Transcript: ‘How to Build Your Own Crowdfunding Platform’

Edited Transcript from the podcast episode ‘How to Build Your Own Crowdfunding Platform’

With Special Guest Adam Gower, Ph.D.

Originally Broadcast on March 24, 2022

 

Kim Lisa Taylor:

Welcome to Syndication Attorneys’ free monthly podcast, where we talk about topics of interest to real estate syndicators, with the opportunity for live questions and answers at the end of the call. I am attorney Kim Lisa Taylor. Before we get started, please note that all of our podcasts will be recorded and may be used for future promotion, posted on our website or broadcast in a podcast available to the public. If you don’t wish to have your voice recorded, please schedule a one-on-one consultation instead of asking questions during the live call. Information discussed during this free podcast is of a general educational nature and should not be construed as legal advice.

Today our topic is how to start your very own crowdfunding platform to get investors. And our guest speaker is the infamous Dr. Adam Gower.

Dr. Adam Gower:

I love the infamy.

Kim Lisa Taylor:

If you’ve never seen Dr. Gower speak before, he’s a very dynamic speaker and he’s interesting. He’s interesting and engaging and funny. So this should be an entertaining show.

Dr. Gower, thank you so much for joining us today. Tell us a little bit about yourself and your company.

Dr. Adam Gower:

Sure. I’ll try and keep it brief because you have asked me the one question that I like talking about the most: me. So I will try and keep it brief. I actually have been involved in real estate investment in finance since 1982. It’s a very, very long time ago, when I started pulling wires for an electrician. That’s how I started in the industry. Although my family was in real estate in England, many years ago in Europe. And the short story is that my career spanned all the way through to 2007 in raising capital and doing deals. And I worked for institutions. I ran a division of Universal Studios in Asia Pacific (regarding) their real estate. I did my own deals. I worked for, well actually … until 2007, when I sold my portfolio right at the beginning of the global financial crisis.

And then I went to work for a bank because they’d done a lot of lending to real estate sponsors. And a lot of the loans were nonperforming, real estate collateralized. So I worked on their balance sheets, cleaned that out. And then I worked for Colony Capital, same kind of thing. They had bought $7 billion worth of notes with the FDIC, all distressed. And shortly after that, I started developing … well when the laws changed in 2012 allowing for general solicitation, I started building digital marketing platforms for sponsors because it occurred to me that this was a transformational shift that you no longer had to have a pre-existing relationship with somebody to be able to say, “Do you want to invest with me?” You could advertise on Facebook, for crying out loud.

So that is what we do now. We build digital marketing platforms, crowdfunding platforms for sponsors. We teach sponsors how to build them themselves in all different kinds of ways. And that’s what we do. We help sponsors find investors and raise money — big scale.

Kim Lisa Taylor:

So let’s just give a little bit of foundation for what you’re talking about. So, for the attendees, there are two federal exemptions that are very commonly used for people to raise private money. One is called Regulation D Rule 506(b). These are exemptions that are promulgated by the Securities and Exchange Commission.

So first of all, when you’re selling securities, you either have to register your offering or qualify for an exemption from registration. Registering your offering is going public; it takes a long time, it’s very expensive. You don’t have time for that for real estate. So everybody does the alternative, which is qualify for the exemptions. So the exemptions that everybody uses, if you’re crossing state lines — so when you’re buying properties in multiple states, or you have investors for multiple states — then you’re going to use one of these federal exemptions so that you only have to follow one set of federal rules that supersedes all the individual state rules.

And the two that everybody uses are Regulation D Rule 506(b), which is the “friends and family exemption,” or Regulation D Rule 506(c). With 506(b), you can raise an unlimited amount of money from an unlimited number of accredited investors and up to 35 non-accredited but sophisticated investors, but you can’t find them through any means of advertising or general solicitation. The way to prove that is to be able to show that you have a pre-existing, substantive relationship with those people before you even offer them investment opportunities. So a lot of people start there, but then when you’ve run through all your family and friends and everybody that you know, you get to a point where you need to start advertising. And by then, hopefully you’ve built a sufficient track record that you can successfully advertise. And then you’re going to go into the 506(c) world.

So that’s where Dr. Gower comes in. Now you’re ready to do 506(c) offerings, and he’s going to help you set up a website that’s going to be able to attract those investors to you, and some automated systems to keep them engaged so that you can get them to invest with you when you have deals. So that’s the gist of this show is talking about how you can do your own 506(c) crowdfunding platform that allows you to advertise and bring in accredited investors that you don’t know before. So that’s your foundation.

Dr. Adam Gower:

That is the small print.

Kim Lisa Taylor:

That’s right.

Dr. Adam Gower:

That is the small print that lies behind “I build crowdfunding platforms.”

Kim Lisa Taylor:

So now back to you, so we know about you and what you do. So you’re helping … you’re a marketing company. So what does a typical GowerCrowd client look like?

Dr. Adam Gower:

Well, it really depends. We take on private clients and for our private clients, we build the whole thing for them. And, those clients typically are multi cycles seasoned veterans of real estate, real estate development. So some of them, our biggest client has 16, I want to say last count, $16 billion under management. And our smallest probably, smallest portfolio client may be a hundred million (dollars). Yeah. So established, seasoned sponsors who have traditionally only ever done 506(b)s. In other words, they’ve only gone to a very small network of investors with whom they have pre-existing relationships and who they have known forever, basically. And it’s the old-school way of doing it. And they have realized that it is a brand new world, a brand new opportunity to be able to raise capital online. And so they come to us to help expand their investor database. So that’s one … our typical private clients are larger-scale, established, multi-cycle seasoned sponsors.

Then we also have a program where I personally guide clients — or in small groups — guide sponsors through the same process. So instead of doing it for you, we do it with you. I personally teach you how to do it over a 12-week period. And those sponsors are typically … well, it varies, really, just less institutionalized than the bigger guys, but still relatively substantial. It could be anything from … we do have, we have some that have single projects, for example. They just have one project that has long tail on it. We’ve got one guy that has an opportunity fund. For example, it’s a $28 million deal. He wants to do $14 million in equity, so we’re going to help him build out a platform. And really small — sub-hundred-million-dollar, anything under a hundred million (dollars), anything, $10 million and up, I suppose, would want to go through that program.

And then we also provide all kinds of training, recorded training, and that is across the board, really. We have some larger clients that like to buy those and just do it themselves in their own time, all the way down to startups, basically folk that are just getting into the industry now…

So let’s just look at the evolution of capital raising. It used to be — I haven’t got any of my own cards because I don’t carry cards anymore — you used to have a card, your business card, and you would meet somebody who you would exchange business cards with. You go to a conference and “here is your card, and here is mine.” And you’d take that back and it would have an address on it and a phone number. And you’d call them and you’d follow up and you’d send something by mail. You might get together with some of them. And then over time, maybe 20 years or so ago, during the dot-com boom, it became necessary to have a website. You needed a website. You couldn’t just have a phone number. So you’d have a website and 99% of people, 99.9% of people, have websites.

Not everybody, but most people have a website, and that website is nothing more than a glorified business card. It’s got a couple of pictures, a bit of a blurb and a “contact me” page. That’s basically all there is, and that’s fine. That was fine until the laws changed in 2012. Now, you have to have a functional machine that can leverage the power of the internet. Leverage the power of digital marketing — it was never allowed before —  in order to allow people to find you, learn about you and come to you. It reverses the mechanics of what goes on. Now you don’t have to go out and find them. They will come to you, but you have to have a presence online that enables that to work and to happen. And that is the next evolution. So that’s a functional website, lead-generating website. I forgot what your question was, of course … But I’m going to stop right there.

Kim Lisa Taylor:

Yeah, no, that’s perfect. Because really there are two different reasons to have a website. One reason a syndicator has a website is as a credibility package. This just shows that you’ve got a storefront. You’re a legitimate company, where people that you’re trying to buy properties from can check you out. Brokers can check you out. Lenders can check you out, your investors that you meet, you can send them to your website and they can check you out.

But then the alternative to that is to actually have a dynamic website, which is more like our website. Our website for syndication attorneys has a ton of content. We’re constantly doing things to try to drive people to our website that will schedule appointments with us, and then ultimately learn about our services and hopefully become clients.

So that’s the other website that Dr. Gower’s talking about, is where you are going to be driving people to your website so that you can engage with them and turn them into prospective investors and get them to invest with you in the future. So that’s the world we’re in right now. There’s nothing wrong with having the other type of website. You just need to understand which kind of website you want. Because one’s just for credibility, but you’re not…

Dr. Adam Gower:

Yeah. I mean, look, I would … Kim, I would make the case that having a website that has no functionality is a complete waste of time. It’s invisible. You will not be found. You will not be seen. You’ve got to…

Kim Lisa Taylor:

Unless you send somebody to it. That’s right.

Dr. Adam Gower:

You have to proactively send somebody to it. And if you proactively send somebody to it and it doesn’t have functionality, it is useless. It is useless. When I say functionality, I mean lead generation, prospect tracking and educational content. If it doesn’t have that … I mean, it’s better than having absolutely nothing. If all you have is a Gmail address, nothing at all, that’s not good. Although I’ve come across some huge family offices that have … it’s just remarkable that they’ve managed over the years, but those private closely held family offices that want to come out from under the rock they’ve been under for as many years as they have. But for somebody that is trying to expand and build their business and grow in this incredible economy that we’re in, as wacky as it is at the moment, having a website for credibility means it has to have functionality.

You’ve got to be able to capture leads and educate people. And that also, by the way, extends to your social media. Your website is the epicenter of all education. When I say educate, let’s clear this up, because it can be slightly baffling. Let me explain how that works. Anybody on this call has probably raised money somewhere. And if you think about how you’ve done that, think about one of your investors and just picture in your mind for the moment, the first moment you met that prospect, when they were just a prospect. It might have been through an introduction. It may have been through a conference. Who the heck knows, but you met them the first time. And now remember, or recall each stage in how you developed the relationship with them before they signed on a contract and sent you money.

What were the stages? They wanted to know your background. They wanted to know your experience. They wanted to know your philosophy of investing. They wanted to get to “know, like and trust you” before you could even pitch them a deal. It might have been at the country club, who knows? The classic country club scenario. Think about what that relationship took, what it took to get to the close before they sent you a check. That is the education you put on your website, everything that you taught about you, your philosophy, your background, your experience, your view of real estate. How you find deals, how you underwrite deals, what deals, what asset class, why you like your asset class, everything that you explain to them … that is the education I’m talking about. And all you do is you convert that into a digital format.

You create the videos, you create articles, audio, you can do podcasts, whatever it is, that is what you put on your website. So it is the corpus of knowledge that you have all domiciled on your website or put on your website for somebody to consume in their own time, on their own device, wherever, whenever they want to; they don’t want to be pitched. They don’t want to go through those dozens of meetings that you had to go through any more than you do. They want to be able to learn about you on their own, anonymously. And when they come to you, they will be ready to invest. They will be predisposed. They’ve already bought in to your Kool-Aid or whatever you call it. They’ve bought your story. They’ve learned about you. Now they’re ready to invest. When I talk about a website, that’s what your website needs to have.

Kim Lisa Taylor:

That’s interesting. So again, using an analogy to our website, I think we have some of that. Maybe not all of it, but we do these podcasts so that people can get to know us. We have our own podcast platform. We create tons of educational content. So when people go to our website, they’re getting something of value, and then they feel like, “oh, well, because they knew enough to write this article that educated me, they know what they’re doing, so why don’t we work with them?” And that’s where you’re trying to get to.

Dr. Adam Gower:

Exactly.

Kim Lisa Taylor:

You’re positioning yourself as an expert. Would you say?

Dr. Adam Gower:

Well, you end up being perceived as an expert. All you are doing is really just talking about … any way, shape or form that you’ve raised money before, it’s always been in person; you’ve had to explain the same thing again and again and again and again. Each time you meet a new prospect, you go through the same dog-and-pony show. When you digitize it and put it on your website, you never have to do that again. You really don’t ever have to do that again because your prospects will consume that themselves.

Think about it. When you go out and buy something — and I use the example of a vacuum cleaner, because it’s a $400, $500 product, whatever — and not so long ago I bought one, we needed a new one, the old one clapped out. I spent an hour researching a $400 product. Consumer Reports, all the Google report, whatever, the Amazon reports. I went to websites. I checked out and I identified which one I wanted. It was ideal for me. That’s what I did.

And you’re asking people for tens, hundreds or thousands or millions of dollars in the aggregate; don’t you think they’re going to do research on you? They’re going to research you! And so your job today is to make that as easy as possible for them to do the research. And trust me, I’m a doctor — I love to say that — they will. If you don’t do it, if they run a search on Google that says, “how do I invest in real estate?” — and I’m oversimplifying it — but if they run a search on your name and you don’t pop up, or you are in data center investing or self-storage or multifamily, whatever it is, if they run a search, there isn’t enough information there.

And they want to learn something and run a search. Guess what’s going to happen? Somebody else’s website — probably one of our clients — is going to pop up in the search. They will learn from that person. And they will invest with them. Not with you.

It’s no longer optional. It is now mandatory. If you want to raise money online, you have to have an online presence. Period. Otherwise, you don’t exist. It’s as simple as that.

Kim Lisa Taylor:

So what are the components of that online presence that you teach people to do?

Dr. Adam Gower:

Thought you’d never ask. Let’s see, there are several key components. The first is, on your homepage — I’ll run through these very briefly — the first thing on your homepage, you have to have a very compelling, aspirational tagline. You have to keep in mind what it is that … you have to address your prospect’s, the conversation that your prospect is having in their own mind and the conversation they’re having in their own mind when they land on your website. There’s only one thing they’re thinking about: “What’s in it for me?” It’s the only thing. So whatever you have at the top of your homepage on what’s called a hero image, right at the top, has to grab them, has to answer that question. “Something cool is in it for you on this website.” That’s the first thing; you have to directly speak to that conversation in their mind.

And then immediately beneath that you’ve got to have an “opportunity.” Give them an opportunity to have that question answered in more detail with something like a button that says “Learn More: — I’m oversimplifying — but a button that says “Learn More” that immediately requests two things of your prospects: their first name and their email address. This is critical. And this, again, this is a 50,000-foot overview; obviously there’s more layers to this. As soon as they give you their name and email address, because you’ve inspired them to understand that you’ve got something they want …Oh, and by the way, think about this, everybody on this call, if you are a sponsor, if you’re a syndicator, you have what everybody wants. It should be the easiest sell in the world because what you are offering is more money, passive income and wealth generation. Everybody wants that; you’ve got what everybody wants.

Kim Lisa Taylor:

Wait, say that again, say that again. More money…

Dr. Adam Gower:

If I said to you, “Kim, here, let me give you passive income and double your money” — or whatever, I’m making these numbers up — and you had no doubt at all in who I was, if there was no such thing as distrust, if you trusted me implicitly, you’d say “Great. That’s all I ever want. Perfect. I’ll give you all my money. Here it is.” But the barrier is everybody, all your prospects, they are suspicious. You’ve got what they want. It is your job to help them trust you. And that’s the key. That’s the key. You’ve got what they want. You’ve got to help them come to know, like and trust you and you want to do it remotely. You don’t have to do that in person anymore.

So you got to have a tagline on your website that says, “here’s why you should trust. Here’s what I’ve got for you. It’s really cool. You’re going to love it.”

There’s a “Learn More” button that gets their name and email address. And then the next thing that happens is: Boom; as soon as they send you their first name and email address, you then follow up with automated emails that give them value. Boom, boom, boom. … You then send out three or four emails in a sequence, all automated, that provide value. Now what you’re doing is you are building a relationship or you are establishing a relationship with your prospect, completely automated.

So those four emails are what I call an indoctrination sequence. Some people call them a welcome sequence. This is how you now establish a relationship with your prospects. That at the highest level is the most important thing on your website. Now, of course, you’ve got to have educational content and your lead-generation forms need to be embedded on those pages. And then once you have all of that, what you then do is you push this same content out onto social media, and guess what? You automate that as well. So now what happens is that somebody does a piece of research. You show up on Kim’s show like me. In fact, let me get everybody to do this now. You can all multitask. Run “Adam Gower crowdfunding” on Google and see how many pages deep you have to go on Google before you find somebody other than me. “Adam Gower crowdfunding” or “Adam Gower syndication.”

See how far. It’s probably five or six pages. That is ultra-high credibility, all modesty aside. You can do the same thing. When somebody researches you online, your LinkedIn profile’s going to be the first thing that shows up. So what you do on your LinkedIn profile is you create essentially a  facsimile of your website on LinkedIn and on Twitter and on Facebook. And if you can do videos, you do YouTube as well. So now when somebody researches you, which they will do, they’re going to find you everywhere. And that is what builds credibility. That is — and to answer specifically your point — that is what positions you as an authority in the industry, you become seen as being an authority. You don’t go out necessarily trying to be an authority, but by taking action and developing a presence online, you become recognized as an authority who can be trusted. So when you speak to some for the first time, they already want to invest with you.

Kim Lisa Taylor:

That’s fantastic. Of course, as you’re saying that, I’m thinking, “Oh, do we have these things? Do I need to pay you thousands and thousands of dollars to do that?”

Dr. Adam Gower:

Well, no, actually, I mean you did. I wasn’t sure if you said I could, if I said I could pitch, I’ve got a $7 pitch at the end, I’ll tell you how you can find it all in $7. It’s the easiest thing, don’t worry.

Kim Lisa Taylor:

What are the main mistakes that people do make when they’re raising money online?

Dr. Adam Gower:

When they don’t do that; that’s their main mistake.

I think most people aren’t even aware of it. It’s so brand new. Look, you never needed it. Here’s the thing. If you just cast your mind back to pre 506(c), pre-crowdfunding or pre-online syndication … you had to engage people personally. You had to meet them in person … 506(b), you had to have an existing relationship. So you had to develop a relationship; you could not do it online in that in that world. And you didn’t need anything (online) because you were doing it all in person. You could have a website that had nothing on it basically, because you were doing it all in person. …

So (now) everybody, yeah, everybody has a website, potentially has a website. We have companies that have billions of dollars under management who have been doing it for multi-generations who have the worst websites you can imagine because you never actually needed one.

So the biggest mistake people make is I think, I should probably say (fail to) mind-shift. It’s this appreciation that when you leverage the internet, you just have to do things differently.

Another big mistake is not realizing being intimidated going in: “I don’t know how to do this. It’s overwhelming. I don’t know what I would write. I don’t know how to write. I can’t write. I don’t like video. I don’t know how to do my words” — all this overwhelm that you get.

But just think about this: You only need to do it once. Once you build the machine, it just runs. How long have you had a website? Years and years and years. Probably never edited the thing. Well it’s the same. Once you build the machine, it just runs. It becomes an asset to your company. So the biggest mistake is getting over the hurdle from “I don’t know how to do it, I don’t know what to do or where to start” to “Okay, I’m going to make a concerted effort to build this thing out.” And then once it’s built, boom! You’ve got something that now puts you ahead of the competition because there’s very few people doing it.

Kim Lisa Taylor:

And if any of you are thinking about doing a Regulation A+ offering, which is not an exemption that we talked about, it’s actually a public company — but some of you may have heard the name Grant Cardone and you may have received his emails in the past. And he’s had a Reg A+ offering. And the reason that he was so successful with his Regulation A+ offering is because he set up a marketing machine that would … anybody that expressed any interest would continually get information from him adding to his credibility, making new offers, things like that. So if you’re at all thinking about doing Reg A+ plus offering, this is a necessary component because that allows you to raise up to $75 million in a 12-month period — and a rolling 12-month period.

So you can continue your company on forever. But for Rule 506(c) offerings, I don’t think people think of it in the same way. I think they just think, “Oh, well that allows me to advertise and I can put up a website and anybody can invest,” but they don’t think about this next component of how are you going to engage with them? How are you going to establish that credibility? How are you going to keep them interested, so they’re still around when you got a deal? And I think that’s what your program does.

Dr. Adam Gower:

Well, exactly. It’s marketing. I mean, if you do a Reg A now you’re going after non-accredited investors as well. Your minimum is likely to be much smaller. So you need vastly more people to actually fill out your offering, which means that you have … basically a Reg A is what is colloquially known in the trade as a mini IPO, just a downshift. It’s an easier thing. Kim will tell you all the details, but basically it’s an IPO, small-scale IPO. And that means you got to advertise … it’s no good doing a Reg A and putting all the dots together and then sitting there. But now what? You’ve got all your docs, you sent all them and now what you expect people to just come streaming towards you with their wallets open. It doesn’t work like that. Now you’ve got to go out and go to market, you got to do advertising and you got to have a website that captures those leads. There’s no …

Kim Lisa Taylor:

My best analogy for this — do you remember the movie “Field of Dreams” with Kevin Costner?

Dr. Adam Gower:

Yes. Build it and they will come.

Kim Lisa Taylor:

And they will come.

Dr. Adam Gower:

Doesn’t work that way. Unfortunately. No, only in Hollywood.

Kim Lisa Taylor:

Well, maybe the ghost investors will come.

Dr. Adam Gower:

Yes. We don’t want them.

Kim Lisa Taylor:

They don’t actually have any money.

Dr. Adam Gower:

No, they have ghost money, unfortunately.

Kim Lisa Taylor:

I told you this would be funny. Okay. All right. So if somebody sets up all these systems, how quickly have you seen somebody raise $5 million in equity?

Dr. Adam Gower:

Yeah, that’s a super question. I was invited to a conference where this topic was “How to Raise $5 million in 30 Days.” How do you raise $5 million in 30 days? I’ll tell you exact how to do that right now. This is the ultimate answer to that question. If you want to raise $5 million in 30 days, start 12 months ago. That’s how you do it. You just got to build it, but then you can raise $5 million in 30 days. If you need to raise $5 million today, because you’re in escrow on a deal, then you’re SOL — pardon the expression. But if you build it and if you spend three months … you can spend 90 days. For example, go through our syndicator program. If you work and put it all together, in 90 days you will be positioned to potentially raising whatever, $5 million, in 30 days. I’m not sure I could make any promises.

Your deal has to work. You got to have the right background. You got to have the the right docs. There’s a lot of other things. You’ve got to have the right offering. Otherwise nobody will buy or invest with you, but you could essentially, you will have the system that you need to be able to put your best foot forward.

Kim Lisa Taylor:

So what about a newsletter? Should we be advising our clients that they should set up a newsletter?

Dr. Adam Gower:

So communication… What number are we up to, by the way, on the questions?

Kim Lisa Taylor:

I think we’re on number seven. Yeah. Well seven, but number one was intros.

Dr. Adam Gower:

Okay. And if anyone has any questions, they should send them in. They help both Kim and me out. I can talk for hours ,by the way…

Kim Lisa Taylor:

In fact, this is a good time to mention (that) you can ask a question in the Q&A, you can ask a question in the chat and then we’re going, in about five minutes, we’re going give you time to answer those questions.

Dr. Adam Gower:

Okay. Ask me anything, thing. So the key to success is communication. That’s absolutely critical. So first you got to start building your list. That everything that I just described, proper website, lead generation forms, and a good social media presence that will start bringing traffic to you. People will sign up. As soon as they sign up, you’re going to start communicating right away with a sequence of emails. That are a high value, a value-add for your prospects and not pitches at all. Add value. You’re going to teach them something of value about real estate investing that is specifically in your field of expertise, obviously. And then once you’ve done that, then you start, then you have to continue communicating. And the way you do that is through a newsletter.

Again, educational newsletter. Don’t be sending out, send me money emails all the time. You want to be educating. And we have a weekly newsletter that is incredibly popular. And I have a couple of blocks on that where I think I pitch my books on it or something. I’m not really sure at the bottom of it, but it’s exclusively educational. And so we just put one out yesterday. That was a podcast I did with John Chang who’s Head of Research at Marcus and Millichap …

Kim Lisa Taylor:

I just met him.

Dr. Adam Gower:

Oh, did you really? John Chang. He’s fascinating guy.

Kim Lisa Taylor:

I did meet him. Yeah, actually had some drinks with him. He was a nice guy.

Dr. Adam Gower:

Yeah. He’s very, very bright and very articulate and energetic. So it’s a very good podcast and it’s very timely. So I sent out an email, anyway to my newsletter (database) yesterday saying, “Hey, got to listen to this podcast. Next week, it could be irrelevant because the world will have changed. So listen to it this week; I help you prepare” basically. And then I have a bunch of other stuff on my newsletter. So my newsletter is a slightly different angle. But for sponsors, for issuers who are trying to raise money, you want to be sending out an email at minimum once a month. At maximum once a week; do not go more than once a week. And ideally, once every two weeks. I find once every two weeks is best because then you’re not constantly scrambling for something to talk about.

Now, the other thing that you want to do with your newsletter, don’t put all the good stuff in the newsletter. Use the newsletter as a teaser and always include a call to action. In fact, in everything that you do, you want to have a call to action. And a call to action is: “Here’s something cool. Click here to learn more” basically. So when you post on social media, always include a link back to your website. Find a page on your website. “Here’s a cool article on the IRR or on Ukraine crisis or whatever … impact of inflation on real estate; this is one of the findings. This is one of our opinions. Click here to learn more, read the article.”

Always give people an opportunity to take another step in their relationship, too. So when somebody lands on an article on your website, inside that you want to have a call to action that says “Sign up for my newsletter.” Then when you send out a newsletter that should also have a call to action: “Here’s something really cool that we just learned about: the impact of — just picking the same topic because it’s top of mind, for everybody at the moment — the potential impact of a 200-basis-point increase in interest rates —  gasp! — before the end of the year. That is staggering, if you think about that. So over double where we are today, what is the impact to that in commercial real estate, boom, “Click here to learn more,” take them to an article. Or what you could also do: you could do a short video. We’ve had clients do short videos. That are pretty cool as well, where you turn on Zoom, and you say, “Here are my thoughts.” Or you can even use your phone. It really doesn’t take much these days. You’ve got devices all over the place. Post something on your website and in your newsletter: “Here’s some thoughts I had about the impact of interest rates” and direct people. And on that page, “Sign up for my newsletter.” Got to have a CTA there as well.

Kim Lisa Taylor:

Let’s go on. We’ve got a couple more things I want to cover before we go to Q&A, but I want to get to it pretty quickly. So email marketing — we kind of covered that already or is there anything else you think we need to say about that?

Dr. Adam Gower:

Yes, I will give you the best advice. The biggest mistake that sponsors make. Never, ever buy a list. Period. Trust me, I’m a doctor. Don’t do it. You will devastate your deliverability. You will not be able to get emails through. You will be classified as a spammer immediately when you send out your first email and you will not get emails through to your best investors, period. Do not buy and blast to email lists. Take the time to encourage people to opt into your list and communicate with them. This is actually a very big topic. It’s probably the biggest mistake that everybody makes. They think that buying a list is a silver bullet. It is the biggest mistake you can make.

Seriously ,you go out and buy a list. What, you think you’re the first person that’s bought that list? There are thousands of people that came before you and they’ve all blasted away. So that same exact list.

And guess what? Those lists are seeded with what are called spam bots, honey pots, email addresses that are specifically engineered to identify you as a spammer, number one. Number two, even if they weren’t, these recipients have received thousands of unsolicited emails already. What, you think you can stand out against those? Don’t do it. You will be labeled a spammer and it’s one of the hardest things we have to do for our clients is unwrap the mess they’ve made buying and blasting to lists. It takes months. And if you’ve ever had anyone say your email went to spam, then you got to clean up your lists. You need to change your practices.

Kim Lisa Taylor:

I would also say make it easy for people to unsubscribe because if you don’t make it easy-peasy for people to unsubscribe, then they will push you to junk, which actually then hurts you.

Dr. Adam Gower:

Yeah. Well that’s it. And don’t be bothered if somebody unsubscribes; it’s okay if they unsubscribe. I know people that get all panicky. They look to see who. They take it personally. Don’t worry about it. Think about this. Here’s a great way of contextualizing this. Cast your mind back to high school math. Sorry to do that. You remember the bell curve, we called it the normal curve in England. The bell curve down the middle of the average, those people could take or leave you. One way or the other you’re on their list. They’re on your list. Whatever. They’re never really going to engage. On the far left, the more standard deviations you go to the left, the more people think you are a complete idiot. They are the people that send you FU emails. The nasty set that think you’re an idiot, hates everything you do. Every single one of those way on the other side, that 99, whatever 99 percentile, one percentile of people on the other side of that curve, they love you. They will read everything you produce. They will watch every video. They will eat everything up and they will invest. And they are a tiny proportion of the entire world that you will be communicating with online. And they are the ones who will change your life. They are the ones who will invest.

Kim Lisa Taylor:

One last question. And then we’re going to go to Q&A. So is paid advertising effective?

Dr. Adam Gower:

Yes, extremely. We have run campaigns for ourselves and we run campaigns for clients. Let me have a quick look and it is effective. However, it’s much better. It’s far more effective. You have 17 new accredited investors today. Past this, my website, past 30 days, 990. Now that’s not all paid advertising. That’s a lot of numbers. That’s a big number. That’s not all accredited, but that’s a lot of people building my list, all opting in. All opting but paid advertising is much more effective when you have a good mousetrap. In other words, if you’ve got a good website, a good social presence, because what’s going to happen is somebody’s going to see on facechat, Facebook, by the way, is the best one to advertise on. Don’t even bother with anything else.

Facebook’s the only way to go. Love them or hate them. That’s how you find investors. The first thing somebody’s going to do is they’re going to research you. They’re going to see Janesyndicator.com. And they’re going to look you up and they’ll look you up on LinkedIn and they’ll look you up on Twitter or your Facebook page or wherever they are. And if there isn’t depth and substance, it’s going to be harder for you to convert that prospect into actually investing. You’re going to have to really handhold them.

Kim Lisa Taylor:

I see that. What kind of a budget would you recommend for someone just starting out for paid ads?

Dr. Adam Gower:

Yeah, so I’ll tell you what it costs. I’ll just give you actual numbers. All right. So then you can decide what budget you want. You can’t spend $10 a day; you’ve got be investing, it’s why you need to build your mousetrap first. If you were to talk to any of the major crowdfunding platforms, they will tell you, depending on who you’re talking to, $200 and up to acquire one accredited investor lead. So that’s somebody that says, first name; last name; yes, I’m accredited. Those three fields. It’s going to cost you between $200 and $400.

We run campaigns for clients with these platforms that we build for them, or they’ve built themselves — and I just want to be very, very clear: these are not normal results. Just to be clear, these are on market. Market is $200 to $400 per lead, but we are generating leads at under … I think the last one I looked at, we got one client we’re delivering at $30, under $40 — $39.91, I think yesterday, per lead.

And I will tell you I’ll have a quick look at my cost per lead. And we’re running a campaign, we’re testing some new stuff at the moment. I’ll just have a quick look at this, here we are. So for the April 5th webinar, with the leaders of the top four crowdfunding platforms, my cost per lead accredited is $20 —  $20 and 11 cents. So one tenth of what the crowdfunding platforms spend.

By the way, I will tell you that one of the biggest problems that our clients have when we run campaigns for them is handling the volume of investors. That’s the challenge they have, is how do we handle this? I mean, we build automated systems, but they like to do phone calls and they get a bit overwhelmed and have to hire new people to handle it. We deliver, I think one of our clients with up to 1,400 accredited investors in just four months, new. Core brand new.

Kim Lisa Taylor:

Tell us about your offer and how people can reach you.

Dr. Adam Gower:

So the best way to reach me of course is just go to go GowerCrowd.com and ideally just subscribe, hit the button top right. It’s totally free. Just get on my email list for the newsletter, which is educational. If you want, I mentioned this $7 thing. Can I put it in the chat?

Kim Lisa Taylor:

Yeah, go ahead.

Dr. Adam Gower:

Is that okay? So here’s a $7 book that really dives deep into the best practices for a website. I basically skinned out the most important things that you need. It comes with a training. There’s a free training as well, where I actually walk you through everything. It’s really cool. I used a really cool tool to do the training for this thing, 72 minutes. So it’s over an hour. It’s really cool. It’s like, I draw on the screen and you can see my writing. I got this tool from South Korea of all places, really difficult to install. Those would be the two places. And then can I also, do you mind if I just put in a link to this April 5th webinar?

Kim Lisa Taylor:

No, go ahead.

Dr. Adam Gower:

Is that okay? So this is with … just check this out. I’m interviewing, well, not interviewing, I’m hosting Tore Steen, founder of CrowdStreet; Jilliene Helman, founder of RealtyMogul; Adam Hooper, founder of RealCrowd; and Charles Clinton, founder of EquityMultiple. April the 5th is the 10th anniversary of the passing of the JOBS Act in 2012 and basically I’m asking everybody who signs up, what questions have you got? Because I’m still scratching my head. What should I ask these eminent people in the industry? And what I’d most like to do is to ask your questions. So if you sign up for that, you’ll get an email immediately from me saying, “What questions do you want to ask?” All automated, of course. And it’s a Zoom call. And then we’ve got also review how this thing worked on Facebook, Kim; we’ve got to see how many millions of people are watching. We don’t know, do we, right now?

Kim Lisa Taylor:

No, we don’t know.

Dr. Adam Gower:

Burning up the internet.

Kim Lisa Taylor:

That’s right. Okay. So let’s just kind of go through what questions we might have. Hey Art. Thanks for saying, “Hey, Google ‘Kim Lisa Taylor’ and she dominates eight pages.” I don’t know; maybe I could do better. Right, Adam?

Dr. Adam Gower:

That’s a good one. Yeah. Try yourself as well. Very cool.

Kim Lisa Taylor:

“Best advice ever.” Let’s see. Did anybody else have any questions? Go ahead and put it in the Q&A or in the chat. We’re monitoring both of those. Let’s see. David says, “Please consider including the top five portals” and I’m not sure what he’s talking about there.

Dr. Adam Gower:

Well, the top five websites, the top five crowdfunding websites, the top four are in that 10-year anniversary link. And you can hear directly from those founders on April 5th. And then the other one that’s commonly mistaken as being for the general public is Fundrise. They’re enormously successful. Ben Miller is a good guy, and I communicate with him frequently. He crowdfund his deals; he does Reg As, but they do their own deals, whereas the four that are in the webinar on April the 5th, they bring in sponsors, outside sponsors, and they promote outside sponsors. That’s the distinction between those two, that’s why Fundrise isn’t part of it.

Kim Lisa Taylor:

So, okay. Kenneth asks, “Shat was the name of the $7 book?”

Dr. Adam Gower:

It’s called “Syndicate” and the link is in the chat. …

It is only $7 and it’s satisfaction-guaranteed. If you don’t like it, I’ll send you $7 back, but it is probably the highest value. It’s probably the best book I’ve written, this one, “Syndicate.” You’re going to get an electronic version of it when you buy it online. And it comes with that 72 minutes of training. It really is the mother lode of effort. If you follow that stuff, you will move the needle substantially. I mean, you really will. These are the key lessons that you really need to do.

Kim Lisa Taylor:

So Bob, asks, “There’s some crowdfunders who will white-label your deals and have hundreds of investors. Are they okay?”

Dr. Adam Gower:

So this is a legal question, Kim. What I think they’re asking is somebody going out, promoting your deal and being paid to do it? Why don’t you mention why?

Kim Lisa Taylor:

Well, I’m not really sure what he means by the white-label crowdfunders. I mean, I know about CrowdStreet and RealCrowd and how they operate and the way that they operate is that you pay a marketing fee to them and then they push your deal out to their list of accredited investors. And they’ve spent lots and lots of money cultivating lists of accredited investors, but that doesn’t come without a cost. First of all, they’re very selective about who they take. So they’re only taking the top 1% or 2%, even less than 5% of the people that come to them, will they even consider doing, allowing them to put their stuff on their platform. And then also I have had several clients that have used CrowdStreet in the past and their recent experience was that CrowdStreet was driving some terms for them that they couldn’t use.

So they ended up turning away from it, saying “We can’t meet the terms that they’re requesting us to do. So we’re going to have to do it on our own.” So I’m not saying there’s anything bad about CrowdStreet doing that; you just have to understand that doesn’t come without a cost that you may have to modify your terms to suit their platform. And you also have to be able to pass their credibility test. And it was an ever-evolving number. As the crowdfunding industry matures, they look for people with more and more completed deals, start-to-finish, dollar amounts that were palatable for their investors, I guess. And then the other thing that is a little different is that they wanted $25,000 minimums whereas a lot of our clients, when they’re doing their own offerings, will do $50,000 minimums.

So you get twice as many smaller investors and they don’t know you, so they are a little more suspicious of you and perhaps a little more demanding. And that was the experience my clients had was the investors that they got I guess they weren’t as trusting as the people that they took the time to develop with the relationships with on their own.

Dr. Adam Gower:

Yeah. And the other thing is that they only take, like I say, it’s actually, I think it’s 5% of people who come to them. So there’s 95% of people don’t get on the platforms. I mean, it’s not easy to qualify.

Just one other thought about Facebook marketing. You did ask about that. Facebook advertising. So one way that we help some of our clients is we run webinars, master classes. These are training. They’re strictly educational. You can transition to a pitch at the end a little bit, kind of like this conversation, strictly educational. And we advertise those on Facebook and we guarantee 100 accredited investors will sign up. So you are guaranteed 100 accredited investors. So if you’re interested in that, I’d be happy to talk to you. We are somewhat selective on that. You got to have substance. You have to have some experience and background and you’ve got to be able to do a webinar. It’s not so easy to do.

Kim Lisa Taylor:

I know there’s some people on the call that are thinking, “Yeah, but what if I don’t have that experience?” Well, you can leverage off other people’s experience. You need a team with people that have the experience that you want in order to be able to propel your business forward if you don’t have any experience, otherwise you need to build your track record and your experience by doing 506(b) offerings with your family and friends who already know, like, and trust you and who will invest with you before you’ve developed a track record. But in order to be able to advertise and bring in investors that don’t know you, you have to survive the very first question they’re going to ask you, which is “How many of these have you done before?”

And so until you can answer that question, you can answer that by saying, “Well our team has collectively done this.” Okay. And you just need to make sure that’s a true statement because otherwise that would be fraud.

David makes a cautionary statement here: “Be careful of unregistered finders. The SEC is looking to bring them into the light. The SEC is also looking at some of these crowdfunding platforms and trying to impose some regulations on them. There’s some proposed rules right now that would basically affect anybody who is an intermediary between matching investors with deals and starting to put some regulatory requirements on them.” So that could be coming. So anyway, there’s a lot going on here, but yes, illegal finders is a big ramp-up problem in the industry. And I do think, what I’ve seen from this administration and the SEC and this administration is that they are much more regulatory-focused and they’re starting to spotlight a lot of different issues that are ultimately going to make their way into this industry.

Dr. Adam Gower:

Let me answer Adam’s question. Can I answer Adam’s question? Just sign up as developer, Adam, and you will get communication from me about all the training that we offer to developers. Yeah. So we do narrow it. By the way, if you do have a dropdown list to segment your audience, never put “other.” Don’t use “other” as an option, unless you have a fill-in box that’s mandatory. Otherwise you’ll end up with “others” and it won’t get you anywhere.

Kim Lisa Taylor:

Okay. Sam, asked a question that I’m just going to give one answer to, and then we’re ready to go. “So if I’m a small investor, what are the best pathways I should do to build up my profile, public resume, to syndicate a larger partner complex?” I think you go back and you listen to this podcast and you do everything that Adam said and you sign up for all of his programs and you’re probably going to be well on your way to doing that in about 12 months.

Dr. Adam Gower:

You’ll be on the pathway to it much sooner, but to really be effective, it does take time. You’ll be happy you did it in 12 months.

Kim Lisa Taylor:

All right, everybody. Thank you so much for joining. Dr. Gower, thank you so much for joining. Always entertaining, always educational.

Dr. Adam Gower:

Thanks for having me.

Kim Lisa Taylor:

And yes, I will look forward to our next conversation.

Dr. Adam Gower:

Let me know how this live Facebook thing, how many people… If anyone showed up, I’ll be interested to know. We were on for almost an hour. Be really interested to see how well that worked.

Kim Lisa Taylor:

Yeah. Sounds great. All right. Thanks so much. Bye.

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Are you ready to raise private capital?

At Syndication Attorneys LLC, we are committed to your success – book a consultation with one of our team members today!

Are you ready to raise private capital?

At Syndication Attorneys LLC, we are committed to your success – book a consultation with one of our team members today!

About Syndication Attorneys

We are NOT your stereotypical law firm. We don’t believe in simply taking your money, handing you a stack of technical, often-incomprehensible legal documents and then bidding you good luck and good-bye. At Syndication Attorneys PLLC, we are committed to your success – not just with the project at hand, but your continuing success in business and investing. We are your long-term legal team.

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