Edited transcript of the teleseminar, “Streamline Management of Your Investors”

With special guest Bar Mor of Agora

Originally broadcast on July 23, 2020

 

Listen to the teleseminar

 

Kim Lisa Taylor:

Welcome everyone to Syndication Attorneys, PLLC’s free monthly teleseminar. We talk on these monthly teleseminars about topics of interest to real estate syndicators with the opportunity for live questions and answers at the end of the call. I’m attorney Kim Lisa Taylor; also joining me on the call today is our special guest speaker whom I will introduce in a moment. Before we get started, please note that all of our calls 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 teleconference is of a general educational nature and should not be construed as legal advice. This is an audio-only conference. If we turn on our videos, it may slow down the feed and it will get choppy, so we’re just going to do this one as audio today

Today the topic is how to streamline management of your investors. And I want to introduce you to Bar Mor of Agora. Bar, tell us a little bit about yourself.

 

Bar Mor:

First of all, hi everyone. And Kim, thank you very much for having me. It’s a pleasure. I’m actually based now in Israel, in Tel Aviv. My background is both in tech and real estate. I served as a commander with the cyber intelligence unit in Israel in the military. And I worked in the tech space for a while and personally my family, they all are coming from the real estate side, they have a business where my father and I are working in the company. He’s the founder of a public real estate company in Israel, building residential and commercial real estate all over the country.

And so, since an early age, I was always exposed to deep insights regarding the industry, and with that, its problems. And this is what actually brought me to search for ideas, pain points, and bring innovation to this field, and to develop basically Agora.

 

Kim Lisa Taylor:

Agora found me on the internet and we struck up a relationship about, I don’t know, several months ago. And I started talking about ways that we could streamline the syndication process, both for our clients and for theirs to try to make it a little more seamless. We are all working toward a solution where the documents would actually be generated through Agora’s platform and at least for those that want to participate in the platform. And we’ve come up with some reciprocal discounts for our respective clients that want to use both of our services, but we just wanted to talk to you about what that might look like and how that might work and how it could benefit you as a syndicator to have this kind of a platform.

I do want to tell you that Agora is not the only platform out there; there are other platforms. Some are better than others, some are very expensive. We just happened to really hit it off with Agora, and I liked the way that they were thinking really long-term, thinking about not just providing a place for your investors to be, but also providing a way to actually generate the syndication documents in an electronic format where you would have control of the offering process. So that’s a work in progress and we will get there eventually, and we will make announcements about that when that happens.

But for now, I just wanted to introduce you to Agora. They have offered a 20% discount on their rates to all of our syndication clients. So we just want you to be aware that if you’d like to check out their services, that you can do that. We’re not getting any additional benefit out of that other than the fact that eventually we’re going to be streamlining our processes through their system as well. But our traditional legal services will always be available to you no matter how you want to use them. But anyway, let’s go on and just start talking about the platform and how a platform can help. So, I guess, tell us a little bit, Bar, about how the platform can help people keep track of their investors.

 

Bar Mor:

Basically these days, many GPs and investment teams are still using Excel files and Outlook data in order to manage their most important assets and their investor base, and investor relations. But all of these CRM systems are generic and they’re not really suitable for these type of offerings. And what we’ve built in Agora, we’ve partnered with multiple real estate investment firms and funds. And basically we’ve developed a product which is designed especially for their needs, so the CRM functionality and industrial portal, or the document management, everything is completely suitable and designed especially for real estate syndication deals.

 

Kim Lisa Taylor:

So you can keep track of both prospective and current investors all on your platform, right? Like if somebody is just talking to somebody they’ve just met for the first time, then how would that help them keep track of those? Would it help them to keep track of those conversations?

 

Bar Mor:

Yes, definitely. So, from the system, you can both keep track on active investors and the potential leads, and for each one of them, you can also maintain and keep track of all the latest activity, whether these are phone calls, email conversations, meetings, and you can summarize them, catalog them in the system, and then revert back once needed. And you can also manage all the perspectives, who saw the deal, who saw the information and who opened the relevant information. It also helps you manage the compliance in this way.

 

Kim Lisa Taylor:

Yeah. And so any of you that have been around Syndication Attorneys for a while, and you’ve heard me speak, you know how important it is to document the relationships with your investors, if you want to do Regulation D, Rule 506(b) offerings. And so this is exactly the kind of record-keeping system that you would need to be able to do that. They have a built-in customer relations management software within their system. So that’s a great feature. I think that’s fantastic. And then also for your current investors, because you want to keep track of all the communications you’ve had with them for the time that they’re in a deal, but you also want to be able to keep track of showing them future opportunities because your best investors are your current investors and they may be investing with you in multiple deals.

That’s going to help us with the security’s compliance a lot. If you ever had to …were asked by a regulator to produce records showing how you developed a pre-existing substantive relationship with somebody, then you would have that system to be able to draw on and gather that information. And that would put you in a pretty good position with the securities regulators, if that was the issue. So what about like putting offering documents, status reports, tax forms? I mean, what if somebody wants to post a new offering on your platform, would they be able to select who that could be sent out to, or tell me a little bit about how that would work?

 

Bar Mor:

Of course. All the process is completely streamlined. A company can go and open a new project within the system, then they can choose if they want to share with all the investors or only some specific groups of investors. And they can put all the relevant data, the subscription agreement, the operating agreement, projections, everything in the system. And then the investor can easily do the entire commitment together with electronically signing the document through the system, so the entire fund-raising process is being automated. All the documents are saved in the right space, and you can also attach your law firm and all the documents sent directly to the law firm.

 

Kim Lisa Taylor:

That’s fantastic. And is there a way for people to actually sign documents within your system? Is that part of what’s coming in the future?

 

Bar Mor:

Yes, now we’re implementing integration with DocuSign, so the investor can electronically sign the documents. And also after concluding the offering and the need to manage it on day-to-day basis, all the distributions, the capital cost, the distribution of the sales, documents, everything is done, very streamlined, just dragging up the file just like in Google drive, and all the investors that have invested in this offering will easily get access to it, both in the portal and as an attachment to the emails to the ones that are not using the portal.

 

Kim Lisa Taylor:

Thank you, that’s great. OK, so what do you see just from your prior investing experience … what do you think are the key benefits of having some custom management platform?

 

Bar Mor:

I think there are multiple benefits of using the investment management software and these benefits might differ depending on the size of the company. From our experience working with small and midsize firms, first of all, is positioning in front of the investors. Investors are one of the biggest assets these companies have, and being well organized, and being more transparent, having all collateral accessible, including the investors and whatever they want, 24/7, especially in these uncertain times of today, I think it’s super important.

The second thing is, this provides better information management. So adding everything in one place, both in terms of the regulation and both in terms of reducing mistakes, creates a great basis for future days when you have multiple projects.

And the third thing is saving time, and the platform really significantly saves the time and effort of doing different multiple tasks, whether these are setting the Schedule K-1 tax support and generating the distribution reports, again, all the fund-raising automation. I think these are the three main benefits for using this type of software.

 

Kim Lisa Taylor:

So one of the objections that I’ve had to these software platforms before has been it takes a lot of time to input and maintain all of that data. What’s your experience with that?

 

Bar Mor:

I think the first platform in the early days, it might be that that was the case probably, but I think that as the market evolved, the companies, such as us, developed products that worked for you and not you working for the product. And so the product definitely saves time. You have the onboarding process, which is one-time onboarding, us taking all the Excel spreadsheets with information and onboarding that to the system. We do it for the client.

 

Kim Lisa Taylor:

So, if somebody comes to you that has a securities offering and says, “OK, we’re ready to engage your services. We’d like you to help set it up.” You guys will help set it up the first time?

 

Bar Mor:

Definitely, we will help them, we will set it up for them, We’ll get the Excels, we’ll walk with them in order to make sure that all the data is inserted correctly. Yes, this is a big part of our service.

 

Kim Lisa Taylor:

So that’s something different, because some of the ones that I’ve worked with in the past, they just showed you the demo and gave you the platform and said, “Here you go,” and you had to figure it out by yourself. So if you guys will help integrate all of that upfront, I think that’s a huge time-saver for potential clients of your platform.

So, what did people do before platforms? You said you came from the commercial real estate world. What were you doing before? How were you keeping track of things?

 

Bar Mor:

Yeah, so I worked, again, together with my father and our real estate company, it’s a public company building residential and commercial real estate all over the country. As a public company, I saw how important it is to always communicate with the investors. Our investors were mainly institutional ones. And it was on a weekly basis where we went and sat with them on a meetings and sent them updates.

Our CFO went to these types of meetings to do presentations and understood how important it is. I saw it in the public markets and there is software for that and there’s the regulator who’s binding you to do some sort of actions. And in the private world this is pretty much a mess, and this is why I identified these big needs, having more standardized workflows and ways to communicate with investors and to do these kind of tasks.

 

Kim Lisa Taylor:

Well, I just know from my own experience, even growing this law firm that we started out, we were keeping track of clients on Excel spreadsheets and we would have conversations with people that we weren’t writing down. And then we’d give somebody a quote and there was no way to go back and look for it or somebody else wouldn’t look for it and see what I had quoted, or something like that. It was just a mess. And I know that we lost a lot of potential clients because of that, because we didn’t have a way to keep track of those conversations and those contacts, or really to follow up with them. So I think that having this system in place for your investors is just going to be so invaluable. Is there a way, Bar, within your system to set up a mail campaign? Like you could automatically send things to people, is that part of it or not yet?

 

Bar Mor:

Of course it is. We have complete integration to Gmail and Outlook, and you can do an email marketing campaign. Now you can only do some basic email functionality, but we are continuing to develop it and add more functionality.

 

Kim Lisa Taylor:

That’s great. So we’ve talked about the discounts that you’re offering to Syndication Attorneys, PLLC’s clients, and that’s 20% off of your normal rates. So if anybody is interested, how would they schedule a demonstration with you?

 

Bar Mor:

It’s really easy. They can either go to Agora’s website and the link is www.AgoraReal.com, or they can go to your website Kim, www.SyndicationAttorneys.com, and there you have also the investor portal, and a tab, and just leave information. You have a “Request Demo” button and there’s also one on our website. We will reach out to interested parties directly. You can also reach me directly in my email, it’s Bar@AgoraReal.com.

 

Kim Lisa Taylor:

And we’ll make sure that that information is in the recording notes from this show, and we will be posting this on our website. But as Bar mentioned, we do have a page on our website that explains a little bit more about Agora’s platform and our integration with it. There is a schedule, a demo button right on our website. So if you go to SyndicationAttorneys.com, there’s a tab that says “Investor Platform.” That’s the one. And you can read more about Agora and a watch video and schedule your demo there.

I’ve always recommended that once you have more than two syndications, you definitely want to think about an investor management system. Even if you have one now, these are starting to become so much more affordable, that I think it would be well worth your time to explore this even for your first one.

Let me ask you this, Bar: if somebody doesn’t have a deal right now, but they just want to use this for keeping track of their prospective investors, would this be a good use of your platform, or would you suggest they wait until they have a deal?

 

Bar Mor:

I would suggest they wait until they have a deal, just because again, I think the platform is making makes much more sense when you have a deal. But yeah, as you mentioned, I think that even one deal, you need to have the system for the CRM functionality and for best practice.

 

Kim Lisa Taylor:

That’s right. So we are going to go to Q-and-A. So if anybody has a question for Bar or for me, we’re happy to take calls either in the chat or you can raise your hand. Before we do that, I want to give out our contact information. Our website is SyndicationAttorneys.com. We have added a lot of stuff to our website. If any of you have not been there recently, you should check it out. Our library has an extensive list of one- to two-page articles about all different aspects of syndication.

All of our previously recorded teleseminars for the last three years are recorded and posted on our website so you can listen to them forever. We also have frequently asked questions. So whenever somebody asks me a question that requires a long answer, I usually write it out and I post it in the frequently asked questions. I’m very frequently updating these things. There is a way that you can actually sign up to be notified when there are updates to our website.

And if you don’t already have a digital copy of my book, you can get a free copy of it at our website. So there’s a tab that’s for the free book. We also have an affiliated website called InvestorMarketingMaterials.com, so you can get to that as well from our website. So InvestorMarketingMaterials.com is where we can help you create marketing materials using our professional editors and graphic designers to help create those things for you so that you can prepare yourself as a professional syndication company.

So there’s all kinds of stuff that you can get on there. We can help you set up a website, investment summary, corporate brochure, pitch deck, an investor presentation. If you want to give an educational presentation to somebody, we can help you pick a topic and create that. We can also help you create a white paper that you can put on your website that you can give away for free. So we’ll give you one that you can put your own label on, and we have several different topics to choose from, or we could create a new one for you with our professional editors. There is a link to the Agora platform.

Also, if you’re doing a Rule 506(c) offering, and you have to have your investors get verified, then we do have a tab at our site. We’ve affiliated with another company called Early IQ that provides the investor verifications. The fee is $49 or $59, so it’s very inexpensive, as well as something that you may not be aware of, and that is that if you’re bringing in other people to your management team, there is in Reg D, Rule 506, a requirement that you don’t allow any bad actors into your management team.

And the people that this applies to is any officer, director, employee, or promoter of your offering, as well as any investor who acquires more than 20% of any class of voting interests. And the requirement is that you have to make an inquiry into the backgrounds of those people to make sure that they don’t have some bad things in their past that would prohibit them from participating in your offering in that capacity. So if you’re bringing in people into your management team who are going to bring you investors or deals or something like that, you have an obligation to vet those people. And so there’s a way that you can do that at our “get verified” page.

There’s also a way for you to verify the identity of your investors. So this particularly is very important if you’re using non-U.S. investors, and technically you should be doing it on all of your investors to help you prevent money-laundering or getting involved in something that could get you in trouble. So just check out our website frequently. It’s constantly updating. I will tell you that we are just in the process of adding a lot of different services to what we do, and we’re going to be posting some information about that very soon.

So I’m going to go to the Q-and-A right now. All right, so somebody, asks and it’s an anonymous attendee, so hello, Anonymous. Let’s see: “Is it possible to create pre-existing substantive relationships only on the platform? If so, how does it work?”

OK, so I’m going to answer that first and then I’ll pass it off to Bar. So your pre-existing substantive relationship occurs when you have enough information about somebody to know whether they’re accredited or not accredited. And if they’re not accredited, if they’re sophisticated and how, and whether or not their financial goals are suitable and compatible with your investment opportunity.

If you want to know more about that process, then I would send you to our website library in the articles, there was an article called “Determining Investor Suitability” that describes what the SEC believes is necessary to establish a substantive, pre-existing relationship. And there’s even a proposed list of questions that you can access that will help you craft those conversations with your investors. So just because you’ve known somebody for a long time, you met him or her a long time ago at a conference, you’ve seen them at a bunch of other conferences, doesn’t mean you have the right relationship to ask them to invest with you.

Even your neighbor, who you might have known for 10 or 15 years, if you’ve never had a conversation with them about their finances, you don’t have the right relationship to call it a pre-existing substantive relationship. So when you’re having those calls, the thing that the SEC said is, not only do you have to know that information, but you have to have a record-keeping system in order to keep track of it and to document who you talked to, when you talked to them, and what you talked about, and what the answers to your questions were. So you need to have a way to do that. And I think, Bar, that would be a good use of your platform, right?

 

Bar Mor:

Yes, definitely. So, as you mentioned, the platform doesn’t completely replace the human interaction. It’s just supposed to empower both the investor and the guy in the company and give you the right tools to again, perform the job better and make sure that they are staying in compliance. So you can definitely manage all the interaction and keep track of it on our system.

 

Kim Lisa Taylor:

Do you have an information page on your platform where you can post articles or things like that, that would be useful to your clients?

 

Bar Mor:

Of course. On the dashboard of the investor profile, you have a place where the company can post different kinds of posts, share photos, documents, videos, etc.

 

Kim Lisa Taylor:

So maybe we should figure out a way to integrate this suitability questionnaire into your platform. I think that would be something that would be really helpful for people that want to do a Rule 506(b) offering. So we can talk about that in the future. Well, so thank you so much, Anonymous, for that question. If you have a follow-up question, please let us know.

So David asks, “What kind of costs are associated with this, upfront costs, monthly and transaction costs?”

 

Bar Mor:

The costs are both for implementation, which is depending on the complexity and the number of projects and so on, and then a yearly subscription to use the software. And the yearly subscription, again, it’s only based on the number of projects. So you can have as many users and investors as you would like. And we don’t have any transactional costs. So it’s just the first implementation and then the yearly subscription. And with 20 percent discount to Kim’s clients, I think it’s very much affordable. We can talk more in-depth in a personal conversation.

 

Kim Lisa Taylor:

So Bar, do you feel like there’s anything we didn’t cover that we should talk about?

 

Bar Mor:

No, I think we got most of the things covered, so it was a great call. It was great to be here and to speak in front of this great audience. Anything from your side, Kim?

 

Kim Lisa Taylor:

Yeah. I’m looking forward to our relationship, and I hope that this is helpful for some of our clients because our goal in these calls and all the things that we do is to help you become a successful syndicator, and to further your business and to help it grow the way that you dream and want it to grow. And that’s our commitment to you, is that we want to help you create a successful investment company. So just want to let everybody know in case you don’t know, if you’re not already a client, we are having clients-only Masterminds now.

We’re doing those right now, once a week. We do them once a week on Fridays at noon Eastern Time. We’re not going to be doing them this week or next, just because I’m going to be out of the office, but then we will resume them in the second week of August. So if anybody wants to be part of those clients-only Masterminds, then if you’re not already a client, you have to become one, and we can help you do that with our Pre-Syndication Retainer. Just in case anybody doesn’t know what that is, it’s $1000, it gives you up to three hours of one-on-one legal advice with me usually.

And there’s no expiration date on that. We also will give you an investor marketing plan template, and investor relations blueprint, and then you’ll get access to our clients-only Masterminds. And then when you do your first syndication, we will give you a discount equal to or greater than the thousand dollars that you paid for that Pre-Syndication Retainer. So it’s really a no-risk offer for you to become a client of the firm and for us to be able to interact with you and answer all of your questions as you grow your business. So just keep that in mind. If anybody wants any information about that, please go ahead and you can shoot me an email directly at Kim@SyndicationAttorneys.com. And Bar, why don’t you go ahead and just give out your email address again.

 

Bar Mor:

Sure. So it’s Bar@AgoraReal.com.

 

Kim Lisa Taylor:

OK, very good. All right, thank you, everybody, for coming today. I hope this information was helpful and useful, and we look forward to having all of you as clients very, very soon. Thank you so much.

 

Bar Mor:

Thank you very much.

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