E110: Founder Of Raises.Com, Natu Myers, Discusses Raising Investment Money - How2Exit

[00:00:00] Ron Skelton: Hello and welcome to the How2Exit Podcast. Today I'm here with Natu Myers. He is the founder of raises.com. And, we're gonna have a great time today talking about raising money and, venture capitalists and all this stuff, raising money for real estate, raising money for businesses, everything in that realm. Thank you for being on the show today. 

[00:00:18] Natu Myers: Hey, thank you for the opportunity. 

[00:00:20] Ron Skelton: Awesome. So let's just start off where we always start off. Give us your origin story. How did you get started in this space and, what had you create, such a thing as raises.com? 

[00:00:32] Natu Myers: Yeah, no, sure. So then, my origin story. It all started on a planet called Krypton. So all it is in a nutshell is, my background was more in, I guess my education and background was more in software development and coding and program. After working with, it was like a health tech company and learning how to code and things like that. This was before, Bitcoin and cryptocurrency got famous and everybody knew about it. So,[00:01:00] I learned about what, like what the things were, what Ethereum was and all this stuff before people were even talking about, in the early days. So what happened is, there are a lot of investors that wanted to learn what it is, and then I found that the bigger problem was more to companies that wanted to raise money rather than the cryptocurrencies needing to, or rather the investors needed to deploy money into cryptocurrency. 

[00:01:21] That seemed to be a bigger problem. So what I did, worked with a lot of mentors, coaches, people that were ahead of me, and then I just learned that, what I needed to do was just focus on getting the companies to raise money and then showing them how to do it compliantly, because at the time there weren't any registered, and we can go into this for the audience, things called registered broker dealers that could allow companies to raise money. So I worked with one of the two companies in Canada that was legally allowed to raise money on behalf of companies. We did it for cryptocurrency, but we did it for all types of companies. And then I saw that the bigger, kind of the bigger niche, more mass market was more of just regular companies and regular either real [00:02:00] estate's, deals that needed to get funded.

[00:02:02] And, people that wanted to buy businesses was like a giants emerging market and trend. So what I do now is like I learned, from these mentors and then these, broker dealers, these investment bankers, and we're actually spinning up like our own group of companies. So we just raises.com for short. All we do in a nutshell is, assist people in, you know, structuring their real estates or business acquisition deals. And I'm assisting them in building them the systems to raise capital and getting their capital raising team underneath them. So that's what we do in a nutshell.

[00:02:33] Ron Skelton: Awesome. And, if you were sitting here in the United States, and I know you guys can operate here too, so there's a bunch of like SEC, like securities, licenses. I had somebody re try to recruit me to raise, in one of these companies that raises money for others. And he's like, do you have your series? And you start listing off like at least three like tests, right? I forgot it was six, I forgot what the numbers were, but they're all numbered. Do you guys have to go through that realm? Like do you [00:03:00] have to, or do you have people on your staff that actually have all the securities, licenses to do that here in the United States or?

[00:03:06] Natu Myers: Yeah, good question. So the way that we do it and what I learned from the previous broker dealer is, so at a time of the recording, probably when recording comes out, would have a different licensing situation. But basically we have, the consultancy where we're showing people how we're creating the entities for people and then showing them how to get people to raise capital for the deals themselves. Let's say you have like a real estate, you wanna buy a real estate apartment. What I'll do is, I just, help you do the draft paperwork with, get attorneys so that you finish all the paperwork and you're legally compliant.

[00:03:36] And I would just, help you find a salesperson that works for your company as a full-time contractor or employee. And then you're the issuer who's raising capital, so you're not in the business of connecting other people or investor or anything. You just have a full blown sales team that raises capital, for you. So then we structure it that way on the consultancy side. Right. But then on the licensee side, to answer your question, so then we're, at the time of the recording, we have this exempt market dealer application, which would allow us to [00:04:00] directly raise capital for somebody in exchange for a success fee.

[00:04:03] So that's really highly regulated, but then that's why we're just waiting for that registration to go through before we do that. And then once we have that, then all we do, we just partner with, future looking. We just partner with, other broker dealers in the United States via, there's something called a chaperone broker dealer arrangements. And then that can allow foreign broker dealers to, to have the oversights of American broker dealers to work within, the US. So that's it in a nutshell. 

[00:04:31] Ron Skelton: Okay. You guys have been doing this for how long now?

[00:04:34] Natu Myers: Yeah, so we launched, soft launch in 2020, since the pandemic. So around, two or three years now. 

[00:04:39] Ron Skelton: Cool. And then you guys, so it's both real estate. In the real estate world, we refer to 'em as syndications. Is it the same thing inside of the, inside of the business raising money for business funds or is there another name for it? 

[00:04:52] Natu Myers: Yeah, well, that's the same thing. We just accept people are looking to buy a business. All we do, we just say, Hey, just either it's a share purchase, where, I mean, [00:05:00] you're just offering the shares of the target company if it makes sense. Or there is a fund where people, we create a fund so that people can raise money to pay for the down payments of multiple businesses, via a fund. So those are the two ways we do it for businesses as well. 

[00:05:15] Ron Skelton: Okay. So I've interviewed a few guys that that's what they do. The cool thing was, my favorite one was, Ace Chapman. And the reason it was my favorite with him is he not, he did what he called micro funds, $5 million funds. He did microphones for the acquisition, but when he went to sell the company, he would walk them through that, pair him up with his people that helped him raise money and help them raise the fund to purchase an all cash purchase from him. So he's like if they didn't have, say they had a hundred thousand dollars for the down payment, but they didn't have the $5 million, or whatever to buy the whole thing, say, would you like me to help you, show you the steps to do that, pair you up with my syndication attorneys. Have them help you put a rent private placement memorandum and you raise the money and then you've got investors involved.

[00:05:58] They're not, not me. And he [00:06:00] would walk 'em through it. And that's a creative way to do it. I see on your website it says 10 million plus. Is that normally your sweet spot? Like you're looking for people that are raising 10 million and up? 

[00:06:10] Natu Myers: Yeah, I mean, it's a nice marketing kind of, we get the best, quote unquote, I guess, marketing leads if we say that. We get people that aren't working with deals that are so big that they have so much experience that they barely need our help. Nor do we work with people that are so small that they're just, that they don't even understand that they could, they're not even aware of the problem of needing to raise more money. So just because, not even more about the deals, more about the people we talk to, cuz we focus more on the people because the deals come from people. But yeah, the second thing, obviously the deal, cause like if there's a 10 million acquisition, we just like that nice kinda small range to play with minimum. Like one to 2 million cuz it shows that they're open to going beyond single family houses. And then that's where we mostly play. 

[00:06:50] Ron Skelton: Okay. And then on the, most of the people that send into this show are gonna be looking to buy, businesses, right? They're gonna raise money to buy a manufacturing [00:07:00] plant or a software company or that, somewhere in that realm. Some of the people are gonna buy, car washes and something that has real estate attached to it. But most of them are acquisition entrepreneurs more than real estate investors. So, focusing on that, what does somebody need to have kind of planned out before they reach out to a company like yours?

[00:07:23] Natu Myers: When they're looking to purchase a business, what they need to have planned out, we just like to overemphasize understanding where the money's coming. I guess I would just share like Jamara is really nice fellow and who hopped on and we're working with, a really nice fellow like working with him. So for him, He wants to buy HVAC businesses. And he's kind of like, okay, yeah, I don't have the business on contract. What do I do? So what we told him, we told him, Hey, let's just look at the, let's just do the draft documents. So remember you're other fellow with the PPM, drafts, let's just do the draft documents. Redact the specific name of the deal because we don't have the deal yet.

[00:07:55] So then when we have it and we get it. Work on finding a way to compliantly talk [00:08:00] to lenders for the debt portion of it. Compliantly talk to private equity firms to see what their criteria is, and then to find people who, number one, are accredit investors. Number two, who are would be interested in potentially investing if there was a deal. And so it's all kind of future looking and you're not seeing in terms of any deal just to be compliance or any and all that. And then you set up the website and everything so that you have like an email list of people who have opted in to see what you have going on, if and when you get a deal on a contract.

[00:08:25] So we just, long story short, get soft commitments and then go back later and so that we can get the thing under, uh, contract there with the people. 

[00:08:33] Ron Skelton: Do you guys do the direction and coaching on whether or not they, I'm gonna butcher this. It's 5 0 3, right? And there's a two different, am I get the right one there?

[00:08:41] Natu Myers: I'm picking up what you're putting down. So there's, yeah, the regulation D 5 0 6 C, which can allow people to talk to accredited investors. It raised limited amount of capital in the United States, and then there's a whole regulation D 5 0 6 B, which is almost the same thing except you're not allowed to market it, you're not allowed to talk about it on your internet, except with people who we had a prior relationship with.

[00:08:59] And [00:09:00] you can actually bring in up to 35 sophisticated, but not a credit investors. So yeah, we have like this little kind of, it's a cool kind of software thing where people put it in. We have assistance that like it automatically populates the PPM drafts and then we have assistance and myself and CFAs that, just fill in the gaps and so on.

[00:09:17] Ron Skelton: And then the, the B version, I think you can raise up to what, 5 million, there's a cap to how much money you can raise through those 35?

[00:09:24] Natu Myers: I don't understand that there was. Maybe somebody's going to, maybe someone's gonna throw a tomato at me out there. From what I understand it, it seems to be like the limit is really about the amount of unaccredited investors that can come in a deal. I don't remember there being like a big, fuss about the limit on the, on that. But, it's one Google away.

[00:09:40] Ron Skelton: Yeah. I was looking it up real quick while you're typing there. Now, I don't see it either. The D version, companies offered to de raise unlimited amount of money. And then b, subject to the requirements. No solicitation in general or advertising to market the securities. So pretty much if you're doing no solicitation or advertising, then you're going to [00:10:00] people you already know. Definitely. 

[00:10:02] Natu Myers: Exactly. And then we can go into the other ones. But then there are all kinds of other, all the letters of the alphabet. 

[00:10:07] Ron Skelton: So all the ones I've ever heard of was, B and D. So, what else, what other ways of raising money inside of this vehicle are there? 

[00:10:14] Natu Myers: Sure. And what's funny is that CAD actually mimics the United States and all of them, they call 'em different words. There's something called the regulation A, and then A plus. Or A tier one and tier two, but basically it allows people to market to unaccredited investors as well as accredited investors. And then the max you can raise via the A plus, so the A plus you can raise up to, I think, 75 million. And then the, I think the A without the plus, I think it's around 25 million.

[00:10:44] And so that's what Grants Cardone and allow of social media and influencers used. Because you can talk to 'em on credit, but then you have to pay a lot of money to make sure everything's audited, there's certain auditing requirements. And you have to have something called, what do you have to have? You have to have like a lot of literature that the unaccredited investors agreed to. [00:11:00] So you have to have that. In Canada, our equivalent is the offering memorandum exemption, where you have a lot of paperwork. It's basically like a required PPM That's ultra annoying.

[00:11:08] Ron Skelton: Talking about the prospectus? 

[00:11:11] Natu Myers: Yeah, but then they're more serious about it because, you quasi, don't you quasi may not need one as, as much for the other ones cuz the investors are accredited, meaning that they could have the money to lose. Not that they should, but you know what I mean. And then the other ones, it's more investors who are more, they could be more vulnerable. So then the regulation that says, Hey, have this paperwork. So that's another popular one a lot of people do. 

[00:11:33] Ron Skelton: What about crowdfunding? Is there, can you crowdfund money to raise money to buy companies and stuff?

[00:11:38] Of 

[00:11:38] Natu Myers: course, and it's a good idea. Just that like the max you can do is 5 million. So Reg CF and Canada has the same equivalency. The only thing is that for that you have to be with a broker dealer. That is a funding portal. That's the only thing with that one. So people that do it, they may, wants to get themselves in situations where number one, they don't have an [00:12:00] exclusive agreement with that, exchange or that funding portal. And number two, there's some funding portals where you just put your information on the website and then you still have to do all the work anyway. Just keep that in mind. Right? 

[00:12:09] Ron Skelton: So now do you guys like help do the marketing materials and stuff like that? You coach 'em through, here's how you speak to the investors. Here's how you, here's what you need to say. Here's what you can't say. Do you, do you provide any of that guidance? 

[00:12:24] Natu Myers: Yeah, exactly. So a lot of that. So then we do done for you pitch decks done for you, um, ppm, drafts done for you, financial models and projection all. Yeah. So all that's done for you. And then coaching more on the online, how to do that initial outreach. One is example is that we actually have like an army of I think few hundred, LinkedIn accounts that people actually rent and share, which is kind of another crazy trick, but just how to, talk to people to get them to open up rather than being an email blast or something. So yeah, all through that process.

[00:12:53] Ron Skelton: So we come to you, we walk through this process and then are there any things that an [00:13:00] acquisition entrepreneur need to know? Like in the back of my mind, when you raise money from third parties, you have to understand it's probably a, not a long term hold in the respect that at some point they want a capital event. Right. So when I take money, and I know this from the real estate space, I used to take private money all the time. The number one question is in my money safe? The number two question is when do I get my money back? And a lot of those investors, especially as a sophisticated private investors, they understand the velocity of money, which means how many times can they turn it over?

[00:13:28] So shorter deals are better to them. In some of those realms. So if you tell 'em you want to hold on their money for 15 years while you hold the company, it's less interesting then. I need it for three years to grow this and sell it at, on the backside. So you find that to be true inside of this, or It all depends on the investor?

[00:13:46] Natu Myers: Yeah. The quick answer is yes in general. Cuz we look at the audience, this, the most important is what's their criteria? And then we look at what's the, what's the benefits of them working to you versus putting the money in the s and p. And then the other one is what's the cost risk or [00:14:00] downside, in other words, of them putting their money with you in terms of management fees, performance fees or hold period. What's like, are the drawbacks worth the benefit? And I know the other things we can go to other things, but then, it's a function of all those, and then it's a hypothesize on this, and then test it out by just talking to the people in a specific point in time and then seeing what the results are.

[00:14:19] Just a scientific method because it, yeah, the quick answer is yeah, the shorter, the less risk and everything, but the only way to know is to test it out, just like how we were saying offline. Like some, the market has changed for some folks, so, people are acting differently and are more conservative. Right? 

[00:14:33] Ron Skelton: So what do you see? If you look, if you put the forward looking glasses on and you're looking at the next six months, 12 months, the potential that we're still in a recession, let's just, let's go down that path. I know the institutional money's kind of drying up a little bit, but if you know how that money works, they either have to give it back or put it to work, right? So the private equity, the venture capitalists, they've raised money, they've [00:15:00] made a promise to it. It's earmarked in setting there, they either have to complete their task or, do something with it. They can't let it set idle? I think the money's gonna start moving again as soon as it, as soon as the market calms down just a little bit.

[00:15:14] But what do you think's gonna happen inside of the private equity raising money and that stuff. You think is still gonna be more difficult in the next 12 months to raise money than it has been in the last 12 months? You think it's gonna ease up a little bit and, I guess I'll give you a chance to answer instead of giving all these hypothesis here. But what do you think's gonna happen?

[00:15:32] Natu Myers: Yeah. Well, I mean we have this little q and a call where we have some CFAs that we look at the macroeconomics and I'm just kind of taking from them and podcasts with, the one of Chma and all those guys. So one thing that a lot of them say is the, this whole interest rate and then the banking crisis at a time of the recording, institutional debt seems to be more of the play because we just see people finding it more difficult to get, even to get debt from, the banks are not a top four. [00:16:00] So there seems to be a growing resistance for people to lend, just based on what, what's happening. So perhaps looking at more institutional lending, our institutional players for debts could be the next play. 

[00:16:10] Otherwise, it may be hard to get, harder to get approved, even for debt, which is usually easy. Despite the interest rate, that's one thing. Number two, yeah, raising capital in general, it's harder. So I think that man, who knows what will happen? I mean, there's some predictions about, even some people even have these crazy predictions about hyperinflation and everything where interest rate is actually 50% per month. So those are really crazy, like, it's possible, but it's really unlikely. I just think what will happen would be that, the interest rate just went up a little bit and, by a few basis points there. And I think it's just gonna go back down slowly and, eventually people will open up again to the, to the smaller banks for lending.

[00:16:49] And I think the LTVs, the LTVs have been a bit, so the loan value ratios have been a bit short, like less debt to equity, based on what some of these interest rates we were seeing. [00:17:00] So I think there's gonna be a bigger need to raise equity because the loan value ratio may be a bit, they may be a bit like they won't be as high as they were before for these cash flowing businesses that people want to acquire, that don't have any assets. So then there, there will be a bigger need to learn how to raise equity. So those are the two things I see in the next like 24, 12 months. 

[00:17:20] Ron Skelton: Okay. The ruling typically is scared money's, tight money. So long as interest rates are going up and stuff like that, the investors can stay a little scared. I get that. Let's talk a little bit about your knowing that money's tighter, what do you tell the business owner or potential business owner, or the person like me, I come to you's like, look, I think I need to raise $5 million to, to buy this company. Do you go, if you're gonna raise money and you got the process, let's raise 7 million because you need operating capital and money's getting tighter and we don't know if it's gonna get any easier.

[00:17:52] So let's make sure you're raise enough money to buy it and cover operations for the first two years. Do you actually go into that realm with them and say, look, [00:18:00] raise a minimum amount by the company, or we can set a target above what you really need at the, for the acquisition cost, and make sure you have enough raise to, make sure you're in the safety zone for a bit. I think people overlook operating capital needs when they do these acquisitions. 

[00:18:16] Natu Myers: Well, yeah. Two comments on what you said. 80% of, sometimes what I do is really just expectation setting because, I mean, think about the claims that we're making, right? Raising tens of millions of dollars for somebody who doesn't understand the business. A lot of it is just really, I hate to say it, it can be babysitting and really just getting people to really understand what that means. So in a nutshell, expectation setting in terms of time and results. I know somebody in TD Securities, he could raise 40 million in the few weeks and so on, but then he can do it at. For only like these amazing deals for like three people he knew in his entire life. 

[00:18:49] So yeah, one is just setting expectations. The other one to answer your question would be the, just like when real estate, when like the money is that is needed, like let's say there's a 10 million acquisition and then you get a lender for [00:19:00] the other for 75%, so then you need to raise 2.5 million. It's never really just that 2.5 million because as you said, there's always opex, operational expense. So Totally. But I won't really go crazy on it. I would just, see if the money, if the deal is actually fundable first before people start over asking what they need. But I totally agree. You have to just factor in opex. 

[00:19:19] Ron Skelton: So how does it work? I mean, is there a consulting fee and then a success fee for raises.com? Or is it just a success fee? Or how do you, how does your business model work?

[00:19:30] Natu Myers: Yeah, so it is really just like subscription. So it's like this yearly membership or annual setup. And then there's like the platform fee for the creation of as many funds and as what somebody wants to create. And then the broker dealers who get involved if and when they do get involved, they're the ones who really take those percentages because, without the broker dealer part of raises.com, which may or may not be out by the time this video is out, then that one would take the success fees as well.

[00:19:54] So that's pretty much, it is basically like this entrance for the services. And then when they get in this, [00:20:00] into that walled garden, then the broker dealers come in and then can take those percentages, as well. And then if there's like a point where in the future like, our securities part, raises common Securities, Inc. If we're able to actually create the right entities for people, then obviously yeah, like it just makes sense to do so. Right. 

[00:20:18] Ron Skelton: All right. And then, what's the timeline? Like, I come into you, I have a business plan, I'm gonna buy a coffee roasting company. It's the only reason I thought that is that's what I thought I was gonna do last year. Now I'm doing media companies, but, totally different reason. It's a conversation for another day. Coffee companies, for instance, I come to you, I've got a plan, I got a business plan. I know what I'm gonna buy. I know the price range I'm gonna buy it in. I know what I'm gonna do with them, right? Because I have this business plan already as turn 'em into subscription based businesses. I know that, to fund the first acquisition and maybe the first two or three, I need $2.5 million or some number. And then I want to do a $10 million project over, over three years.

[00:20:54] If somebody sits down with you, what information I think we asked this earlier, how prepared do you [00:21:00] want 'em to be when they come through the door? Do you want somebody that's just like, if they don't know what they don't know and you wanna coach 'em from zero? Or do you want somebody to come into you with a, I've got a plan to do X, y, and Z. Here's my plan. Where did I mess up? Because a lot of times we don't know what we don't know, but we're gonna bring you something and say, here's what I've got. You're gonna look at it and go, that's cute, but we probably ought to do this over here instead. 

[00:21:19] Natu Myers: Great question. So to answer the tail end, yeah. More people who are, who are a bit less aware because honestly the amount of value we add is in direct. It seems to be in direct proportion to, doing things that people can't do themselves. There are about like 40 or 60 or so questions that we go through to just understand what the share structure or the limited partner structure so is because the thing is that for people who want to actually take a, the platform fee, but then also take chunks of deals and so on. It helps if you're the one who gives them that kinda value and knowledge initially, cuz then you can actually, companies can write themselves into the, into the ppms and everything so that you know, that, on closing as well, then you can [00:22:00] get the wins too.

[00:22:00] And that's just a long way winded answer of saying, yeah, you just don't know how to structure it. And in terms of expectation, probably four months. Like we had the last one, Henry closed the deal in four months, and so.

[00:22:11] Ron Skelton: Okay, so it's in four months. So four months. What's the average? Is it probably six to 12 months?

[00:22:16] Natu Myers: Yeah, yeah. We say six to 12 months. Yeah. That's the expectation we always set.

[00:22:19] Ron Skelton: Yeah. Six to 12 months. That makes sense. If you look at the entire process there is it, people already have connections. I mean, even if they, if you haven't listed a coal, I mean, how many of these guys are actually successfully closing, raising funds? Cold, reaching out to accredited investors without prior relationships with them?

[00:22:39] Natu Myers: Most of it is through the LinkedIn introduction. So there's a minority that do it cold. The ones that quote unquote do it well, it's kind of trips through the LinkedIn outreach, because we had, I guess the most extreme example, we had somebody who came from another country and then in 2019, he had no connections with base new Vancouver. And then in 2020, well it, yeah 2022, he ended up closing a limit, [00:23:00] like eight limited partners in, in a deal in, Alberta. Where it's very, us up north are more conservative than people down south.

[00:23:06] So that one happened, but it honestly, it's really through the LinkedIn a, combination of the LinkedIn mutual connections or warm introductions that can get the first one going. And number one, number two, you had a cold. It takes forever. And then eventually, they turn into warm once they're nurtured. So then that's where the six months thing comes in. 

[00:23:25] Ron Skelton: I have an idea for some of these guys. And I send people, I do this, I send people to these things all the time. In the real estate world, I raised money for acquiring real estate by going to events where they teach raising money. So I would go to a room where they like there was a course that was taught in the real estate world on how to become a private investor. I went to that every time. It was within two or 300 miles to me. If you came down to Dallas or something, I would go to it.

[00:23:49] And I'd walk outta that room with, everybody in there's trying to learn how to be a private investor. And I walk outta that room with, I think the best I did was $297,000 wired to me in eight days from leaving the room. So [00:24:00] it's just like I had real estate to invest in. They wanted, that's what they were there, learn for. We did a lot more deals than most people. When they would do the little thing and like this guy had this habit of doing this thing in the room. Like, who here has done a, a real estate deal this year? And then some hands would go up. Okay. Who's done three and then four. I usually, with our little real estate investment firm was one of the guys that had their last guy still having their hand up.

[00:24:18] Cuz in our best year it was dozens. Right. It drew attention to us and we were able to raise funds in the room. There are some comp, there are some guys out there that really do a good job about teaching how to do, say real estate or something else, and how to use syndication. And they teach their people to invest in each other's deals. Right. And I'll call one of 'em out right now. Brad Sumrock in the real estate, apartment complex. If somebody can't walk into his, he holds those events in Dallas on a regular basis. There's usually 300 to 700 people in a room. If you can't walk into that room and walk out with an investor, you did something wrong.

[00:24:52] Everybody in there is trained to ask each other, what are you working on? And can I invest in it? They do syndications. It's all they do. They put money in each other's deals. They help each other [00:25:00] succeed. And, it's impressive. There's events like that. I think there's one, I haven't been to it yet. There's one in the business space, I think it's called Pit Bull Conference or something like that, but it's about raising capital and I thought about going to it if I decided to do a fund. 

[00:25:13] Natu Myers: Yeah. No, no, it's brilliant. 

[00:25:14] Ron Skelton: What ideas do you have for it? I just, I threw that out there cuz I knew it's used, I used it in the real estate space. It worked. Right. I bet it would work in this space too. Getting out, shaking hands. They do the politician, kissing babies and shaking hands. You gotta go out there and, meet people, show 'em your ideas, show 'em that you have a spark. That you're a human being with something cool going on, is what I call that spark. And then have 'em want to be involved in something you're working on. What are your recommendations other than the LinkedIn outreach and stuff? How do you have people, how do you help 'em become successful in raising funds?

[00:25:47] Natu Myers: Yeah, so then it's definitely through the, it's a lot of things at once, right? It's kind of the, we combine the warm and the cold. So number one, it's really the warm introductions. So this is usually the best way. It's like somebody, let's say like, [00:26:00] they're more of a lender or a broker, but then what happens is they have some clients that are credited investors. So through this way, and then they're the ones who they're registered with (afin?) Registered company.

[00:26:10] So then, the onus is on, on that, on them. But then the idea is, they already know somebody that's coming from us, quote unquote, and then they're able to, already have that broker trust. And so that helps a lot of, that's helps things move really quickly. So that's one. Two is also community because some people we know that they worked with success before they had a fund, like already raised, maybe $12 million commitments. And then afterwards, after they actually raise money for our fund, then are actually open to deploying capital into deals. Because they actually already have the fund together. So then that can help. And then afterwards they can actually fund some of the, new deals that come in. So that's something else that's started because like, after like launching during the pandemic and then, now is like two, three years has passed.

[00:26:52] Now some people are actually like at the point where they can actually deploy. So that's the second thing. And the third thing would be, we just talk about, [00:27:00] we like, I mean, there's Dunbar's limit, like people that have a limit of how many connections they can make. So then we still do, we still believe in the outreach, the cold side of it. Because, that's how I met this, my business partner, Andrew Damon, and then it just, through cold outreach, and then he connects me to a billionaire in, China of all places. It doesn't happen often but, we try to do both. And then the last thing may be the, the point is just to get people to agree, to be, raise their hand and say it after they're interested in your deal before you even have the deal in place.

[00:27:27] Because people are too much on the other side where they're obsessed with getting an amazing deal. And then when it comes to raising, they even get it under contract, but then they have no investors. Like, I don't know how that makes sense, but that's what a lot of people are being taught.

[00:27:38] Ron Skelton: In the, real estate world, I used to have what I called shelf money. And what shelf money was, is I'd talked to, I mean, I'd even go on road trips where I'd go to those conferences and stuff like that. I would plan a six day trip where I'd go to, Dallas and hit one. I would go to Austin. I might go to like, here's what we can, good examples for smaller, I don't know if there's probably less than probably 10 or [00:28:00] 15% of the people. At these meetings I'm about to tell you to would be considered accredited. Now, the Brad Sumrock, I bet a bunch of those guys are. I bet most of those guys are accredited. But if you go to some of the self-directed IRA meetings like Quest has and some of the others, there's a lot of, sophisticated, but unaccredited investors in the room. And you go there, you meet with them, you make friends with them, and later on, if you've got a project, they're available, right?

[00:28:24] They're looking for investments. That's why they're there. They're trained on how to self-direct their IRA and put it into real estate. So I used to do the road trip of where I would go and visit, like they're, they would host events and I would try to plan, where can I get four days and hit four cities where I go to four different events and take rent a car and just go, right. And a lot of times I didn't even, I didn't have an investment to put the money into right away, like it was real estate. But I knew I did so many deals that it wouldn't take long. And I would go out and meet people, tell 'em what we do, what we buy, how we pay our investors, how much we usually pay them and stuff.

[00:28:56] They would, answer questions. I would not, it wasn't a [00:29:00] pitch. It basically, tell 'em who we are and what we do, and they'd just ask me a lot of questions and I would answer 'em. And then at some point, like, Hey, I'd really like to talk to you more about that. And after that second or third conversation we got into, well, if I were to accept you as an investor, how much would you have? How much would you be able to put into what we do? In my mind, once they gave me the verbal commitment, I was like, well, I got $300,000. I'd be willing to lend you. I wrote their name down, I put his stuff in, called my shelf money so that when I had a deal, I would call 'em up and I'd say, Hey, last time we spoke about a week ago, you said you'd be interested about 300 k.

[00:29:31] I've got a house here that's 2 25. We'll still pay the same interest rate. We're probably in and out of this house in, 12 months or less. Is that something you're interested in? And if they said yes, then I did the deal with them. We went on. And if they said, well, I don't know, whatever, it's like, okay, you're, I have a list of people, I'm calling. And it's in a certain order the way if you under, and they've already been taught, they've into these courses, they're teaching the velocity of money. I said, if I put you to the back of the list, that means the guy that loans me the money, I call him again the next [00:30:00] time. So it's okay to tell me no, just understand that next time I call, I'll call everybody else on my list before I call you cuz you know, you hesitated and I need to, I gotta close this house, right?

[00:30:11] And, it worked. I don't know how that would work inside of this space cuz it's larger pools. It's not like little chunks of money like I need, and like I say, little six figures. We needed chunks of six figures to buy residential properties on a regular basis. But, do you teach these guys to go out and meet people and know what they're willing to invest, have those relationships, get them committed, and then like, okay, I'm working on this. I'll be able to present something to you at a certain time, or should the pitch be ready when they talk to 'em? 

[00:30:38] Natu Myers: What you just said in the last two minutes, if anybody listens to this podcast, the only thing that should take away from this podcast is what you said in the last two minutes. That's literally exactly what we're trying to communicate to people. So exactly what you did. The thing is that, yeah, flying and meeting them and all this, the idea is we just want to make sure for that first initial touchpoints, we is just to fill them out. The thing is that the reason why what [00:31:00] you're doing is really clever. Is you're using other people's traffic, to pre-vet some of these leads. So that's why it's brilliant and that, so that's basically where you teach. The only thing is that there's that, and then the second one is kind of the follow up where it's where they go over the entire, we just say go over to subscription agreement.

[00:31:17] And then we like to say that. Because sometimes for these bigger investors, there's a bit of a more, there's just a few more calls and really it's just q and a and objection handling. That's how we pitch it. And then just being honest and just saying what they think actually is. And then the next step, yeah, we would say, they can visit the facility, and so on. But that's exactly what we're saying. Just that instead of it using other people's traffic, which is brilliant, is that we would just say, Hey, let's have a system to create your own traffic. And then there also, we didn't go into the details, but then there are also ads and different things that people run. We know two people that are running, Facebook ads. They're getting hundreds of thousands of dollars in commitments just from cold Facebook ads per month. 

[00:31:53] Ron Skelton: That's interesting cuz I didn't, I was curious on how they did. I'd see it on Twitter occasionally. I know at least, in our space this [00:32:00] acquisitions, acquisitions and mergers of small to medium businesses, I know that at least two or 3, 1, 2, 3 that I can think of, of the, gurus, the guy teaching it have raised funds. They created a private equity fund. Just a private placement memorandum in the paperwork. Posted about it on Twitter and raised three to $5 million within a couple days because of their following. And, I've considered it, but I was like, okay, what's the regulations behind that? What can you can and can't do?

[00:32:27] How do you prove these guys are accredited? I have a decent following and as a matter of fact, I have a larger following than one of the guys that raised all that money. And I was like, it makes you think twice, right? I have about a hundred between all of 'em. I probably have over a hundred thousand followers between all of my social media accounts. And, but what are the regulations about posting, saying, Hey, I've created a private equity fund. I'm raising money to acquire, x, y, Z assets. If you're accredited and wanna be interested and interested in this, can you make that advertisement with these type of, these type of regulations and stuff?

[00:32:57] Natu Myers: Yeah. It depends. Like, I'd be curious, we can go [00:33:00] in, it's funny, after the call we can actually go in something called Edgar, and then we can type in a guy's name and then it'll show the actual deal, if he papered it up. So the quicker answer is when I was at another broker dealer like, usually you don't say the terms of the deal or anything with the terms of the deal. Like you make this much money, until they already check the box that they're accredited and then you could say, oh yeah, you make this much money. Because the people that are doing that, either it's cowboy style or they're talking about, these little kind of JV deals that are just structured as debts or promissory notes, on this small stuff on Facebook groups, because that is exempt sometimes from securities, laws.

[00:33:36] So sometimes people do that. But yeah, the quick answer is yeah, usually you don't wanna say the terms of the transaction unless like it's through, reg cf, which is handled with a broker dealer, which is really unlikely to have people that, haven't read the terms of the deal before they see the terms, or through Reg A, where they have to read all this text anyway for them to agree to sign on to it. So the only thing you can say to answer your question is just like,[00:34:00] if you go to Grant Cardone's website, I'm accredited, so usually it's, I'm accredited. And then, I didn't get everything. Or it's Reg A and Reg cf. 

[00:34:07] Ron Skelton: So to clarify, what I said was, they just, nobody gets confused out there. And one of the guys listening in the show might think I was talking about him. They didn't say how much they had made, they said how much they were raising. Like, we're raising, we're looking to raise $5 million and we're gonna buy X, Y, Z type of companies. And that's all they would say. And people would like, Hey, I'm in, I'm in, I'm in. And they'd get commitments and then they'd have calls and prove they're accredited and stuff. They weren't gonna, they weren't saying, I'll make double your money or I'll do it. They didn't give you any promises of that. And just to make sure I don't get myself investigated when I say I raised money, I never pulled funds, right?

[00:34:40] So if you know this already, but for those guys listening where you get money taken, private investor, where you can get yourself in trouble, taking money from private investors either for real estate or for business is where you, you create a security, and correct me if I'm wrong on this, but you create a security, when you take multiple people's money to enact in one process, it's called pulling. [00:35:00] So when you pull multiple people's money together in the same swimming pool, and then buy an asset from that, you've effectively, in the United States created what's called a security. And there's all kinds of rules of whether they're participating, not participating in everything else. But when I take a single investor and do a debt structure and say, here's my asset. It's the collateral for a loan from your private lending to me.

[00:35:20] We're gonna take all of your money and apply it to this one thing. Then it's a, it's not a securities issue because it's a single investor on a single asset. And for those of you guys that say, well, you can do multiple. It's because you're taking second mortgages, people having to take it different places in priority. You can bring three investors in to buy a big house, but somebody has number one priorities. They're the first mortgage. Somebody has a second mortgage. If you put everybody at equal terms, whether you want to call it or not, you've created a security. Once you put everybody on the same playing field and promised everybody they're gonna get their money back at the same level. Then you're playing in a realm where you probably had some, should have some paperwork done. 

[00:35:57] Natu Myers: That's a really nice mental model that you shared and it's [00:36:00] refreshing. The preamble before this, before all this too, is kind of like people, the problem of securities law and we can listen to the lawyers what they say too is that, It's principles based rather than rules based. So sometimes in the practical world sometimes it's even less about the definition, which is obviously super important. Sometimes it's more about bumping into somebody litigious who doesn't like you, or an investor that's angry with you, and then they whistle blow to the S E C because a lot of the SEC's efforts, instead of it being proactive, unless there's huge money involved, it's usually not proactive, it's more reactive. So then it's really just defense against that. But I agree completely, but the only thing is that some you can have like another security that's debt only that can convert, the convertible, the venture or something different. Or you just talk to an investor that just has a bad day and then they just want to, get you in trouble. 

[00:36:47] Ron Skelton: Yeah. I know of a few people that got cease and desist orders, from the SEC because they were on like Facebook going, we're wanting to buy a mobile home community. We need X million. We need $2 million to buy this facility. Now, they're soliciting for investors [00:37:00] on a deal that's big enough to get attention. It only takes one guy not to like 'em to turn 'em in, and they get a cease and desist order from, from the SEC. As far as I know, they usually start with a cease and desist order. I used to own the local Real Estate Investors Association in Tulsa. I volunteered for it before I ended up owning a piece, I'd say I had partners in it.

[00:37:17] And I had a real estate investment teaching company where we taught real estate investors, for a while. So we taught a lot of this stuff. But, I've had people go, no, no, no, they'll never say anything to me. I'm gonna, I'm gonna do it this way. And then, I just smile and wait because luckily for them, at least in most cases, in previous, past history, they get a ceases and desist order before they get, a big trouble. I know one guy who lost everything. The SEC, actually with the FBI raided his, offices, took all his stuff, took all his properties, debited him up, sold him off to the investors and everything. Cuz he wasn't following the rules. His attorney said he was doing just fine cuz the way he structured it, he was actually creating securities and he wasn't following the rules.

[00:37:58] And the second thing he was doing is [00:38:00] he was kind of lying to the investors. He was the reports he was sending out at the money. He had multiple mobile home communities and what he was doing is sharing numbers from one to make the other ones look better. About as close as a Ponzi scheme that he could come up with. He wasn't missing. He was drawing faster than he could raise the money to grow. So he would use other people's financials to make, his other property's financials to bolster his, the one he is raising money for. Eventually somebody got mad and turned him in. But, he came to me after all that and said, Hey, I wanna partner with you.

[00:38:31] I wanna go straight. Like, I can't touch you with a 10 foot pole. I'm not interested. It's not, not that you're, guys found crises. He's on the right path now. There's a thing inside of this world called guilt by association, and if you run around and hang around with bad actors, people assume you're gonna do some of the same stuff. And you just can't do that.

[00:38:52] Natu Myers: I totally agree. Like, I mean, there've been times, we're doing risk management and then for some reason I think. Since we started networking more on LinkedIn as [00:39:00] opposed to the Facebook advertisements. For some reason, sketchy characters went down. But no, we had to turn away, we had to turn away, tens of thousands of dollars. We had to like turn away and give back because, we had to have like, systems to like do due diligence and things, we saw things that not really were particularly like incriminating or anything, but just risk. Money isn't everything because you make more money in a long term anyway, if you just, keep your reputation in tax, right? 

[00:39:22] Ron Skelton: Yeah. It's the real estate world is like, you make a lot more money if you can avoid the lawsuit. So the, try not to do anything to do that cuz the attorneys are expensive. The only person that makes any money on a lawsuit is the attorney. So let's dive down a little bit deeper into, okay, we've talked about coming to you, working with you, raising money. What does the process look like as far as, I mean, is it just wired to them at a certain point or they, you set up a closing company with escrow and it's wired into escrow? How does the money change hand? Like who touches the money inside of these transactions?

[00:39:55] Natu Myers: Oh yeah, sure. Really simple. So either like if somebody's invested by [00:40:00] shares of the target company that's being acquired or, they're gonna creating a limited partnership to get a percent part of that limited partnership. Yeah. So then you have these subscription documents. You have the private place memorandum, and then you also have, we have a few partners we work with either, legal escrow accounts or broker dealers who just maintain, they have an accounts, bank account, and then they have the escrow in the bank accounts where they have, they're able to just have these subscription agreements, attached to that bank account.

[00:40:26] And then that's pretty much it in a nutshell. Then after all the, after I guess the first closing is over, then the funds we get then get sends to the company to grow their business. That's it in a nutshell. And then when it comes to ongoing reporting obligations and requirements, I guess let's some people get some free traffic, like, remember when we were talking about OPEX earlier, we just recommend to just have a percentage of that money, used to pay for, investor reporting software, and then just like an email newsletter. So either use some of that money, to hire an accountants to do, ex supports and share the financial [00:41:00] statements of the company with landmarks or, in addition to add some fancy software. I mean, there's Juniper, Juniper Square, those ones are really good.

[00:41:08] And then that's the only one I'm gonna shout out because, that's the only one that I still continue to hear good things about. So, yeah, and then that's how it works.

[00:41:15] Ron Skelton: So they get the commitment for the money, they do the closing, they get the money. They report on it. And I guess everything else of that is structured based on the deal, right? Like when the, when does the investor expect to get their money back or receive payments and all that. That's all structured in every single deal being unique?

[00:41:37] Natu Myers: I mean either, it's usually there're three, either it's annually, which I, we don't recommend. And quarterly reports. Sometimes they're even monthly reports because now we are even recommending monthly. 

[00:41:47] Ron Skelton: I'm not talking about the documentation, I'm talking about the actual money change in hands. When do investors get paid? Like how do they get paid and when do they get paid? They get paid quarterly dividends or is it unique for every deal? They get paid at the [00:42:00] exit? Like how do, how does the investor realize the return on their investment?

[00:42:04] Natu Myers: Yes. Similar schedule either, but except it won't be annually. Either be, unless, It's a combination of the deal, but either we try to do it, we try to recommend it, do it quarterly or monthly. Those are for the dividends for share purchases. But if it's one of those wild deals where it's like a development or some, higher risk deal where there's nothing until a certain, points, which we try not to take on deals like that, then it would be, then quarterly or the monthly payments would begin after that point where the revenue comes in.

[00:42:32] And they may even have a first lien. And then they have that. So then for limited partnerships and funds, which is another story, completely. And that's like another story complete, but basically you have the quarterly or the, monthly, distributions. And then you can also have a, acquisition fees and disposition fees, as well. And then, that can affect the amount of money that somebody would get. But then the distributions could still happen, be at the same time. But then if there's like a sale or there's like the fund shuts down or there's like a sale of an asset or a disposition, then [00:43:00] that could be an extra bump that's not in that quarterly or monthly schedule. So that's all I know about that. And there may be some nuance based on the deal. 

[00:43:08] Ron Skelton: Okay. We covered bringing something to you. We've covered kinda how it looks like to raise the money, some ideas about where to do it. The LinkedIn outreach and I gave you some ideas in a different market that might work in this market. We talk about closing the deal and paying the, paying the investors. What did we miss?

[00:43:26] Natu Myers: I think that's pretty much it. I think the key thing is, I'm gonna highlight this part again. Getting the investors interested before the deal is really critical, especially as we're entering, more of a bear market. So yeah, let's just focus on that for everyone listening. Get the investors compliantly, compliantly a keyword, before you get the deal. And if you're able to have a system to do that, then it's almost guaranteed that you'll get the down payment money for your acquisition anyway. 

[00:43:54] Ron Skelton: Do you guys coach 'em on what compliantly means? Like what they can say? What can they can do, can't do? What can they can say, [00:44:00] can't say ahead of time? Or is that something that you want them to start doing before they come to you? 

[00:44:06] Natu Myers: Oh, no, we take care of that. I mean, we're literally being, like I'm literally talking to the Audit Ontario Securities Commission, registration officer, like basically on a daily basis right now. So, all we're doing is we train people up on just saying, Hey, don't say this. Don't say the terms of the deal. Make sure when's it go on the phone, when not to go on the phone. Ultimately, it's for informational purpose, but the quick answer is, yeah, we're just trying to make sure that people are careful.

[00:44:27] Ron Skelton: And then, you guys have like ongoing trainings, ongoing mentoring sessions, masterminds. How are they learning once they, somebody reaches out to you, what does the learning process look like? 

[00:44:38] Natu Myers: Sure. So then for the financial side, you know we have a few CFAs that build models and do all the financial side of it. There's currently myself and then some other associates that are on the compliance side. So we have group calls where all of us come in. We record the group calls, transcribe it, it's searchable, and then we're playing with some AI and GPT 5 and whatever to make it really cute. And then they're also just basic email supports, [00:45:00] help desks. Right. So we have that. And then the last thing is that there's a community of people who they talk to each other to see what's going on, within between themselves. 

[00:45:08] Ron Skelton: Okay. And how do people find you if they wanna work with you, if they, want you to just take a look at, can somebody reach out and go, Hey, here's what I've got. Is it even fundable? Do you guys take a look at things and go, yeah, we'd like to work with you? 

[00:45:21] Natu Myers: Yeah. Well, I mean, the latter question, you can't. I mean, bless his hearts. Somebody working on the beryllium deal and we just say, listen, like if there's somebody raising capital for it to grow the operations of their business, 99% of the businesses, there's no revenue is we can't bless your heart, but we can't. And then there's some that are actually in revenue and then we still deny them because we're just focused on the down payment money for the acquisition of an assets, real estate or otherwise. And then in terms of how people find us, and then just this raises.com right there.

[00:45:49] Ron Skelton: Yeah. raises.com. So they go there. And then, I appreciate you being here. Is there any, uh, anything we should probably wrap with? 

[00:45:57] Natu Myers: That's really it in total. Again, for the [00:46:00] third time, I really emphasize get the investors lined up compliantly before the deal. And then once you do that, then you're off to the raises.

[00:46:07] Ron Skelton: Awesome. I like what you did there off to the raises. All right. Well thank you for being on the show. Hang out for a couple minutes afterwards and we'll chat. And that's the show guys. 

[00:46:15] Natu Myers: Thank you everyone.