that's that's beneficial, but but we can get into that as well.
SPEAKER_01Yeah. I mean, it's uh I think it's got to be so life-changing for a company to raise that amount of funds directly from either their customers, you know, investors from that are just you know purely financially motivated, but even from the raises that we've done that have been successful, like it's absolutely game-changing for those companies. Like it's it opens so many doors for them.
SPEAKER_00Yeah. The way I think about it. And and those the companies that are raised in this way are also raising from institutions as they should, right? In the same way that they'll take on debt, like really about having a diversified capital stock. The capital markets are really cyclical. We're we're seeing that right now. All the money's going into like two companies. Um, you know, a lot of companies plan the traditional, like the companies we came from, I came from was every two years we'll go re-up on a VC round. Yeah. And there's something like you know, a thousand unicorns that don't really have a path right now. Yeah. I assume they're gonna pivot into AI data centers like Globbirds. Otherwise, I'm not I'm not sure what the plan is.
SPEAKER_01Yeah, yeah. Do you have any like uh favorite deals that you guys have worked on or that you've been involved in personally that stand out to you either because you know it's just been a cool story, cool company, big raise, anything that that stands out to you that's uh super memorable?
SPEAKER_00Yeah, absolutely. So there's like some of the obvious ones. Like we always talk about the Green Bay Packers one, you know, obviously one of the most recognizable brands that's done community fundraising in that way. And we're really lucky they chose to do it on Deal Maker back in 2021. They have a history of doing this for a hundred years. It's really interesting because you look at the town of Green Bay as is tiny. You'd ask yourself, how do they have an NFL team? They're the smallest you know city with any pro sports team, let alone one that has a val a brand value that's on par with like a Chicago or something, right? Um, so how do they accomplish that? And you know, this isn't just like our you know narrative or spin. Yeah. Like go on Google and search it, and the Gemini AI is gonna be like, well, it's community-owned, so it stayed in Green Bay for a hundred years, and the fans just love it so much. So the reason we like Green Bay so much is it kind of like speaks to the power of getting your community bought in and how it creates this brand value, not just like raising capital this year or next year, but when you think out 10, 20, like in Green Bay's case, a hundred years, yeah, the kind of impact it has on that business and the moat it creates for them is pretty wild. But that's just like a big flashy name. It's so recognizable. One of my favorite deals on the platform is one that I've been working with directly. They're live right now, so I can't say their name. Okay, okay. But they're they're totally mission-driven, very successful business. You know, I think they're between 50 and 100 million in revenue, ton of funding, and they're in recycling. Okay. Um, a lot of stuff that we use every day, unfortunately, espresso pods, little pouches for my kids when I send them off to daycare, these things that are really hard to recycle. Yeah, they recycle these things. And uh they're all about it. You know, like I visited their offices, the entire office is made of just reused materials. They've got this lab where they're experimenting on how to recycle things. Awesome. And so it was really, really cool for me. I've been obviously getting close to them. They're a very successful company, but to like go down there and like get in the office and you know, it's one thing to have this story about like what you do and the mission and whatever. And most companies go to market with some mission or another, but to like go on the inside and see if they live it and like they really believe it and the people there are all about it, really, really refreshing. But live raise right now, I I cannot direct you to them in any way. We'll do some detective work and and work backwards. Do not do that. I I did not tell you to do that.
SPEAKER_01But I I like what you said though about the the mission part of it because I actually think the mission is so important for a lot of these more like I don't know, we have the real estate raises and stuff. Those are a little bit less dri mission driven. They can be mission driven in terms of you know driving investor returns or helping to diversify people's portfolios, but it's a that's a bit more of a financial mission. But I find the the startup companies, the mission is actually so critical. And I find it one critical from a narrative perspective, but then also from an audience perspective where the mission can help you attract different types of audiences. So, you know, you have this, the, the recycling company example, but then there's also like, you know, companies focused on sustainability, or we've worked on that uh, or agriculture raise as well. And we found that because of that mission, it attracted people from a broader audience that weren't just focused on what's my potential financial return, but it's more mission-driven people that are they want to help these companies succeed because that's the type of change that they want to see in the world. And if you're just primarily focused on like the financial outcome, you're gonna really only get maybe your tech-focused investors or your your financially motivated investors. But if you don't have a clear mission, you might miss out on that audience that is super aligned with what you're doing, you know, actually knows nothing about the tech or isn't even financially motivated, but they're like, yes, I will put $5,000, $10,000 into this because there's some upside, but I just want to support the success of this company. But I can't buy the product because it's too B2B or something like that.
SPEAKER_00Yeah. So you're you're actually touching on, you know, what we see from the there's we kind of profile, like I mentioned, like we profile these companies around who's gonna be successful in the space. And you can look at it and you can broadly bucket it into two groups. Yeah. Okay. The one is the one you're describing. You've got a really, you know, powerful mission or just a beloved brand with an established community. And they're they're highly engaged and they absolutely love the brand. So the Green Bay Packers would be an example of that, but you don't have to be the Green Bay Packers. We did a raise for a company called the Flyover, they're a newsletter. Yeah. They have two million passionate readers. Yeah. Um, they raised five million dollars in just a few months and they did it super cheap. It was from their own audience. And in the process, they doubled the readership from two million to four million. And so the investors there, they're less concerned with the financial upside.
SPEAKER_02Yeah.
SPEAKER_00They just want to support the brand. They love it. They love what the flyover is doing. Um, it's all about the mission and the connection to the community. The other type of company that's quite successful is a little less about that connection to the brand itself. So, again, live raise right now, so I won't name them, but you know, think of you know, an IP heavy, high capex business that's in a very, very hot category. So you might be thinking lithium extraction backed by the Department of Energy.
SPEAKER_02Yeah.
SPEAKER_00Um, the investor is going after this deal, and this this Razor is very successful. Investors going after this deal, just really want exposure to the category. Yeah. And they're looking for that third-party validation that, oh, Department of Energy is involved, or you know, the venture arm of a large automotive company is involved. And so we see these, we kind of bifurcate our target market into these two audiences. The one, the beloved community brand with the mission first, and the other, which is a really hot category. Yeah. Um, if you crack it, you're gonna make it big, but it takes a ton of money to crack it. And so the investors are like, yeah, I want a piece of that.
SPEAKER_01Yeah. There's been a lot of uh interesting raises in the in the energy sector recently, which has been interesting to watch. But yeah, super capex heavy, a bit of a journey to to get through. But the upside once they either, you know, build the facilities or whatever can be can be pretty high. But that's been an interesting change, I think, over the past year or two. Yeah. I did find it also interesting what you said about the diversified capital strategy as well. Going back a little bit, but I also found that interesting because I talk to companies as well where they're either looking at, you know, making this the primary channel of capital raising. But I feel like you actually open more doors when you can raise capital this way because it shows momentum from a retail perspective and almost make you more competitive if you're speaking with institutions because you're less reliant on them. So I almost feel like it actually makes it easier to raise in other avenues if you can do this successfully.
SPEAKER_00Yeah, it's I mean, it's an excellent point. And you'll you'll see some institutions, they you you'll see different opinions on it. On one hand, if you can prove that you can raise capital from retail in that way, it's a really good signal. It validates your narrative, it validates that a potential IPO would be successful, like a lot of things an institution has a vested interest in, but a lot of them just don't understand it.
SPEAKER_02Yeah.
SPEAKER_00Right. And kind of what you're saying like if a founder can create leverage at the bargaining table because They have a source of capital on terms that they set, right? If the interests of that institution are not super aligned with that founder, they they could view that as a competitive threat. Yeah. I don't know that they do. Um ultimately, like in in most cases, I I personally don't see this as a full replacement for other funding sources. Yeah. Um, you should find every way you can to properly fund your business and you should be aware that this year at maybe an institution and in two years everyone's in AI and that's not you right now. So you need to have something else to lean into. Otherwise, you know, your staff, your customers, your earlier investors, you know, you're gonna just close up your doors if you're not you know building a data center right now. Um so to me, it really is about like diversification. Yeah. And that it brings me back to like why I wanted to join DealMaker in the first place. Like you look at the capital markets, it's 80% of the VC money right now is going to AI and AI infrastructure. Half of that VC money, like we mentioned, is open AI and anthropic. Like this is higher concentration in one sector than I think like ever. And that's the private markets. On the public side, uh, it's not significantly better. Like everyone's obsessed with the Mag 7 stocks. Yeah. And as a relatively unsophisticated individual investor, the first thing I'm taught is diversify to reduce your risk.
SPEAKER_02Yeah.
SPEAKER_00And I'm looking at what's going on in the markets, and I'm like, hey, society, maybe we should diversify to reduce our risk here.
SPEAKER_02Yeah.
SPEAKER_00Um, and from the same lens, if you're a founder, like, hey, diversify your cap table, diversify your your capital stack to avoid that risk. Um that's how I think about it.
SPEAKER_01Yeah. That makes a lot of sense. And um one of the things I actually I thought would be helpful is um a lot of I guess issuers that we speak to, you guys speak to, one is that they're just getting familiar with this space in general. So they're like, okay, I've got to raise some money. There people start out with friends and family, they'll go sometimes the VC route. Then they'll learn a little bit about private markets, the way that we raise capital, but then they're sort of looking at the then they start to learn about the different platforms that are out there. So how do you recommend an issuer to navigate the platform decision? Like what should they be looking at in terms of what platforms the right fit for them? How do you sort of help them navigate, obviously fairly objectively, but um how should they be looking at it when they're like, okay, I want to raise, you know, direct to investor, I want to choose a platform. What are some of like the major considerations you you would recommend for an issuer to look at?
SPEAKER_00Yeah, so I mean, first thing, the nice thing about this day and age, and particularly this category, is everything is quite public.
SPEAKER_02Yeah.
SPEAKER_00Um, the raises are disclosed publicly, the marketplaces that host them, you can go on and see what they're about. Uh but more than anything, you have like third-party kind of industry resources. I would check out King's Crowd. King's Crowd will give you the lay of the land. Who's raising? Where are they raising? What do the metrics look like? Like, what's the spread of the market? Who's doing well in Reg CF, which is a smaller raises, who's doing well in Reg A is a bigger raises. So there's a ton of information out there to orient yourselves. What I know every single founder is doing is just asking ChatGPT or Plot, which is great. They can be helpful, although I think they're just regurgitating what they find on Reddit sometimes. You know, just like my professors would say, you got to go to the primary source, yeah, uh, get on King's Crowd and look at the actual data. It's public data, so you can see how the platforms are performing. But the things that you know I'd be thinking about, you know, are the key differentiation that I mentioned. You're really looking at two distinct approaches. Yeah. Marketplace versus self-hosted. With a marketplace, you're listed alongside other offerings, um, potentially a bit commoditized there. You don't really own the leads or the investors. They belong to the marketplace, they're being offered other deals all the time. But this method actually really works if you're just looking to raise a little bit of capital. Yeah. Um, and you're looking for something quick, something out of the box, quick and dirty, just get something up and see what happens. And if the outcome you're looking for is sub $1 million. And for a lot of early stage companies, that's all you need right now. Yeah. Right? It's awesome. It's really great. We're a little bit upmarket, a little bit institutional grade when you're going self-hosted. So it'll take a little bit longer. There's some more fixed fees up front. We're running a full marketing campaign to acquire you an investor list. So there's some hard costs associated with that. But if you're gonna take this type of fundraising seriously, and obviously I'm here, I think you should. If you want to create a source of capital that you can go back to year after year, you've got to own your list. You gotta do this on your own web properties and you gotta develop that that audience that you've built up. You need to, you know, just like any great company is gonna do their marketing and have their cycle of big announcements and press releases and developments. Yeah, you're you're cultivating this asset that you're gonna nurture and then can use to continue to fund your business. And with a lot of our companies, it's from not all not a lot, but some of our companies to date and more and more are doing the whole distance from seed to IPO to even exit. So yeah, we're that's kind of how I think about it. Like you really, the big decision to make is marketplace. There's a bunch of them, or you know, self-hosted our way. Yeah. Um, it's really a matter of like, okay, do I want to do this right? Am I committed to it? And am I looking to raise millions and millions? Or I am filling it out, you know, small amount of money's cool, it's quick, it's easy. Maybe I don't have to spend on marketing or whatever, then I would go to the marketplace. The other consideration is if you are a brand who's already built up an audience, if you go to the marketplace, you have to put your audience into the marketplace. You're kind of like a lot of people don't really want to do that. They obviously understand their community is an asset. So you may not want to just intermingle it into that community. That's kind of the trade-off. So if you do have your own community, there's a ton of reasons why you know self-hosted makes sense. Yeah. Um, but it's not, I'm not here to just be self-serving. Like ours is a bigger commitment, cost and time. You take it seriously, you commit to it, and we try to build a repeatable source of capital for you.
SPEAKER_01Yeah, I think that's a good point, is that as an issuer, it's it I find the best issuers are like fully committed to this as a capital raise strategy because there are ups and downs, especially if you're, you know, raising for the first time this way. It's a little bit of period where you have to figure out the marketing and there's a like that figuring it out period. And the issuers that I've seen done well are the ones that are like, no, like we're in this for the long haul. So, you know, we'll get over this hump and we we figure it out. And I feel like that's a big commitment that that you need to make because it's not a a great thing to experiment on, it's a great thing to commit to.
SPEAKER_00It's you're you're spot on. We always do retros in every single one of the campaigns on our platform, right? And I talk so much about how we try to identify the right companies for this. But when you talk to the people who market the campaigns, like yourself, we have some people in house who do it as well. It's it's all about the commitment. Like, did they dedicate, did the company dedicate the right resources to marketing it, or did they fully hand off the keys to an agency like Virtual Ad and let them run with it? Yeah. And do they understand the mechanics of that marketing campaign that, yeah, you're gonna be spending initially to test and find that signal, figure out what channels are working for you and what creative is working for you, and optimize and scale around that. And for a lot of folks who are coming into this, if they're not that familiar with what it takes to build a marketing campaign like that, you know, those first 90 days is spend, spend, spend, spend, and it doesn't look like anything's working. And you know, if you're a marketer, you're like, you know, you got to trust the process, okay? We're looking for signal, and when we have it, it's gonna be great. But you're in that trough right now where we're we're finding signal and and it's costly. So it some people kind of get cold feet there.
SPEAKER_01Yeah. I mean, it's it when you think about like bringing an offer to the market for the first time for investors, like it takes a little bit of time to get some traction. It's like I always talk about like the layers of messaging you need to go through for for people because it's like when these companies are generally pretty new and innovative, so it's like we gotta explain the company. Yeah. So people gotta understand the company and then they have to explain that they can then they have to understand that they can actually invest in it. And so there's like a lot of layers for people to be like, oh wow, like this is really interesting what this company does. Oh, I can become an investor. So it it takes a while for people to fully wrap their head around the concept and then also develop the appetite to to want to invest. And so that takes a you know, layered, it takes a some time to work through the actual explanation level of the messaging and then really having a strong call to action of it. And if you're bringing that offer to the market for the first time, it's you know, it's gonna take more than 30 days to nail that down.
SPEAKER_00And I think that's you know, you kind of mentioned it earlier. Like if you have this idea that, you know, you're gonna throw up a page and people are just gonna whip out their credit card and start converting. No, it it's a marketing funnel, right? It's awareness, interest, decision, action. They're gonna get exposed to you through an ad or something you posted. They're gonna end up on the landing page, learn a little bit more, they end up subscribing or being retargeted or resequenced, and then they're being hit with different updates and all of a sudden they're being educated on the opportunity that you're after, the space you're in, your big milestones, and they're warmed up until it's time to convert. So that's all the magic that that you're doing.
SPEAKER_02Yeah.
SPEAKER_00To you know, find them top of funnel, mature them, develop that interest, get that intent going, uh, and then convert them from theirs, which, you know, in other contexts, if we're just, you know, talking e-commerce marketing or even selling B2B SaaS, yeah, we understand it super intuitively. Yeah, the capital raise process we're doing here isn't that all that different.
SPEAKER_01Yeah, yeah. And I I'd be curious to hear your experience or what you guys see on a couple of your raises, like one thing that I've realized is that it's an interesting stat, but I've noticed that there's certain investors that convert like really quickly, and then others that will convert. There's always a big push at the end of the raise. But I find the ones that are converting mid-raise tend to convert like fairly quickly within 24, 48 hours sometimes. And do you guys see that as well on your end? So, like the way that I would describe a raise kind of goes is there's, you know, a pop at the beginning and then it sort of plateaus a little bit. There's always that like middle part that's tough to make it through because you got to get past the halfway point, past 50% or 70%, which is like almost more impactful than making it to the end in a way, because that's sort of the tipping point, is where there's that signal of momentum. But what I've noticed is those investors' mid-raise tend to convert really quickly. So that the actual like um consideration period isn't that long. But do you guys, I don't know if you have, or I don't know, I've kind of thrown this at you a little bit last minute, but I don't know if you have any stats on that or if you've noticed that at all.
SPEAKER_00You might be asking the wrong person. Okay, yeah, yeah. Fair enough. Uh I'm on the sales side. So some of the nuances of what's happening in the middle of a race, maybe next episode, bring on Skylar, the head of our agency, or someone who I'm throwing you two in the weeds right now. That's okay. We'll have to cut it in post.
SPEAKER_01Going back to something that you said earlier, though, in terms of like selecting the platform, one of the things that kind of reminded me of the of the e-com days a little bit was the one thing that I've always realized is talking to a brand that launches on Amazon, their number one goal is how can I get off of Amazon? Yeah. That's like one of their number one thing. It's like, yeah, I'm gonna get on there because there's a captive audience looking for some, you know, my product, very bottom of funnel. But I can't wait to get off this platform because I need to sell direct. And so I it didn't really, I didn't really realize it until you brought it up, but that's like what I remember almost every e-com brand saying about when they're on Amazon, they're just like, I need to get off this platform and I need to sell directly.
SPEAKER_00Well, let's double click on the reasons there, right? That brand doesn't have any real connection to the audience who's buying from them on Amazon. Amazon owns them. Um, when you're scrolling through Amazon, unless you're going there looking for a specific branded product, you're just finding a bunch of listings of many companies that you don't recognize, yeah, effectively selling the same product, potentially came from the same factory and then you know, went to somewhere else to print a logo on it and then get shipped to you. So, right in the early days of a business, if you're a small business going on Amazon, yeah, like you don't have to think too hard about marketing. There's a bunch of people get listed on there, and it seems like a happy path to get some revenue in the door. Amazing. But you never develop your audience, right? It's really hard to grow, and obviously you're commoditized, you're in a race to the bottom against a bunch of uh 10 other listings that you know are indistinguishable from your own. Yeah. Um, hopefully you paid Amazon's become basically unusable with all the sponsored listings. By the way, I just I look at it and I'm like, can I get to an organic? Is there any way to understand anymore? Is there any way to understand the actual quality of the product I'm purchasing here? No, of course not. Um it's commoditized, so it's a race to the bottom. Who's got the lowest price? Who paid for the most reviews? And you know, it's Amazon, it's hypersaturated, it's a different beast. But if you're trying to build something and you believe in what you're doing and you're doing something unique and you want to have a mode and you actually want to scale it, you already know right, I have to own my customers. I have to own my customers. So in our space, it's it's kind of similar.
SPEAKER_03Yeah.
SPEAKER_00Um, obviously, the marketplace competitors we're talking about are not Amazon. Um, but you you see similar dynamics.
SPEAKER_01Yeah. Right on. What type of uh conversations are you guys having like internally about where you see private markets heading over the next little while? Yeah, exciting things on your guys' horizon.
SPEAKER_00It's really exciting, actually. Yeah. So the first one is kind of stems from what we were talking about earlier. Um, a lot of really exciting high growth companies that make amazing products and have a customer base, but otherwise amazing companies. Yeah, the next round that they were counting on it isn't really that secure. So, you know, in what is it in the crypto world, they say it's alt season. I think it's alt season, right? Okay. A lot of companies that were on the traditional institutional path are gonna be looking at all sorts of different ways to raise capital. Yeah. And I think this is one of them. Interesting. The other interesting thing that I'm so excited about is, you know, in the early days of this space, it was really just for companies who couldn't get funded any other way. Right. But it's matured so much. And you're seeing, you know, a Series C unicorn come on and raise 75 million from retail to add it, or a company that's raised 80 million from an automotive venture arm uh raising $100 million this way. So you're seeing that kind of diversification that I talked about, and you're seeing that mainstream awareness starting to happen. Yeah. Um, coming from you know, my tech background, I think of the adoption lifecycle. And I think the category is very much in the early adopter phase, yeah. But it's kind of stepping in and over the chasm a little bit, yeah. Where it's you're looking at the early majority, and the early majority needs markedly different things from the early adopters. Early adopters are like, I think I might be able to get value there and you know, I'll put up with some friction to try and get to it. Yeah. The early majority wants proof points, they want validation. It they it needs to be clear that this can work for them.
SPEAKER_02Yeah.
SPEAKER_00Um, so I think we're kind of crossing the chasm, and you'll see that in the space. Some of the competitors have kind of pivoted out into different business models. They're not really making it into that early majority. For us in particular, we are an upmarket offering. Yeah. And that early majority is full of household names that you'll recognize. Yeah. And so in our pipeline and some of the deals coming up, you're going to start to see really familiar logos going live with these raises. That's awesome. And that gets me super, super excited because we think this should be a part of fundraising for any business. And to be able to shake off some of that stigma of the early days of the category and show that very legitimate high growth businesses that do have the opportunity to return liquidity to their investors are doing this and doing this now. That to me is like a huge, huge turning point. So that's awesome. I'm excited about that. And then the tailwinds of, you know, the unfortunate reality that the private and public markets are just hyper-fixated on 10 companies. Yeah. I mean, in my opinion, the capital markets are working super well for 10 companies and like 10 rich dudes. Yeah, yeah. Um, and I think there's a bunch of tailwinds for our category for people to start looking at other ways to grow their business that doesn't isn't hinged on a double or nothing winner-take all mentality that was a trademark of the companies that I grew up in.
SPEAKER_01Yeah. And your guys, your your founder, Rebecca, also this was maybe about six months ago. So I don't know if it's like super recent news, but um, I think probably for us insiders, maybe not as recent, but probably interesting for the audience. But she also had presented to Congress, right? About changing some of the uh access to private market deals as well. So is was it about accreditation status or was it more so just about opening up the category?
SPEAKER_00All sorts of things, right? So we want the space to grow. Yeah. Right. And there's caps in place that are meant to protect investors and keep everything within a comfortable scale. And there's also disclosure requirements to protect investors and making sure that this is done the right way. And we're in we're in favor of all of that, right? We've seen a lot of what's I mean, crypto is super exciting, but you see, it's been a bit of a wild, wild west. Yeah. Um, and while we're not, you know, my stance isn't pro-regulation here. Uh we want to make it safer and more reliable and more predictable for everyone involved, investors and the companies raising. And the whole category came out of the Jobs Act, which I think is like 13 or 14 years old. Obama signed it. And the intent there was to help more businesses get funded and help everyday people get access to these opportunities with private companies to accumulate wealth. And that's something like we all really, really believe in. But it's such a cool thing about the categories. The rules were written at a time when whoever wrote them didn't really know what would be possible today.
SPEAKER_02Yeah, yeah.
SPEAKER_00And so as we go year by year and we're trying new things, we're doing these things, and our you know, in-house broker dealer is to talk to the regulator, and they're both looking at it and being like, we're not sure what the intent of the rule was. It's such an exciting space to be in. Yeah. To just be figuring it out together and like carving what this category is and can be around the rules in place and the intent of the rules, and of course, evolving those so that they really reflect what are the realities. Like, did the people who wrote that understand that you could just use a credit card to buy a security? Like, I didn't know that until I showed up at DealMaker. Yeah, exactly. That didn't make sense to me. I definitely didn't know that either. Yeah. Um, so there's just a lot of things to make sure that as the capabilities are coming online, we're developing new product, there's new ways to market campaigns, everyone is operating. And sometimes there's a bit of a gray area to just like bring clarity and definition to that. So Rebecca's a big part of that. She's a big advocate. She's very much because we are, you know, the largest platform in the space, she's very much a representative, a big representative of the space um and wants to make sure that it it comes together in the right way so it can be um fully legitimized.
SPEAKER_01That's awesome. Yeah, I was really excited to to see that. And uh, I do think that playing a role in government regulation, having that dialogue is important. So um, especially as the category gets more mainstream, it's good to have a custodian of that to make sure it's moving in the right direction.
SPEAKER_00Yeah.
SPEAKER_01So um I think just to the one, this has been awesome to go through all this with you. I always like to hit guests with a couple of rapid fire questions at the end. So one question I'll ask is uh, what is the maybe best advice that you got getting into this space or something that you picked up on from either, you know, a mentor or somebody senior in the space about um how to approach things?
SPEAKER_00The single uh one, I get one answer. Okay. Oh, the the low-hanging one? Yeah. It's not nearly as complicated as the vocabulary wants you to think it is. There's abbreviations, a reg C, a 506 C, an SEC. Yeah, yeah. I have no clue what all the stuff means. It's all good. It doesn't really matter. Yeah, yeah. Um, it's not as complicated as it seems. Yeah. Um, but you know, the good advice, right? It's the thing that's markedly different about this category and than any company I worked at before, you you're helping companies raise capital. And like in many cases, like the fate of their business depends on being able to do that. Yeah. Right. It's not, we're not selling you a CRM or you know, a health benefits technology. That's important. I'm not trying to minimize it in any way, but we're working with founders, they've got teams of people, they've got investors, often friends and family, they've got customers who rely on them. And this is such a high stakes thing for them. And that was such a learning for me coming into the space, seeing the intensity of the interactions with the customers. Yeah. It was initially jarring, and then it just kind of, you know, my buddy Aaron Shafton um was like, dude, it's really high-stakes stuff. Yeah. Like we have to be on point.
SPEAKER_02Yeah.
SPEAKER_00Um, then that was something that I kind of didn't appreciate till I came in. So the advice was just remember how important this is for the customers. It's it's not a software decision. It's not, you know, you're gonna change this to that or anything like that. It is, you know, a core piece of being able to realize their vision and build their business and keep their people employed. And it's really important.
SPEAKER_01Yeah, I do like that intensity of the the space and the energy that that brings. Um both like all of the and I've noticed that the people that we work with in this space are very on point because there's very little room for error. There's a whole regulatory piece to it. So you everything needs to be really tight. But I have also had those conversations with founders that have like looked me in the eye and been like, we need this to go well. Otherwise, you know, we gotta massively change or pivot the company. So there is a lot of pressure to make these raises uh successful. So definitely have felt that on the the other side of things.
SPEAKER_00So I must say the customers that we work on together, they love you, man. Okay. They love you. That's great. Yeah, every single one is like Martin's the best.
SPEAKER_01That's awesome.
SPEAKER_00Uh really good feedback. And my team loves collaborating on deals with you for that exact reason.
SPEAKER_01Actually, also just to throw, you know, uh some compliments your way as well, your team is actually awesome. I've have so many of them on Slack and they've they're great to work with. And uh it's actually also great to see that the clients coming in, they're already like such big fans of Deal Maker, the you know, the ones that I talk to, which is awesome. So you guys are doing a lot of good things, right?