The Money Mondays
Episode: How Retail Investors Beat Wall Street (The Rich Hate This)
Guest: Darren Marble
Release Date: December 9, 2024
Host: Dan Fleyshman
Introduction
In this compelling episode of The Money Mondays, host Dan Fleyshman welcomes Darren Marble, a seasoned entrepreneur and the youngest founder of a publicly traded company. With a career spanning angel investments in 43 companies and speaking engagements at over 250 business events, Darren provides deep insights into the evolving landscape of retail investing and crowdfunding.
Darren Marble’s Journey and Ventures (00:32 - 03:00)
Dan Fleyshman sets the stage by sharing the serendipitous meeting with Darren aboard an RV motorhome in Beverly Hills. Their long-standing friendship, spanning over a decade, paved the way for an engaging conversation about Darren’s ventures.
Darren’s Background:
- Serial Founder: Born and raised in the Bay Area, Darren attended UCLA but dropped out to pursue entrepreneurship.
- Current Ventures:
- Issuance: A fintech company likened to "Stripe for securities," providing a processing engine for online capital raising.
- Going Public: A show inspired by Shark Tank, allowing viewers to invest in featured companies, blending entertainment with investment opportunities.
Notable Quote:
"Customers deserve an opportunity to be owners in companies, regardless of your net worth, your income."
— Darren Marble [01:44]
Going Public: Revolutionizing Crowdfunding (03:00 - 05:19)
Darren delves into the creation and evolution of Going Public, drawing parallels to Shark Tank but with a twist—integrating reality TV elements to enhance authenticity and entertainment.
Key Highlights:
- Interactive Challenges: Darren shares anecdotes like Dan being put in a boxing ring with Floyd Mayweather to pitch businesses, adding a unique and entertaining layer to the investment process.
- Development Journey: The concept, initially pitched in 2017, faced skepticism but evolved over seven years to incorporate necessary elements like production, capital, technology, and compliance.
- Future Plans: With two successful seasons under their belt, they are gearing up for season three, aiming to expand their reach and impact.
Notable Quote:
"It's the opposite or the antithesis of cryptocurrency... these are real businesses that have real revenues."
— Darren Marble [08:04]
Issuance: Empowering Retail Investors (05:19 - 09:32)
Darren provides an in-depth explanation of Issuance, the backbone of his crowdfunding ventures.
Key Features of Issuance:
- Regulation Crowdfunding (Reg CF): Allows startups to raise up to $5 million from anyone over 18 globally.
- User-Friendly Platform: Comparable to Shopify for shares, it offers a seamless, mobile-optimized experience enabling investments via credit cards, debit cards, Cash App, ACH, or wire transfers.
- Compliance: Ensures adherence to SEC rules, incorporating audited financials, Form C filings, and legal oversight.
Notable Quote:
"It's like Shopify for shares or Stripe for capital... really fast checkout, it's about 45, 50 seconds and compliant with SEC rules and regulations."
— Darren Marble [05:31]
Why Choose Crowdfunding? Navigating Alternatives to Public Markets (09:32 - 14:14)
Darren discusses the burgeoning market of alternative investments, emphasizing the shift from traditional public markets to more dynamic, retail-driven opportunities.
Key Points:
- Popularity of Alternatives: Startups, secondaries in private giants like Anduril or Stripe, and other non-public investment opportunities are gaining traction.
- Changing Investor Demographics: Younger investors, distrustful of traditional financial media, prefer platforms like newsletters, social media, and viral content over CNBC or Jim Cramer.
- Potential Rewards vs. Risks: While alternative investments offer high returns—as exemplified by Cyan Banister’s investment in Uber—they lack liquidity, making them long-term commitments.
Notable Quote:
"There’s an asymmetric upside in the right alternative investment deals."
— Darren Marble [09:49]
The Crowdfunding Process: Prerequisites and Execution (14:14 - 17:19)
Darren outlines the essential steps and considerations for companies looking to launch successful crowdfunding campaigns through Issuance.
Essential Steps:
- Financial Disclosure: Provide two years of reviewed or audited financials.
- SEC Filings: Submit a Form C with the SEC.
- Third-Party Involvement: Engage with a FINRA-regulated funding portal or broker-dealer, auditors, and securities lawyers.
- Marketing Campaign: Promote the campaign to existing communities, leveraging paid media and influencer partnerships.
Key Considerations:
- Fit for Crowdfunding: Companies with established communities, substantial revenue, and engaged followers are ideal candidates.
- Not for Everyone: High-profile entrepreneurs without a natural audience may struggle to succeed in this model.
Notable Quote:
"This industry is the opposite or the antithesis of cryptocurrency... these are real businesses that have real revenues in products and services."
— Darren Marble [08:04]
Darren’s Commitment to Democratizing Wealth (12:34 - 19:21)
Darren shares his passion for disrupting traditional venture capital systems, advocating for wealth creation among everyday Americans.
Core Beliefs:
- Equal Opportunity: Everyone should have access to venture-style returns, not just the affluent.
- Leveling the Playing Field: Crowdfunding allows everyday investors to support and benefit from business growth.
- Value of Hard Work: Emphasizes instilling a strong work ethic in future generations over simply transferring wealth.
Personal Insights:
- Wealth Accumulation: While Darren anticipates significant wealth in the future, he prioritizes hard work and ensuring his children understand its value over passing on vast sums of money.
- Resilience: Reflects on overcoming numerous challenges over 20 years, including being hacked, stalked, sued, and extorted, highlighting the perseverance required in entrepreneurship.
Notable Quote:
"Real wealth can be created and should be created by everyday Americans. Regardless of how rich you are, how successful you are, you shouldn't need to stroke a million-dollar check or a 10 million-dollar check into a business to be able to earn a real return."
— Darren Marble [12:38]
Selecting Companies for Going Public (15:31 - 19:21)
Darren explains the criteria for choosing companies to feature on Going Public, focusing on exceptional founders and diverse, revenue-generating businesses.
Selection Criteria:
- Exceptional Founders: Authentic, entertaining, and capable of executing their vision.
- Diversity: Prioritizes underrepresented groups, including founders of color and female entrepreneurs, to reflect the true demographic landscape.
- Proven Execution: Only companies generating revenue are considered, avoiding idea-stage startups.
Notable Quote:
"We're looking for incredible businesses, but incredible founders. This is a show, so we are looking for people that are interesting, authentic, entertaining, maybe a little bit eccentric."
— Darren Marble [15:49]
Incorporating Charity in Business (17:19 - 19:21)
Dan poses a question about the integration of charity into corporate structures. Darren shares his nuanced perspective, recognizing that while philanthropy is commendable, it should align with the founder’s passion and business model.
Key Points:
- Personal Decision: Not all businesses need a charitable component; it depends on the founder’s values and mission.
- Case Study: Highlights The Crippling Company, a hot sauce brand where 5% of revenues support a cerebral palsy foundation, illustrating successful integration of charity.
Notable Quote:
"It's a very personal concept... it really comes down to the founder. Who is the founder? What are they passionate about?"
— Darren Marble [17:26]
Advice for Entrepreneurs and Investors (19:21 - 21:47)
Darren offers strategic advice for entrepreneurs navigating the myriad investment options and for investors determining where to allocate their resources.
For Entrepreneurs:
- Understand Filings: Ensure compliance with SEC regulations and prepare necessary disclosures.
- Leverage Communities: Utilize existing customer bases and engaged followers for successful crowdfunding.
- Seek Exceptional Talent: Collaborate with diverse and capable founders to enhance the show’s appeal and investment potential.
For Investors:
- Invest in What You Know: Focus on sectors or companies where you have expertise or passion, increasing the likelihood of informed and confident investments.
- Risk Awareness: Recognize the lack of liquidity in alternative investments and commit with a long-term perspective.
Notable Quote:
"Invest in what you know... Maybe you're an expert or you have some knowledge or some advantage in one because you worked at a business you started a company in some sector."
— Darren Marble [14:14]
Closing Thoughts and Where to Find More (21:47 - 22:05)
Dan and Darren wrap up the episode by directing listeners to Going Public and Issuance for further exploration into crowdfunding opportunities. They emphasize the importance of open discussions about money and financial literacy, underscoring the podcast's mission to educate and empower listeners.
Resources:
- Going Public Series: goingpublic.com
- Issuance Platform: issuance.com
- Social Media: Darren can be found on Twitter as @aaronmarble
- Podcast Support: themoneymondays.com for subscriptions and additional content.
Final Quote:
"It is rude not to talk about it because you let people make these mistakes that they don't have to because they don't have the knowledge."
— Dan Fleyshman [22:05]
Conclusion
This episode of The Money Mondays offers a comprehensive exploration of the transformative potential of retail investing and crowdfunding. Darren Marble’s insights highlight the democratization of wealth creation, emphasizing accessibility, community engagement, and the importance of informed investment decisions. Whether you’re an entrepreneur seeking capital or an investor looking to diversify, the discussions provide valuable guidance on navigating the modern financial landscape.