How to raise capital for a startup with 506(c) Exemption & More with Noble A.Drakol




Hi everyone! Welcome back to FC Media!

Who is Noble? Noble is a cloud funding, capital raising consultant for startups and companies. Noble A. DraKoln has been involved in multiple tech startups as a consultant, investor and director. In the early days of the conversion from paging to full digital cellular networks, from TDMA to CDMA, he successfully ran a venture that made mergers and acquisitions in the 900mHz, 150mHz, and 450mHz spectrum’s. At the introduction of DVDs he successfully ran and sold off a VHS to DVD conversion studio, and he has been a part of guiding, consulting, and assisting in financing internet startups in both Web 1.0 and Web 2.0 phases. Mr. Drakoln started out as a futures/commodities broker at the age of nineteen trading the E-mini S&P, gold futures contracts, and treasury bond strips. Since that time he has authored the Wiley & Sons published best-selling books Winning the Trading Game and Trade Like a Pro. Over the span of his twenty year career he has traded S&P 500 contracts, various options, and futures for himself and clients. His books have been translated into multiple languages, he has been a keynote speaker around the world, contributing writer to Forbes, Futures Magazine, along with dozens of other financial magazines, and a radio and T.V. financial commentator on Bloomberg and Fox Business News.


Noble's consulting service can be found here: https://catalystgrowthadvisors.com/catalyst-growth-advisors/contact-form/


Today we asked Noble the following questions:

1. What is your background?

2. What is 506(c) Exemption?

3. How should Japanese startups raise money when they first launch a business in America?

4. How should Japanese companies choose a Crowdfunding and Capital Raising Consultant like yourself? - what should a successful consultant look like?


🚀 Check Out ForeignConnect Podcast ( Podcast talks about digital transformation, How to start a business abroad & How to Sell abroad) 🖊️ (https://www.foreignconnect.org/podcasts)


----TRANSCRIPT----

hi everyone welcome back to ask foreign connect podcast today we have a special guest uh novel we will ask him questions about raising money for startups so noble welcome to foreign connect podcast how are you doing today i'm doing great thank you so much for having me yeah thank you very much for coming on to the show so let's i'm gonna uh i want to jump on to the question uh now the first question i have for you is can you tell me what you do right now and also uh you have very impressive career like background can you tell me what you have been doing as well yeah i mean um what i what i do now is by kind of a few things number one we i work with startup founders and even companies that are currently in the pre-seed seed and series a round and we help them find investors to


probably get their company just to the next level their mvp or their final product or to help them expand and so we typically help companies raise uh or find investors to raise anywhere from one to five million dollars but i also have another role and that's as a advisor for an accelerator incubator called m accelerator.la and we've just started a venture fund with that group in which any of the people who join our cohorts and we've actually had some people who've joined from japan in the past oh wow yeah they actually flew out and attended our facilities here in los angeles because our program is about a three-month program and so people who've gone through our program and joined one of our cohorts uh we've created a venture fund a 15 million dollar venture fund with the goal to provide pre-seed and seed capital to 100 companies a year ranging anywhere from 50 to 100 000 uh for them to basically help them launch and give them seed capital to continue to grow uh from our venture fund um so yeah that's kind of where we're at so i'm you know for the last 28 years i've always been around raising capital um i see i see so actually i have a following up question for your accessory program that you guys are doing do you do you have any specific industry you guys work with we tend to be fairly industry agnostic but there's areas that we do get a lot of people because the founder of the accelerator alessandro mariantoni is originally from italy he has an extensive network of italian participants who come in and are a part of the accelerator and incubator who are either in essential services and food one of our most successful groups is called basil street they've created a contactless touch pizza that people can go in and get a hot brand new pizza from a machine they just raised 10 million dollars and they raised an additional 5 million recently and they're looking to grow and they start their pilot program where they're installing these contactless pizza machines across the country but we've also had people within clothing and um myself my background uh when it comes to tech is in augmented reality and mobile gaming and so we deal with a lot of people in the extended reality or immersive technology space as well as mobile gaming i still am the ceo of my my gaming company to this day oh wow i see what is it called the gaming company our gaming company is called where play games w-a-r-e play p-l-a-y games and uh we've yeah we focus on mobile apps and and branding and augmented reality and the conversion of ar with physical items such as clothing and locations to do uh immersive experiences um i see i see when you guys select startups to invest like what is the process like well for for the accelerator it's usually people have gone through one of our cohorts and so when we're selecting someone we've spent you know several months with them you know we've seen them do iterative design we've seen them uh come up with a value proposition and we've seen them come up with marketing and promotion to pull in uh clients or customers so you know it's a it's anywhere from a two to three month process so our alumni is very extensive many of whom either uh have their own startups or work at any one of the major corporations so for us you know by us getting to know them them being a part uh of our accelerator then we we feel good or we feel confident just from our experience working with them because you know listen most startups are not the same after they start they change the the the premise changes the thesis changes and the ability for them to gain you know to gain customers changes but the people are the same and if you're able to find good teams and you've trained them and you've had a relationship with them then that's great and so that's what we look for people who can weather the storm and and based on their personalities we make a lot of the investments in addition to the ideas that they bring to the table i see interesting so my next question is so today um you know as you probably know our podcast basically is a podcast to educate people around like do starting a business right so anything that relates to starting a business so in today's episode i wanted to feature a topic about financing like financing a startup that being said my next question is what is 506c exemption which i saw which i saw you wrote it in your website so i wanted to know what it is so in the us there's a lot of ways to raise capital and some people will go to friends or acquaintances and they'll use what's called the safe contract made really popular by the y combinator it's called a secure agreement for future equity and then some people use convertible notes and bonds but there's a way that you can raise almost an unlimited amount of capital by just registering with the security exchange commissions and they're the ones who kind of manage all of the uh stock to stock investments and people usually think of the sec or the security exchange commission just for publicly traded companies like the new york stock exchange or something like that but they also manage private companies in putting together these exemptions and so the 506 c exemption is very very specific and it grew out of something called the jobs act in 2012 in the u.s in which the government was trying to find a way for private investors to gain more access to private companies before they did go big and become super popular and the 506 c happens to be one of those exemptions it lets you raise an unlimited amount of money from an unlimited number of what's called accredited investors there's a specific definition for them but it also allowed you to advertise a market almost as if you're a public company so you can put ads out you can put it on your website that you're selling your shares the only thing is you could only let accredited investors in but up until then there is no way for you to advertise or market your 506 your your exemption your stocks that you want to sell you had to only talk to friends or family or know somebody or be acquainted the 506 c gave give everyone the plan same playing field to go find investors together is it higher risk though then the there's when they say no it's not a rate no it's not high risk for investors because what you're doing is you're targeting people who and that's why the government said very clearly it has to be accredited investors people who have a million dollars in assets or make at least 200 000 to 300 000 per year depending if they're single or married over a two to three year span so for those people the government assumed that it wasn't that risky to invest 25 or 50 000 because they were more sophisticated i see okay so the next question i had for you is uh once again raising money about raising money specifically for japanese startups because our a lot of our listeners are from japan and so we don't know how to raise money when we uh launch business in america right so what um how should we do it how should we try to start raising money in america what what is the most effective way to do like should we register to access data or should we look for consultant like what what do you advise for japanese startups so it you know it's different for you know each person yeah because so some people you know if you can't afford to make the investment in doing the 506 exemption or bring on a consultant like we are then absolutely figure out a way to join an accelerator it's probably a little bit less expensive and and you'll get access to potential investors but the way what i really believe and i'm going to always be a big fan of this of this exemption as a consultant i work with companies from around the world i work with people in india i've worked with people in australia i've clients in different parts of europe as well as canada and so what we often do and what we is we actually help them establish a u.s corporation yeah and then that u.s corporation they hire us to help them file the 506 c and we then register that corporation and then the company itself raises the funds and based on their us corporation and that's a real big benefit because now they have access to the u.s market if they have goods and products as well as uh being able to bring capital back to their company in their own country where they're developing and creating it and so they get the best of both worlds their u.s company functioning as well as their domestic company functioning so i believe that you know it's not as difficult as many people think it is you know we have flat rates on what we charge so we don't take a percentage of people's money that they raise you know we charge a flat rate to set up the 506 c we charge a flat rate to help introduce them to investors and then we give them the ability to do whatever they need to do to raise the capital uh that they want and people hire us on a subscription basis they hire us for one month they hire us for a quarter or the highest for six six months so the reality is we really uh you know at your corn capital partners we really help uh startups from around the world find access to u.s capital is to be honest it's not just startups sometimes you're an ongoing business and you need capital to grow and expand you know we have one group that we work with out of australia uh great company they have it's called aussie souls they have a great uh uh like sandal that they produce which is you know orthopedic doctors love they already were doing a couple million dollars a year in australia but they wanted to break into the u.s market so we helped set up their u.s company we introduced them to investors and they're growing they're growing now so it could be companies that are already making some money where they're based out of but they just want to expand and they want to show so i think oftentimes people confuse what startup means it's not someone necessarily starting from scratch it typically just means a company that hasn't done any outside investment so far or they've done seed investment and haven't gone to series a mm-hmm it could be any company and they can actually be producing capital and those are a lot of companies that hire us as consultants so i said there's there's two groups right there's a group that they're starting from scratch complete startup have no capital i'd say there's opportunities to go accelerate or incubator out if you're a company that's a startup that you're looking for but you're generating revenue and looking for uh you know outside investors then we're the kind of company that you hire because we can accelerate your introductions we can accelerate your registration and get you set up with your exemption very quickly um i see so that bring me my final question for you is that so when japanese companies whether that's a startup or corporation want to hire consultant like yours like you someone who can help with the crown founding or capitalizing like what are the sort of like criteria should should we look for in these people yeah i mean so there's there's a couple of a um criteria that i always like to look off look at right off the back the first thing is length of time in the industry can i really you know who's the person consulting me can i see that they number one have have relationships they have a career that they've actually spent time to help companies those companies are easy to find and that's why i love linkedin you know linkedin you can go look and you can see someone's resume you can see their experience and it's right there another thing to pay attention to if you're going to hire any kind of consultant is their access to uh where you want to find investors you know we have a strong relationship in a network in silicon valley even you know our tech company our attorney is perkins and cui which is one of the top attorney firms in the valley that helps companies uh and then we also have other relationships we have family offices that we work with and large angel investors and so knowing what the network that they have and giving you access is important you know we have our own in-house database of over 900 000 accredited investors across the united states uh you know there's 22 million accredited investors but having 900 000 we've got a good amount that we can reach out to on someone's behalf so just knowing uh how they build and and work their infrastructure is important and and more importantly do they really seem like they care about your project you know again we're all investing we want people who who we're working with to believe in what we're doing not just bringing us on as another client because then they're not going to work that hard for us right so you know it's really it's really key it is important to be able to connect and work with people who like us and so follow your instincts you know if you don't uh i feel good about the people don't work with them you know it'll save you headache later on right and for us we get most we get like something like 70 percent of our business through referrals either from former clients or business attorneys or cpas accountants you know smart people like yourself don't see me so it's you know people refer us business all the time because it's difficult to find capital for your business and people uh rely and and trust our process right um i see so as a company um well we're in this case we're talking about japanese company companies who don't necessarily have any um knowledge around mark u.s market right like they're new to the market like is it important for those companies japanese companies to kind of already know what kind of investor they wanna contact to when they first contact consultants like you yes and no right i mean if you if you have a good product and you have a good industry you know our consultancy is unique because we have such a big database that we almost have potential investors for for so many different verticals uh so from tech to uh gold mining to uh you know clothing and it does so our database is so so so robust that uh it's it's more so knowing exactly how much you want to raise and then your command you know your command of being able to sell or position your vision in front of investors because we don't sell the deals for you we get you in front of them but the founders still have to know how to promote market and introduce their company to potential investors and that's really where the consultancy is important because you know we help people frame their conversation in front of investors and that's big right is is that something you you can also help with for those companies like you know making sales pitch uh yeah we do that all the time we we help refine their uh pitch deck their presentation pitch deck we help them uh communicate their presentations so yeah we help them refine all of that you know we do we usually when someone comes in and says hey i want to do a 506c we charge a flat rate but then we give them an extra 20 hours worth of consulting time yes make them better at being able to pitch and talk to investors um i see i see okay and then i guess sorry i even though i said that was my final question


you got me curious so like is there like some sort of like number you guys use when you indicate your success date of like okay like we reached this many uh investors at this point like is this success or is this like failure does it make sense yeah no i think i think i have an idea of what you're asking okay and correct me if i'm wrong and mind you ask as many questions as you want doesn't bother me i'm happy you know this is our time this is our time to talk about it so um our company has a very specific metric our goal every day is on average to get between two to four uh accredited investors in front of the ceos or the founders of the company that's looking to raise capital so our metric is very very specific um on average at the end of the month founders talk to anywhere from 40 to almost 100 potential investors in their project so i for us that's a huge success up until now most founders rarely talk to that many potential investors right right they just they just literally are kind of going here and there or doing pitches and in in rooms with a bunch of people but rarely the one on one so for us that is a successful metric we still want you to raise the capital and the conversion metric is really the biggest one right if you get in front of 40 people to 80 people you have to be able to convince at least four of them to invest in you and that's what we end up spending a lot of time coaching particularly founders who are now familiar with raising capital on how to achieve that success right like what is it like at this point right like after you meeting that many accredited investors like if it happens that the founder couldn't sell their business idea to any of them or let's say that like on average the founder tend to get like four interested investors but if it happens that a startup couldn't sell their idea to like any any of the four right like let's say that this founder got only like zero out of 40. like where how do you fix that like do you at that point do you kind of see it as a situation that the idea is bad do you kind of see it as like you know the way founder is pitching is bad or the business model is bad like how how are you where's the problem right like where's the mistake right right and the the and the reality is it could be all of the above you could be one of the above and so what i always try and explain to founders is that every potential investor that says no you should really look at it as a no right now and keep the door open or continued communication and the smart thing to do with those those potential investors all of them not just the four that were interested but your entire database that you've accumulated with us is you do a drip campaign every week or every couple weeks make sure that they're getting an email from you they're getting information from you that they are seeing your progress seeing your success and you're updating them the biggest mistake that i think most people make when they hire a consultancy like ours is that they assume that if they don't get the money the first time they talk to the person right away then their job is done and the lead is not good that's not how to treat these kind of leads right people spend a lot of money with us to get and cultivate this get this database so if you're spending the money to get the database you should actually be spending the time too to make the database your own and that requires you emailing them sending them information sending out articles letting them know what's going on with your company and then constantly getting in touch with them to let them know hey we're still looking for investors and i think that's where the big mistake is just because the founder wasn't you know didn't present the pitch right the first time or the person didn't like it the first time it really doesn't mean no forever you just know right now and it's the same thing with the project the project just may not match what the founders look investors are looking to do right now but all of a sudden something in the news comes up and your project is good again because everyone wants to be a part of it and they know you and so of course you've been talking to them they trust you and then sometimes investors a lot of wealthy investors are tied up in other investments they're tied up in other companies or they're tied up in uh stocks or they're tied up in tax scenarios and so many of them just don't have the liquid capital right now but if you stay constantly reaching out to them when their situation changes you become a priority because you've still stayed in their attention right and so that's i think persistence is really the biggest key to making that database work because no matter what happens the above come on not sunni we know all the time bad ideas get money right bad ideas are successful right and so you know it's it's it's like it's easy to say hey you know i'm the terrible one my idea is bad all these negative things but the flip side of it is they just met you you know you just got acquainted with them it's like going on you know meeting someone at a coffee house and then immediately saying hey let's go to dinner maybe you know you don't go to dinner right away maybe you guys go meet at the park first and you just kind of take these little steps right the time you go to dinner so that's all i mean it's the same thing you're courting in and interacting with investors just if you're going on a date with someone um i see that's very good analogy right there okay no well um i think i got all my questions here uh well actually i i asked all my questions now so i sincerely want to thank you for your time today that you spent with us and before i let you go let's let's uh let's tell everyone where people can find you yeah you can find uh it's easy to find me and if they see my name noble dracone then it's easy to find me on linkedin if you want to use my last name it's easy to find me on twitter i'm always open for people to reach out to us our website is my last name draconecapitalpartners.com if you want to check out our games just look up weird play games the the website where playgames.com or you can go to any of the app stores google or apple and find our games and us you know support us there but uh other than that you know i love being on the show happy to come on anytime you need me thank you thank you so much thank you have a good day nuts yeah you too thank you


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