Inside The Kore #4

The 4th issue of our "Inside The Kore", a weekly digest made exclusively for LinkedIN, is out!

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Crowdfunding Platforms Pose a Significant Opportunity for Global Investors

Across the world, there are an estimated 4.7 billion people with the means to invest in the private capital market. While this may be a rough estimate, it provides a good starting point for understanding the reach of potential investors worldwide. And, thanks to the rise of online crowdfunding platforms, it is easier than ever for these potential investors to make their investments. Through these platforms, both retail and accredited investors can invest small sums of money in startups looking to raise capital through the JOBS Act exemptions.?

This can be risky, but it can also be very rewarding if the startup is successful. The general principle of investment risk is to never invest more than you can afford to lose. But, with smaller individual investors, people who can only afford to lose a little are no longer excluded from these opportunities. However, any reputable equity crowdfunding platform has strict compliance standards that ensure that the companies being funded are legitimate and compliant with all securities laws, thus, reducing some risks to the investors. When both funding portals and issuers adhere to all compliance requirements, the risks of losing money to fraud or incompetence. Still, investors must keep in mind that regulations are unable to protect them from changes in the market.

The Landscape of Funding Platforms

In the United States, there are over 70 FINRA-regulated crowdfunding platforms that companies can choose to utilize for their offerings. Being a FINRA-registered platform ensures that funding portals are following FINRA regulatory oversight and reporting requirements, introducing a layer of protection for investors against fraud. Before choosing to invest, potential investors should?check with FINRA to ensure the funding portal is regulated.?

Equity crowdfunding is a relatively new phenomenon, but it has already impacted the startup ecosystem and companies have already raised more than?$1 billion using RegCF alone?since the JOBS Act was enacted in 2012. By allowing companies to raise capital without an IPO while allowing investors to leverage the power of the Internet to capitalize on up-and-coming companies, everybody wins.

In 2021 alone, equity crowdfunding?raised over $500 million?for companies. This means that businesses have a wide range of short- and long-term investment sources to choose from seeking capital to grow and support their business objectives. With equity crowdfunding, various industries can benefit from improved access to capital, while investors can prosper from getting in with a company on the ground floor.

KoreClient Spotlight: Notarized.com

Notarized.com is a company that provides on-demand traveling notary services nationwide to businesses and individuals, as well as offering remote online notarization services in a convenient and secure way to sign documents online. Their system is encrypted with the highest level of security, and all documents are certified and legally enforceable. Recently we spoke with?Notarized.com?CEO Omar Kubba about the company and what they hope to accomplish with their RegCF offering.

With a passionate team, Notarized.com wants to change how people view closings. Streamlining the notary order process, Notarized.com makes it easy for busy people to find a notary, schedule an appointment and get the job done quickly. Notarized.com also offers a cloud-based notary solution that is convenient and easy to use for scheduling a remote online notarization. This process protects your confidential information and electronic signature with encryption and offers a legally binding document. Customers can sign documents electronically from anywhere in the world at any time, or they can schedule a traveling notary on demand to come to them, documents in hand.?

A remote online notarization solution allows the entire document signing process to be seamlessly conducted in the cloud, eliminating paper, hassles, and wasted time while saving money. This is an excellent solution for title companies, independent escrows, real estate professionals, lenders, and attorneys.

Omar Kubba founded Notarized.com in December 2016. As a second-generation title professional with over 20 years of sales experience in the title insurance industry, Omar is a multiple award-winning sales executive ranked in the top 1% of title professionals in the nation. “My firsthand experience in the industry highlighted inefficiencies that could be solved with a signing solution. I started the company to create a better process,” said Kubba. Notarized.com has been entirely self-funded since its inception in 2016. Notarized.com only began the journey of capital raising because they have an extensive plan to expand the company to serve their clients better. “Because of what we were trying to offer, we decided to raise capital to bring that dream to fruition,” said Omar.

In the future, Notarized.com aims to expand its product and service offerings to clients, increasing the number of verticals it operates under. In their roadmap is a complete overhaul of the online notarization experience to include a sophisticated, innovative, and revolutionary remote, online notarization platform, and mobile app, a secure e-signature solution, nationwide deed preparation software engine, a Notarized.com certified training program for notaries, and a contract lifecycle management (CLM) platform that empowers users to manage every stage of business contracts, among other additions to its suite of capabilities.?

To help achieve these goals and facilitate the capital raising process, Notarized.com has contracted 21st Century Capital to guide them through the process of capital growth. With 20+ years of capital experience, 21st Century Capital has a track record of delivering results to the companies they work with.?

Notarized.com has chosen to raise the capital for its expansion via the crowdfunding provisions of the JOBS Act and is using the KoreConX All-In-One Platform. “Notarized.com has an opportunity to present itself to a huge group of worldwide investors and let these people get in on the ground floor. While I still raise capital the traditional way, [RegCF] has changed my way of thinking about raising capital,” said David Bernard, Notarized.com advisor.

Regulation CF Disclaimer

This communication may be deemed to be a solicitation of interest under Regulation CF under the Securities Act of 1933, in which case the following applies:

• No money or other consideration is being solicited, and if sent in response, will not be accepted;
• No offer to buy the securities can be accepted, and no part of the purchase price can be received until the offering statement is qualified, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date;
• A person’s indication of interest involves no obligation or commitment of any kind; and
• An offering statement, which would include a preliminary offering circular, has not yet been filed with the SEC.

What Kind of Data is Relevant for Private Equity?

The world of private equity is shrouded in a certain amount of mystery. What data do private equity firms use when making their investment decisions? What kind of research is needed to identify opportunities in this market? With the private equity markets?raising over $665 billion in 2021, up from $521 billion in 2020, the use of data for private firms is becoming more crucial than ever. This blog post will look at the?data types most relevant for private equity investors and how this information can benefit them?in certain situations.

The Role of Data in Private Equity

Private equity is a type of investment generally reserved for high-net-worth individuals, venture capitalists, and institutional investors. However, these opportunities are being afforded to more individual investors thanks to the JOBS Act. It is an investment strategy that involves buying stakes in companies that are not publicly traded on stock markets. Private equity firms, in particular, typically have a longer time horizon for their investments than other types of investors and often are willing to invest in companies with high growth potential.

For these investments, investors may rely heavily on multiple data sources to provide insight and justify investment decisions. These sources may include:

• Financial data?is relevant to PE firms because of the need to monitor a company’s financial health. This data can help PE firms identify potential risks and flag companies that may be in trouble. Financial data can also help firms assess a company’s growth potential, allowing them to make more informed investment decisions.?
• Operational data?is relevant to PE firms because it helps them understand a company’s business model and evaluate its efficiency. This data can help firms identify opportunities for cost savings and process improvements.?
• Market data?lets PE firms know what’s happening in specific industries and understand where there might be opportunities for companies they own to gain or lose market share. It also helps firms keep tabs on broader industry trends that could present opportunities or threats to their portfolio companies.
• Alternative data?allows firms to track a company’s performance in real-time and make more informed investment decisions.

Data is an essential part of the private equity investment process, which firms must consider when making investment decisions. Private equity firms often rely on proprietary data sources, such as data from the companies they own or have invested in, to make investment decisions. They also use external data sources, such as public market data, to corroborate what they see from their data sources.?

The Importance of Data

With the increasing importance of various types of data, private equity firms must be able to access and analyze this data to stay ahead of the competition. Firms that can effectively use data will be well-positioned to make informed investment decisions, improve their portfolio companies’ performance, and generate better returns for their investors.

Beyond traditional data sources, alternative data is becoming increasingly important for private equity firms. This data can come from various sources and helps PE firms better understand the companies they invest in, make better investment decisions, and provide more hands-on operational support to their portfolio companies.?Alternative data can help PE firms?corroborate what they are being told and get a complete picture of the company they are interested in investing in. Alternative data can also help with operational decisions after an investment has been made. The ability to crunch a company’s proprietary data and glean insights into broader industry trends is crucial to helping a private equity company increase its market share, improve operational efficiency, and ultimately time the exit correctly. Therefore, a practical application of alternative data can create a virtuous cycle for private equity firms: better investment strategy, selection, execution, management, and realization, driving improved returns and increased LP demand.?

Any one source of data may not provide the entire picture of a potential investment, making it critical for private equity investors to analyze a wealth of data before making an investment decision. Overall, data can help to illustrate patterns and opportunities within the private equity space.

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