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All right, so you recently just closed around. I believe you raised ten million dollars as a reg CE equity crowdfunding correct.
Yeah reg CF Yeah, ten million in three rounds, So all right, and you're the first black person, black man to do that. Yes, history has been made. Kudos to that, congratulated, gratulations.
So can you explain to the audience what exactly does reg CF equity crowdfunding. There's a lot of different words here, What exactly does that mean? And why is it significant what you have been able to do?
Well?
I think it's very important because African American people and minorities have a really tough time raising capital for their businesses, going to banks to get loans, We're going to venture
capital to raise capital. And so in twenty twelve, Barack Obama and Joe Biden kind of launched this regulation called the Jobs Act and then went into it went into law in twenty fifteen, which means any person can raise capital from the general public for their business, regardless of their net worth or annual income up to one million dollars. That was the first rule. So we did that and twenty twenty. So think about how important that is for
people that aren't accredited investors to invest. But then someone like me that had a startup that wanted to raise capital but VC was not necessarily rout at the time, or me going to get a bank loan to raise an excess of a million dollars. So that's why that's important for any business that you want to start, primarily, you know what I'm saying, like small businesses, which fan base was at the time, to be able to raise capital and significant.
For those who want to break into the tech space. What advice and insights would you give those who may feel like it's not for us. And if you can do your journey all over again, what steps would you wish you would have taken to get here faster?
Ooh, everything for us? Everything. There's nothing that you know, we can't do as a people. So every single solitary thing that exists on the planet. You know, we can go to space, we can build tech, we can you know, invent cures for diseases, all kinds of stuff. So I don't think there's anything we can't do. I would say, study, you know, learn the landscape. I had to study the
landscape of social media. I was kind of like a person that used social media a long time before, but just studying the landscape of how social media works, it was interesting to be able to like jump right in. I honestly would not change anything, And I know that
sounds crazy. I feel like my inexperience in the space gave me an opportunity to go down my own path and not try to follow what other people have done, which probably would have wound up dead ends or maybe had me discouraged in what I was trying to do. So I love everything about what we've been able to do, So I think it's extremely important. I think it's extremely awesome and what we've been able to accomplish.
So talking about being naive to the space, A lot of times when you're naive, you're extremely creative. And that's something that fan base has stood on being creative in a space because obviously we don't have the same capital. And when I say way, i'm talking about the company don't have the same capital as some of the big
players inside the space. But what happens when you see your creativity being taken by a company or being implemented by a larger company with more capital, how do you guys combat that?
How do you deal with it? You know it's a strategy, Well I don't. I have a belief that there's enough room for everybody. Doesn't mean that fan base will well just be you know, extinguished out of the market. But I also think that every social media platform has a lifespan. It will live, it will die, and so I look at Facebook as a legacy platform. I look at Instagram
and TikTok and x now as middle aged platforms. So there's always going to be another social media platform because young people are always going to want to be involved in platforms that their parents are not on. They want to have their own communities, their own spaces, And so I look at fan base as more as a success or a future platform, as opposed to a platform that's just ready to be the number one platform in the world right now, but over the next five, six, seven years,
I think that'll be you know the case. I'm not really worried because what I noticed it tells me a lot. It tells me that I always look at black culture
and technology as kind of this relationship. It's like technology tech companies put a bunch of legos on the table, right, and then we come along and make the coolest shapes of the coolest objects out of the legos that are presented, and then these companies take those ideas and then implement them into their business and then boom, you've got this whole you know, entire you know, new technology that's been invented or pioneered by us. So I think we'll always
innovate the space. I'm not worried about that. I'm used to that. It's amazing as the plan go ahead.
Re stort, Well, I was going to ask you about equity crowdfunding. I think that it's important people just to have some level of understanding. So it's a way for people to actually invest in a company. It's beneficial for the companies because they can you know, get around the VC world and they can raise you know, substantial amounts of money. But from an educational standpoint, how do investors
actually get paid on this? Because I know it can be difficult to receive you know, it's five hundred dollars. It could be like, you know, ten thousand people that contribute, right, So I think education is extremely important because when people aren't fully educated and they don't see a return or they don't know how to you know, get the money back, well, then it turns into a scam. So that that's important to fully educate people on the process of investing, what the expectations are, how it.
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An illegal alien from Guatemala charged with raping a child in Massachusetts. An MS thirteen gang member from El Salvador accused of murdering a Texas man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President Donald J. Trump's leadership. I'm Christy Noman, the United States
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Do what's right. Leave now. Under President Trump America's laws, border and families will.
Be protected sponsored by the United States Department of Homeland Security.
Works when they can get paid out. If they do get paid out, the percentage like, can you just walk us through that? Because, like I said, I think that it's fully important. It's very important to educate people on that because if not educated, then you know, other narratives ought to be created.
Yeah, so, I mean, you guys cover both areas on this show. But it's typically like pre ipo investing in post ipo investing, So post IPOs when the companies on the stock market, you can go buy shares NASDA, you know what I'm saying, and invest in companies and do stuff like that. Pre IPO investing is really a very rarefied air that's really not available to most people because
of this rule called the accredited investor rule. And this rule has been in effect since nineteen thirty three, which means you have to have a networth of a million dollars minus your house or make two hundred thousand dollars a year for two consecutive years to even qualify to invest in an early stage company. So when you think about the Microsoft's, the Apples, the Ubers, the Ibms of the world, they were all invested in by already rich people.
So it was rich people saying, hey, look, let's make a rule so that we get the earliest access to the best opportunities of investment. And then tell the general public, we're protecting you by not risking your capital to invest in these companies because you're an unsophisticated investor. We don't want you to squander your life savings or your mortgage or whatever it is you know to invest in these companies.
But I always say, no one has a problem with us going to take our money and gamble five thousand dollars ten thousand dollars on in Vegas, or go buy lottery tickets five thousand dollars five hundred dollars worth of lottery tickets. And so when you pre IPO invest in the C stage companies such as Fan base. I always say this, you are with us to the moon or the ground, so you get along. You are along for the ride, which every investor is, and there's not a
company out here. There are people that have invested in startups that have gone unicorn and have gone bust. They still take that same risk. The difference with equity crowdfunding is that people are able to invest in small amounts. Two hundred and fifty dollars five hundred dollars and I'm not saying that's not a lot of money, but sometimes there are minimums to invest in these other companies, these these pre IPO companies, fifty thou twenty five thousand, ten
thousand dollars. That's a lot, five thousand dollars, that's a lot. But to be able to say I can take two hundred and fifty bucks, which is something that I would spend on food or some shoes or some drinks at the club and invest in an early stage company's kind of a really big deal. And I think being able to take advantage of this regulation is something that is
game changing for people. So I understand that people are always concerned about scams, but that's why I think there's limited it's called limited risk.
If limited risk is you're.
Investing two hundred fifty dollars, five hundred dollars, one thousand dollars, there's risk involved, but it's not you risking one hundred thousand, two hundred thousand, half a million dollars. And sometimes you know people invest that in those those prec routes as well.
Yeah, that's a follow up to that.
So when we go into raising, how do what determines the allocation that's going to be the amount raised? Right, because we'll see companies or will hear it, they're trying to raise two million, they're trying to raise five, ten, fifteen. What are the factors that you determined to say, like this is the amount that we need to raise? Is it marketing? Like what are the things that go into account when you're trying to raise a specific amount?
Well, for me, I put into perspective of equity versus valuation. So if I would say, okay, I'm going to raise my very first round I raised, I was going to raise a million dollars at a twenty million dollar valuation, right, So that's that's like two and a half percent of the company or five percent, sorry, five percent of the company, So it's not really a lot of equity to give away for one million dollars. You know, to get five percent of the company away at a twenty million dollar valuation.
So what you're typically looking to do for me is raised funds needed to run the business. But also be mindful of the equity that you're giving up in your business, because a lot of times when you think about angel investing or VC investing, especially when you don't have capital.
And I'll say this too, also, I bootstrapped fan base in the beginning, so a lot of times tech startups need that early early capital, that one hundred thousand, one hundred and fifty thousand, ty thousand dollars to get started. I spent two hundred thousand dollars of my own money, so then I avoided giving up equity there, right, And a lot of times that's where you get hit the hardest.
Those that first one hundred and fifty two hundred thousand dollars might cost you ten to fifteen percent of your company, depending on which angel investor, which route you take. So I avoided giving away equity there. Then when it got to the point where I needed to raise capital, I saw the landscape and said, Okay, this looks like the music business. To me, this looks like the vcs are the record companies artists, and the Billboard charts and the
app store charts are very similar. So for me, I'm trying to stay independent as long as I can to
put myself in a position to have leverage. So when I'm valuing my company, I'm still going by the same metrics that other companies have raised and set their valuation that but I'm being mindful of not taking too much capital, right because I don't want to say, Okay, fan base right now is probably at this current round we just did was value to eighty five million dollars, right, So if I said, Okay, I'm going to raise thirty million out of eighty five million out evaluation, that's like thirty
three percent of the company. I don't need that. I don't need. I don't need that, you know, I don't need that kind of stuff. So for me, I say, let's keep the valuation low but enough to continue to scale the company. Now we're getting into escape velocity zone with fan base, where we need to raise large amounts of capital to spend that capital faster to build our team to build faster, better products, faster and move quicker. So I think we've proven ourselves in this RecF space.
I think I'm done with the RECCF space. I think I've mastered it and I'm pretty well versed in it. But now we're moving into where we raise escape velocity capital, and that's extremely important.
An illegal alien from Guatemala charged with raping a child in Massachusetts. An MS thirteen gang member from El Salvador accused of murdering a Texas man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President Donald J. Trump's leadership. I'm Christy nom the United States
Secretary of Homeland Security. Under President Trump, attempted illegal border crossings are at the lowest levels ever recorded, and over one hundred thousand illegal aliens have been arrested. If you are here illegally, your next you will be fine nearly one thousand dollars a day, imprisoned and deported, you will never return. But if you register using our CBP home app and leave now, you could be allowed to return legally.
Do what's right leave now. Under President Trump, America's laws, border and families will be protected.
Sponsored by the United States Department of Homeland Security,