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Chapters:
- Front end costs
- Marketing sequence & costs without a fanbase
- Marketing costs with a fanbase
- Leverage your brand & customer product purchases on your website
Disclaimer:
The content in this webinar is not and shall not be construed as investment advice. This information is meant to be informative and for general purposes only.
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Rod Turner
Rod Turner is the founder and CEO of Manhattan Street Capital, the #1 Growth Capital service for mature startups and mid-sized companies to raise capital using Regulation A+. Turner has played a key role in building successful companies including Symantec/Norton (SYMC), Ashton Tate, MicroPort, Knowledge Adventure, and more. He is an experienced investor who has built a Venture Capital business (Irvine Ventures) and has made angel and mezzanine investments in companies such as Bloom, Amyris (AMRS), Ask Jeeves, and eASIC.
www.ManhattanStreetCapital.com
Manhattan Street Capital, 5694 Mission Center Rd, Suite 602-468, San Diego, CA 92108.
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Costs. So real estate offerings are a little more expensive from a securities attorney point of view, but if we assume a simple audit, which is what I'm, I'm doing right now, I'm assuming a simple audit because I can't figure out for you what your custom order would be. If you've got messy financials that aren't complete, that could be a lot more expensive, but with a simple audit, then to spend about $150,000 in all, all-inclusive expenses to get to the point that you are qualified is a reasonable number. It wouldn't get much lower than that. And it could get higher than that if you delayed and so forth. But hundred 50 K is a reasonable budget to go in with. And then when we are live raising money, the sequence of events, it does vary according, you know, so if we are, if we're talking, if, if, if a company has a large fan base, then when we're ready, marketing that fan to that fan base is gonna cause rapid action.
So customers with, excuse me, companies with large customer bases can rapidly raise money. We've had that happen. But when it's a company without a large fan base, without a large customer base that's starting out, then you aren't gonna spend much money in the first month of advertising because we know, we don't really know yet which target audiences, which ad creative are gonna work the best. So if you spend five or $10,000 in advertising in month one, that's enough to test and evaluate and tune and optimize. And from that point, you go on improving the optim and optimizing the marketing to the, to, to you reach a stage that you are happy with it, and then you expand the spending on that outreach marketing and obviously marketing, sending emails to our member base is, is a good thing to do. But that goes without saying, okay, so I was, let me touch on the expenses then.
Once you have a achieved, once we have achieved efficiency in that marketing outreach for a company that doesn't have, or, or an offering that doesn't have a large amount of traction already, it doesn't have a big fan base, then, you know the advertising cost, the best that I've seen so far was $3 and 30 cents spent per hundred dollars raised. But that was before, that was for a biotech company. That was before Apple started imposing limitations and restrictions on marketing efficiency on Apple devices. So that number is no longer precisely relevant, but that's the best that we've seen directly. But once you get it working properly, you know, to achieve a six or eight or 10% marketing spend level per for the money that's brought in from fresh investors is is a reasonable expectation. And you, and you have to, as a cost, you have to do management financials once every six months.
And an annual US gap audit if you don't list on a major exchange. So that isn't the worst. I mean, our US gap audit is relatively straightforward, but it is an expense. So leveraging the fan base lab, leveraging the brand, leveraging customers is, is intensely valuable. When a company has an active website with a lot of activity on it, then that becomes a very effective, very, very cost-effective place to promote their investment offering. So we have customers that are doing that and that's working very, very well for them, as you would think to bring down the cost of marketing.
THIS TEXT TRANSCRIPT HAS ERRORS IN IT THAT WERE CAUSED BY THE SPEECH TO TEXT CONVERSION SOFTWARE WE USED. DO NOT DEPEND ON THE TEXT TO BE ACCURATE. WATCH THE RELEVANT PARTS OF THE VIDEO TO MAKE SURE YOU ARE PROPERLY INFORMED. DO NOT DEPEND ON THIS TEXT TRANSCRIPTION TO BE ACCURATE OR REFLECTIVE OF THE STATEMENTS OR INTENT OF THE PRESENTERS.