August 9, 2016

Great Social Media Etiquette is Money in the Bank

People frequently ask how I have such a significant social media following and how I engage with them.

I have put together a few thoughts to help my friends and colleagues be more successful on-line. I don’t speak or consult on this topic, but it was recently reported that my LinkedIn network is the #70 largest network on the planet.

Having great “offline” networking skills doesn’t come easy but we have learned through trial and error – or because other people helped us be more effective. But online, most people lack the same level of social networking skills, and even fewer succeed in generating any material amount of leads for their offline businesses.

To me, there is some etiquette that seems to work. I am no Emily Post, but I have a few suggestions I hope will create more mutual support and better business success for each of us.

The old adage is that the fuel of networking is “giving”.

Start giving if you want to receive – and by the way, you have to give before you get. Here are some ideas so we can help each other make a huge difference in all of our social media performance – and on our ability to monetize it too. You don’t have to do all of these to be helpful – but the more you do and the more you give, the more you are likely to receive.

  1. On Facebook, “like” everything unless you really don’t like it. Think of the word “like” as “acknowledge” instead. Add comments if appropriate. More “likes” move posts higher in the timeline area. Did you ever give a talk, ask for questions, and there were none? Same feeling when you get almost no “likes”. Plus it helps me to remember what posts I have already read which saves time in the future. If 50 people see a post, 45+ should “acknowledge” it.
  2. Read and review the books and other assets of your colleagues. Post your thoughts about them for others to consider on Facebook and Amazon (among other places). Your third party testimonial is very valuable.
  3. Retweet. Retweet. Retweet.
  4. Share and repost articles on LinkedIn.
  5. “Like” articles that you see on LinkedIn and make comments when appropriate. Sharing is even better – and by the way, I find that sharing on LinkedIn increases my exposure in many valuable ways.
  6. Follow others on Twitter with the expectation that they will follow you.
  7. Connect on LinkedIn – never IDK (i.e. click “I don’t know” the person). Networking is a game of leapfrog. It’s not about the person connecting to you – it’s about who is in their network that might be helpful to you.
  8. Give recommendations on LinkedIn if appropriate. This is a great place to put them because they are here permanently. They can be used by the recipient for multiple other applications for example because LinkedIn is building a social media engine to compete with Klout.
  9. All reviews should be positive – not necessarily balanced. If you are not trained as a professional journalist, don’t pretend to be one. And if you don’t have something nice to say, ask your mom what to do.
  10. Nobody wants to toot their own horn – and besides, a testimonial from a third person is so much better than self-promotion. Give as many 3rd party insights as is appropriate. It helps others to get to know your colleague and it gives them a very good impression of you.
  11. If you are an expert and you know how to do something well, share that with others. Don’t sell to your colleagues. Networking and selling don’t mix. Give your expertise freely (to peers not clients) which will boost your status as an expert in your field. We are all here to learn and teach, network and grow. Contribute to that process as best as you can. I am an expert (not a broker) in the money business (hedge funds, venture capital, alternative assets and raising capital). What do you want to know? I’ll happily share.

Let’s make these actions habits and you will be pleasantly surprised by what comes back to you.

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June 24, 2016

Dealing with the Medical Establishment

The other day, I got a phone call from the manager of my local car wash. He told me that I should come in. It’s been a while since they’ve taken care of my car. I went in and paid the fee that was required for the car wash. But in the course of examining my car, they determined there were several additional things that needed to be taken care of though I hadn’t asked for them originally. For example, they needed to take care of my tires and clean my interior, and there were dents in the bumper that needed to be flattened out and painted. And, they had to sand down and re-buff a part of the hood because there were some scratches.

When it came back, the car looked great. The guy shook my hand and thanked me for coming in. He waved goodbye and said “we’re glad to have you as a customer”, as he sent me home. Two weeks later, I got a bill for an astronomical amount, which I submitted to my car insurance company. Of course, they declined to pay. So I’m stuck with a large bill, and if I don’t pay the bill, even though I did not ask for all the services and didn’t know how much the services were going to cost that were provided to me graciously by the manager of the car wash, if I don’t pay the bill, I’m going to be sent to collections and have all sorts of other problems.

Now, of course, this didn’t happen. It would never happen in any business that operates under normal circumstances except one: the medical business. You go to the doctor. You might make a co-pay. They order all sorts of tests. You don’t know if they’re necessary or not, but they order the tests. And then you get a giant bill from the doctor, and your insurance company may pay some, or they may not. But nevertheless, whether you like it or not, you’re responsible to pay the bill, and if you don’t pay, all hell breaks loose, and they attack your credit report.

I find this somewhat offensive, bordering on egregious. It’s unbelievable that our medical system has no menu of prices. Nobody knows how much things cost. Nobody knows whether they’re necessary. And you have very little say in what happens to you and your wallet. It’s hard to tell whether you really need those tests or whether somebody is afraid of lawyers or if he or she has a mortgage payment to make, and I find that improper.

I like and I trust my doctors and I’m not criticizing doctors. This is really more about the system which includes the medical establishment, insurance companies, and our legal system. But it’s very difficult for consumers, who are patients of medical doctors, to have good relationships with their healthcare providers when they have billing disputes and issues with their care that are not related to the quality of the service provider.

Just saying.

Have you ever had a similar experience?

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May 26, 2016

One Giant Step Forward

Today is an historic day for our new CrowdFunding company. We signed the broker/dealer agreement that we have been architecting and negotiating for many months – so now, the work of launching the website and our initial deals moves into full swing. It might not sound like a big deal to sign an agreement, because some would say “just hire any broker/dealer firm” but we have taken a hard look at the way other platforms are working with broker/dealers and we believe most arrangements are inadequate – at least for our needs based on our vision.

Details on our company and our partner companies will be made available shortly when the first release of our website is made public in the next few weeks. Look for the announcement.

Just like many “would be” syndicators look at the legal documents like they are just paperwork which is a necessary evil, we see the partnership with the broker/dealer to be critical to our success. We look at the legal paperwork as the roadmap that directs the relationship between the syndicator and investor for years into the future – and therefore critically important – not just from a legal point of view. Similarly, we see the relationship with the broker/dealer as central to success in the new world of securities based CrowdFunding.

We see a tremendous convergence of the private securities world with the public securities environment and the right combination of firms is mandatory to make it work correctly while providing the necessary protections for the investors, deal sponsors and platform operators. By architecting the way we conduct and process offerings very carefully, we expect to avoid the many problems we see on the horizon for so many of the other platform companies.

Our architecture mandates that we engage two separate broker dealer firms to oversee our CrowdFunding platform: one to oversee the relationship with our investors, and the other to oversee the activities of our issuers (or usually called deal sponsors). This avoids conflicts of interest and it leverages the strengths that each firm brings to the table.

We anticipate the first deals will be put on the platform by mid-summer, with the robust activity in our marketplace beginning by the end of the fall.

I’d like to thank the Board of Directors of our company for their extraordinary guidance, and to the many shareholders and friends of the company who have contributed in such positive and giving ways.

Our company is comprised entirely of deal sponsors (developers, operators and syndicators). We currently have 53 partners who have combined forces to build the most robust real estate investment marketplace available anywhere. Many of our partners have joined us at trade shows and industry events. They have learned the ins & outs of the CrowdFunding business and they have helped the company to grow and get organized so we can launch a platform like none ever before.

We know with certainty the vast majority of money is held by accredited investors and is managed in some form by a wealth manager, whether it be a Registered Investment Advisor (RIA), stock broker, or other advisor, and we intend to include those money managers in the chain of activity with our company. Although we believe that the CrowdFunding rules create democratization for access to capital, we also believe that doesn’t mean cutting out the people who advise investors and who have built extraordinary relationships with their clients. We instead want to work with these advisors and provide them with exposure to high quality deal flow in private securities involving real estate or other assets.

We believe that wealth managers will adopt the concept of private securities offered through CrowdFunding platforms, but we also believe the next generation of crowdfunded private securities will coalesce around professional sponsors because licensed advisors can’t take a chance on deal promoters who are less than full-time experts in their field.

It’s for this reason that our company has built its entire network of deal sponsors around professional providers. In our environment, only partners can use the platform and only professional deal sponsors can be partners. That means that we all have a vested interest in the success of each other’s deal and our company overall, which can only be good for investors.

We look forward to sharing more with you in the weeks to come and if you want to become a deal sponsor and feel that you meet the criteria we’re looking for, please reach out to me personally so we can talk about your participation.

For experienced real estate providers who have not yet created a syndication or fund structure (which is necessary in the CrowdFunding world), you should attend our Syndication and Hedge Fund Symposium which will take place in October 2016 so you can join the movement. To learn more, go to: http://www.dealmakingsymposium.com/

Please look for another update shortly.

Warmest regards,

JGB

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May 20, 2016

New CrowdFunding Rules are a Game Changer

This was an historic week in the securities industry. Rules that have been in place for more than 80 years were smashed and replaced with new, modern rules that allow citizens from every walk of life to invest in start-up companies right on the Internet. In the past, private placements had to be kept private which effectively meant that you had to be a millionaire to get into a private placement and make any money.

Nothing seems more un-American than having to be a millionaire to make money in the United States of America. But the final deployment of the new rules, as a result of the JOBS Act of 2012, with partial implementations in 2013, 2015 and now 2016, has modernized the old capital formation rules and is changing the landscape of fund raising – for the better.

It’s unclear if the new rules under Title III of the JOBS Act will have much impact on real estate. Allowing non-accredited investors into real estate deals that require a substantial amount of capital doesn’t seem like it’s going to make a very big difference in an overall capital raise. This is compounded by the limits on projects: deal sponsors are restricted to $1M per year and individual investors can only invest (generally) about $5,000 each. So, not much money is going to come from non-accredited investors on a deal-by-deal basis for real estate. But for early stage companies, these small amounts could be a game changer.

The new Title III rules were enough to cause celebration in the streets of Washington DC this week. Hundreds of entrepreneurs, lobbied for the bills that became the JOBS Act, and many of us have been educating the investing public about how all of these new rules work.

Our company has put together a consortium of professional syndicators, who are promoting deals to accredited investors. We already have 53 groups that have joined our company and have signed our Operating Agreement. Our website will be live this summer. We’ve procured relationships with two different broker/dealer (BD) firms. One BD will oversee the relationship with the investors. The other is charged with overseeing the promoters (who are refered to as “issuers”.

We are very serious about making CrowdFunding work. Investors want more choices and deal sponsors want more investors. It’s a win/win for everyone. And we are dedicated to educating the marketplace and sharing information about how these new rules can positively and safely affect investors from every walk of life.

We teach this material in-depth at the Syndication and Hedge Fund Symposium that we host twice a year. The next one will be held in late October 2016 in Las Vegas, Nevada. We hope you’ll join us.

We also hope that you’ll partake in the new capital raising opportunities that exist. And if you’re a professional sponsor please consider joining our CrowdFunding company. Please be in touch with me so that we can share more about how this works and what the opportunity is for you to join us and participate in the modern capital raising revolution.

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March 16, 2015

How Badly Do You Want It?

I’m just returning from a major CrowdFunding conference sponsored by IMN in New York City where I was the opening speaker on the opening day. It was a fantastic gathering with 350 highly sophisticated financial people. I knew many people from the CrowdFunding industry and a lot of people who are promoters, developers, and DealMakers that want to raise capital through CrowdFunding.

It was painfully obvious, that most of the people who are running the Funding Platforms (originally known as portals) are technology people who have very little background in real estate. It’s ironic that they are “curating” deals but that would explain why they are picking simple, cash flowing opportunities while ignoring more complex, value-added transactions.

It makes you wonder how in an Internet world, which is based on disintermediation, these venture capital-backed Platform companies are inserting themselves into transactions as a new intermediary in a form of reintermediation. They are trying to kick out money brokers and insert themselves instead. But only if they pick your deal to CrowdFund, which is probably a long-shot.

What’s also clear to me is that this industry is ready to explode. It reminds me tremendously of 1995 to 2000 when the Internet was on fire and still in its infancy. Companies were rushing to get eyeballs, customers and deal flow. And the same thing is happening in the new CrowdFunding business. People are cutting rates and acting stupid so that they can be on the cutting edge of the industry. That certainly is not sustainable and there will be a revolution. But many of these companies already are getting astronomical valuations for very little activity.

One company that I spoke with did a total of 40 deals with 15 sponsors and just closed a round at a $20M valuation. I believe they’re going out now for more at an even higher valuation. The bottom line is that it’s a race to the finish line – meaning selling out to larger companies. This industry is real and it’s on fire. I’m on fire too. As someone who comes from the Venture Capital business, I am all in – and very bullish about what it happening.

This is a space that I know well and I am not missing out on this one.

People ask why the hedge funds want to be in the CrowdFunding Business. At a conference like this, it’s clear and obvious. Not only is it a new source of potential investors but it’s actually turning out to be a new tranche of capital much like debt or equity, there are certain rounds that are specifically dedicated to CrowdFunding. People are doing unique and amazing things and it was a fascinating experience.

It always excites and invigorates me to go to New York and it winds me up being with these thought leaders and super aggressive entrepreneurs. And it motivates me to continue building the high quality Super-Platform that we are developing with dozens of our colleagues. This Platform is rolling out now to the partners in the Bullseye Capital Fund, then to alumni of our Syndication and Hedge Fund Symposium program who have already built funds – almost all of which have joined the Platform.

Shortly, we will announce the Platform to the wider audience of alumni of our program. And finally we’ll be opening invitations to other people. Our roll-out will position us as one of the most active and most powerful Platform companies in the country.

Every promoter should develop a database of investors and begin using Platform technology. Whether you build your own (a pricey endeavor) or join the Bullseye Capital team, get moving because first movers always get an advantage – in this case, a venture capital-backed, Wall Street style mega advantage.

I know I want and entrepreneurial home run. The question is how badly you want it.

If you have any questions, reach out and let’s talk, but let’s talk fast because the opportunity is racing toward the finish line.

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The Bullseye Capital Fund is an opportunistic buyer of multi-family and commercial real estate that partners with accredited investors who participate in profits. Using our expertise, vast network of resources and experience, we select, fix and profit from distressed assets nationwide. The Fund generates revenue in three ways. Our Value-Add Group optimizes, renovates or otherwise adds value to real estate projects where profit can be realized within one year; our Arbitrage Group uses technology to find and flip parcels for small, but frequent and immediate profits; and our non-performing loan group buys, modifies or repositions non-performing loans for resale. These strategies, combined with our property picking and negotiating skills enable us to produce strong and consistent returns for our investors and partners. For more information, please go to: www.bullseyecapfund.com.

Filed under Business Financing, Business Growth, Creating Buyers, CrowdFunding, Financial News, Growth Minute, Guru Marketing, Private Equity, Raising Capital, Real Estate, That's Cool by

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March 2, 2015

CrowdFunding is not a Shortcut

There seems to be a perception, that if you build it, they will come. Put up your CrowdFunding offering, and money will flow in. Well, unfortunately, like everything else in life, nothing is further from the truth.

Of course we hear about the one success story where money pours in and the lucky guy exceeds his goal for their campaign. That happens one in a thousand times. But for the most part, the people that succeed with CrowdFunding, have done a lot of work, and have done it properly, under the guidance of other people who have figured this out. And they’ve put in the effort necessary to be successful. Probably the same way they do for other things in their life.

Success is possible but it takes work.

As a society, we just don’t want to do the hard work. All of us look at weight-loss, and wish that there was a pill that we could take (I wish there were such a pill by the way!), so that we could continue to eat badly, and exercise infrequently. But it doesn’t work. There is no pill. There is no surgery. There is no shortcut. A change to our current situation requires work. But if you do the work, the weight comes off. It’s a very simple formula.

In CrowdFunding, putting your deal up, somewhere on the Internet, is not a guarantee.

CrowdFunding is nothing more than a lead generation mechanism. That mechanism is designed to expose your opportunity to investors that you might not otherwise have the opportunity to connect with. But once those prospects come into your world, you still have to have a suitable deal. You have to have a proper structure. You have to have documentation that works. And you have to have the experience, track record, and confidence to be able to convince the investor that you are the right person for the job. And if you can’t do that, then you will not be successful in raising capital – regardless of CrowdFunding.

The Internet will not solve your problems. In a certain way, it might make your problem worse. If you are not skilled at your craft, and successful in making deals happen, you’ll have a lot of prospects that will be disappointed. You’ll have wasted a lot of time. And worse, if those prospects turn into investors and you really don’t have the skills to pull off the transaction, then woe is you, because bigger problems are on the horizon, magnified 100 fold.

The lesson here is, go back to basics. Take CrowdFunding for what it is. Treat it as a fantastic mechanism for generating leads. But do the underlying work. Make sure that your deal structure is right. Make sure that your track record and your experience is right. Make sure that you understand exactly what you’re getting yourself into. And understand exactly how to sell your deal, once you get the opportunity to get in front of some investors. The investment business is a great business. And using CrowdFunding to help make it happen, is a great way to do it. You just have to make sure that you work the business in the right way.

We look forward to hearing from you.

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The Bullseye Capital Fund is an opportunistic buyer of multi-family and commercial real estate that partners with accredited investors who participate in profits. Using our expertise, vast network of resources and experience, we select, fix and profit from distressed assets nationwide. The Fund generates revenue in three ways. Our Value-Add Group optimizes, renovates or otherwise adds value to real estate projects where profit can be realized within one year; our Arbitrage Group uses technology to find and flip parcels for small, but frequent and immediate profits; and our non-performing loan group buys, modifies or repositions non-performing loans for resale. These strategies, combined with our property picking and negotiating skills enable us to produce strong and consistent returns for our investors and partners. For more information, please go to: www.bullseyecapfund.com.

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Finally, the next standard-setting Syndication and Hedge Fund Symposium program will be held in Austin, TX from April 26 to 29, 2015. We hope to see you there.

Filed under Business Financing, Business Growth, CrowdFunding, Financial News, Growth Minute, Guru Marketing, Private Equity, Raising Capital, Real Estate, That's Cool by

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February 23, 2015

Why Does Walmart Carry Brands?

When you walk into Wal-Mart, it’s very comforting to see the well-known brands that dot the American landscape on their shelves. Consumers feel at ease with brands. They trust them, they know them, they like them, they ask for them by name. And for all of those reasons, stores carry brands. Although, they tend to make a little more money with off-brands or with house brands, some consumers still the big name products.

The same is true about the way people make investments. Stock market equity investments are frequently but not necessarily made by brand, although lots of people like to stay with the well-known companies or blue chips. But in the private placement business, the vast majority of investors are looking to place their money not so much into a deal – because they don’t have the ability to underwrite the deal professionally – but they believe that in the hands of capable promoters they know, trust, and can identify with, they can feel comfortable. It’s the brand that the promoter creates over time that is so critically important to the successful execution of transactions and it’s what gives the branded promoter the ability to raise money for deals.

So if this is the case, and consumers are looking for private placement opportunities that are sponsored by people that have a track record, a brand, and a name, then why are so many of the portals supporting issuers that don’t have a brand? In fact, in some cases, the name of the promoter is withheld all together.

Worse, in the age of the Internet and disintermediation, some of the larger portal companies are trying to be the brand that consumers count on to vet the operator of the deal. There seems to be some irony in an Internet company disintermediating so they can be the intermediary.

If you look at the portals that are CrowdFunding right now, you’ll find is a lot of one-off opportunities and deals that are not being structured by well-known, professional syndicators. A professional syndicator wouldn’t use a portal the way that the portals are currently set up because the most important tool that a professional syndicator has is his or her professional raising capital arsenal is each individual investor. And although the portals are implying a shortcut to the fund raising process, the truth is that most of these portals don’t ever give the promoter any insight or information about the investors that are going into the deal. The problem with that is that the promoter is then forever shackled to the portal or other source for raising their capital.

One can’t tie up their business and their ability to succeed in business by giving that much power to a third party. After all, part of the reason that people go into business is so that they can be independent, and people who want to remain independent need to have their own means of production. If you don’t retain control of your own means of production, which is in this case the ability to raise capital, then you can’t be independent and successful in business for yourself for very long.

So it’s my supposition that the portals have this backwards. The portals need to promote brands. They need to promote or provide a platform for seasoned and sophisticated syndicators to continue to find investors in a new way. Now, some people would say those are exactly the people that don’t need to find new investors. But precisely the opposite is true. All promoters & all dealmakers always need to find new opportunities, new investors, and new capital. Andy it’s those promoters that should be show-cased in a platform. That makes a lot of sense to me.

It’s for this reason that Bullseye Capital MarketPlace Partners has structured its portal, not around deals, but around dealmakers. Where other platforms are curating deals, we’re curating dealmakers because we believe that the brand that the dealmakers have created is ultimately what makes the most sense.

It’s not a scalable of a model for these portals to curate and manage and underwrite every single deal and toss out 99 out of 100 of them, but what is sustainable is to vet and understand what the dealmakers are about and then give the dealmakers great latitude in their dealmaking process using the skills that they bring to the table.

Not long from now, the model will shift away from curating deals to curating dealmakers. And we intend to be on the forefront of this transition.

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The Bullseye Capital Fund is an opportunistic buyer of multi-family and commercial real estate that partners with accredited investors who participate in profits. Using our expertise, vast network of resources and experience, we select, fix and profit from distressed assets nationwide. The Fund generates revenue in three ways. Our Value-Add Group optimizes, renovates or otherwise adds value to real estate projects where profit can be realized within one year; our Arbitrage Group uses technology to find and flip parcels for small, but frequent and immediate profits; and our non-performing loan group buys, modifies or repositions non-performing loans for resale. These strategies, combined with our property picking and negotiating skills enable us to produce strong and consistent returns for our investors and partners. For more information, please go to: www.bullseyecapfund.com.

Filed under Business Financing, Business Growth, CrowdFunding, Financial News, Growth Minute, Private Equity, Raising Capital, Real Estate, That's Cool by

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February 18, 2015

Don’t Be Stupid

Every entrepreneur that’s ever started a business probably had to boot-strap that business in some way or another. That means making compromises – sometimes bad ones and sometimes stupid ones – in order to get the job done.

In the long run, doing what you have to do is not stupid – if it works out. Unfortunately the odds do not favor decisions that are less than optimal.

For example, how many people try to get others (especially sales people) to work for free on a commission only (i.e. pay on success basis) because they don’t have any money to pay in advance? The problem with that formula, first, is that you usually don’t get the best sales people. Number two, you probably don’t get the full and undivided attention of the sales people. Their priority is not your priority, because you’re not paying them to make your business their priority.

I understand why people do this, and I’ve done it myself. But I’ve also done it where I’m capitalized in advance. Let me assure you, that being capitalized in advance is better.

The tactic’s ironic. Young companies will generally employ salespeople on commission with very high payouts. The more mature the business becomes, the lower the payouts go until the point where companies rely on media and advertising and pay little or no commissions at all. Ironically, at the end of the day, commissions are the very most expensive form of compensation for moving product. And at the end of the day if you have you have the volume to support it, media advertising is far and away the cheapest.

This is not a criticism of doing what you have to do nor of making compromises. Rather, I hope readers will try to organize themselves so they can be smart – providing the best chance of success.

As I watch the new CrowdFunding industry unfold, I’m watching the businesses of undercapitalized operators trying to take a stab at this burgeoning industry. Most are going to fail. Some are going to fail miserably. Many already have.

There are several reasons. First, almost all of the operators who are setting up portals and other facilities to help other people raise money are undercapitalized. That means before they even get out of the gate, they’re making business decisions that are stupid. They’re not stupid on purpose: they just don’t have any other choice. And if they had some capital, I can assure you they’d be making other (hopefully better) decisions. They’d be hiring people. And they wouldn’t be running around parading a patchwork of unpaid or undercompensated individuals, who may or may not be well suited for the job that they’ve been awarded.

Think about it: businesses in the business of helping people raise capital are undercapitalized. How is that for irony?

The second reason that many of these CrowdFunding companies are going to fail is because the securities rules governing the way the capital raising works, prohibits the payment of upfront fees to most of these companies. Those rules are making it very difficult for many of these upstart portal operators to be successful in the short run so they take participation interest on the backend. And because they’re undercapitalized, they can’t wait until the long-term to get their backend interest.

So most portal operators are doomed to be out of business before they start. Further, because they’re undercapitalized they may or may not have much of a following, and they probably don’t have the capital to secure a substantial database of investors which is what the dealmakers, who list on their site, want to have. For all of these reasons, most of these companies that are out there purporting to be portals will either fail or fail miserably.

But there is a solution. And the solution involves being properly capitalized and curating the right part of the deal cycle. Most of the portals that are  curating deals. Because of our Syndication and Hedge Fund Symposium program, and because of the 450 syndicators that we have in our network, we don’t need to curate deals. We want to curate “dealmakers”. If you’re a strong dealmaker, we want you to be part of our network and our process. We are properly capitalized. We do have the ability to get income long-term. And we do have a business model that doesn’t levy fees on people up front and further allows us to get into the long-term and participate the way that so many dealmakers want us to participate.

If this type of structure sounds attractive to you, then we would like you to be in touch with us so that we can share with you a new type of CrowdFunding portal that’s designed to work for dealmakers. This is not for somebody who makes an occasional one-off transaction which is what so many of the other portals are targeting whether they recognize it or not.

We look forward to hearing from you.

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January 26, 2015

Bullseye Capital Fund Makes Acquisition: Enters Note Business

In a business transaction that was finalized at the end of December 2014, Quartz Mountain Note Workout Fund I, LLC of San Antonio, Texas has been acquired by Bullseye Capital Real Property Opportunity Fund, LLC of Agoura Hills, California.

“The combination of these two companies creates a powerful, non-performing loan (NPL) business,” says David Jacobs (formerly with Quartz Mountain), Partner and newly appointed Director of NPL Business for the Bullseye Capital Fund, “It leverages the existing NPL business of Quartz Mountain and the strategic resources and capital-raising capabilities of Bullseye Capital.”

Joel Block, CEO of Bullseye Capital, feels that together, the two companies will provide strength and an opportunity for both businesses to accelerate growth, “Bullseye Capital will provide resources such as infrastructure and capital, so Quartz Mountain can focus on what they do best: buying defaulted loans.”

Quartz Mountain Capital will have more support, personnel and capital. “NPL buyers now have access to even more high-quality loans,” says Block.

This merger is creating a new era for the business to grow and sales to take off.

David Jacobs agrees: “the focus of the new business is velocity and value.  We will be very strategic about our purchases, provide significant value-add, and aggressively sell a quality product with transparency and integrity. We believe small to mid-sized NPL buyers will come to rely on us for their purchases.”

Interested loan buyers may visit https://m262.isrefer.com/go/bncr/joelgb7/ for more information.

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The Bullseye Capital Fund is an opportunistic buyer of multi-family and commercial real estate that partners with accredited investors who participate in profits. Using our expertise, vast network of resources and experience, we select, fix and profit from distressed assets nationwide. The Fund generates revenue in three ways. Our Value-Add Group optimizes, renovates or otherwise adds value to real estate projects where profit can be realized within one year; our Arbitrage Group uses technology to find and flip parcels for small, but frequent and immediate profits; and our non-performing loan group buys, modifies or repositions non-performing loans for resale. These strategies, combined with our property picking and negotiating skills enable us to produce strong and consistent returns for our investors and partners. For more information, please go to: http://bullseyecapfund.com/.

 

Filed under Business Financing, Business Growth, Creating Buyers, CrowdFunding, Financial News, Growth Minute, Private Equity, Raising Capital, Real Estate, That's Cool by

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November 23, 2014

What CrowdFunding Is, and Isn’t

I get calls every week from alumni of the Syndication and Hedge Fund Symposium program, advising me that they have a “smoking hot deal” that needs some number of dollars. They ask me for an introduction to one of the big CrowdFunding platforms such as Realty Mogul, iFunding, FundRise and the like. They all want to tap those big databases for the millions they need. I’m quick to advise them it doesn’t quite work that way. You may be disappointed by some of what I have to say.

But not to worry. There is a happy ending.

First of all, these venture backed companies are run by some of the smartest business people on the planet. They’re not about to allow any of us to “borrow” their list of investors, which they spent millions of dollars building, so we can fund our deals. Life doesn’t work that way, and business doesn’t either: especially a new and exciting business like CrowdFunding.

The way most of those bigger portals work is they curate the deals they like. That means they select a few deals from the thousands that cross their table. They pick the promoters and deal types. Deals have to meet rather specific criteria that each portal establishes for itself. One might like high-yield investments, another might prefer land investments and yet another might prefer debt instruments. Every one of those sites has some area of specialization. They’re not random and they demand established operators with solid track records, good net worth and expert deal sense. But even if you qualify, the likelihood of being selected is still extremely low.

The myth of CrowdFunding being the “democratization of access to capital” is nothing more than a myth. Most of big portals will look at thousands of deals, but they’ll pick a tiny number to fund. The number I’ve heard is very close to 1% of what crosses their plates. In fact I saw an interesting statistic: one portal says they have evaluated over $700 billion worth of deals, yet they’ve only actually funded less than $50 million. $50 million is nothing to sneeze at, but when you compare it to the $700 billion they’ve evaluated, you can see they’re not selecting very many deals to fund.

What other choices does a promoter have to participate in the new CrowdFunding arena? I usually suggest the promoters manage and retain control of the “means of production” of their business. In the syndication and hedge fund business, the means of production is capital. It’s the one function you don’t want to outsource.

Let’s say for example you get lucky and get one of those big portals to fund one of your deals. Next time you go back and they change their mind because they’re already busy with other deals, or the new deal you bring them doesn’t fit their evolving criteria. Because you’ve become dependent on a third party to raise your capital, you effectively are out of business. Finally, when you deal with these larger portals, they’re not loaning you the investors to be nice, they’re going to take some very significant portion of the carried interest that the promoter charges for setting up the deal. Plus there may be broker/dealers involved who will charge fees, so the amount of overhead that’s added to the deal is significant, and the amount you will retain will probably be disappointing. Plus from my experience in the venture capital world, if you “fall down and skin your knee” in the execution of the deal, they might take it away altogether to protect the investors. It isn’t going to work out how you think.

Retaining control of the means of production means you probably should be building your own database of investors. In order to do that, you need to have your own portal. The “white label” portals which are typically operated by software companies, can cost $10,000 to $35,000 to set up, and $3,500 and $5,000 a month to maintain and operate. That means the very first year alone, your investment could be up to $100,000. To the large hedge funds that’s a worthwhile investment in order to build a substantial databases of investors. They’ll use the portal to handle the e-commerce portion of document sharing, investor subscription and cash management. It’s very smart.

But for entrepreneurial companies it’s not an option. It’s simply is not economically viable. For those reasons it’s very difficult for entrepreneurs to participate in the CrowdFunding opportunity. This is compounded by the fact that very few entrepreneurs have a pre-existing database of investors to reach out to on the Internet so they are starting from scratch. It’s hardly an enviable position.

As a long-time entrepreneur, I look hard at these kinds of problems. What I notice is that there are thousands of real estate entrepreneurs, who want to promote deals – many have substantial experience in the business. But they’re being boxed out of an industry that’s only one year old, because they either don’t have access to the venture capital, or they don’t have access to the working capital to buy a portal.

For these reasons, Bullseye Capital has established a company that will solve these problems for the entrepreneurs who want to own and control their own databases of investors without the burdens described above. If you want to participate in something bigger than yourself and participate in a company that has the potential for creating enterprise value for all of us, stand by.

First, reply to this piece and let me know that you are interested in learning about our solution. Alumni of our standard-setting Syndication and Hedge Fund Symposium program will be notified about this company in the next several weeks. Others will hear about it early next year.

Finally, the next standard-setting Syndication and Hedge Fund Symposium program will be held in Austin, TX from April 26 to 29, 2015. We hope to see you there.

Filed under Business Financing, Business Growth, CrowdFunding, Financial News, Growth Minute, Raising Capital, Real Estate, That's Cool by

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