← The Money Mondays
The Money Mondays
How Retail Investors Beat Wall Street (The Rich Hate This) w/ Darren Marble 💵 E99
00:23:14
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- [00:00]
A
Alternatives are maybe the most exciting aspect of the financial markets right now. Investment opportunities that are not public. Alternatives are startups. They are secondaries. Maybe secondaries in Anduril or Stripe, you know, big, big multibillion dollar private companies, but where there's demand for those securities, this market is maybe the fastest growing market, you know, in US capital markets.
- [00:32]
B
Ladies and gentlemen, welcome to the Money Mondays. We are sitting here inside of an RV motorhome in Beverly Hills, California. I had podcasts lined up all throughout the day and I happen to be scrolling through social media and saw my next guest was in Beverly Hills also. Normally he's in New York and Tokyo and flying around the planet working on financial things in the public markets, crowdfunding, etc. And so I noticed he's right down the street and so I convinced him to come over here and do this episode. So I'm really excited. We've been friends for I don't even know how many years now. It's got to be 8, 9, 10, 11, 12 years. And so timing wise, it worked out perfectly. And that's the concept of an RV motorhome is it removes friction. I would have driven over to wherever he was. I often do that for celebrities, athletes and business moguls. I drive this motorhome to them to remove the friction to remove the timing. And so it is serendipitous that our guest is here today because he happened to be in town. Now, over his career, I'm going to let him get into it. He has been a lot of his time in the crowdfunding space. That is where I first met him and I watched him build that up and watched him help raise tens of millions of dollars for multiple different companies to help them with their businesses. So we'll get right into that. So if you can, Mr. Darren Marble, please give your quick two minute bio so we get straight to the money.
- [01:44]
A
Dan, thanks so much man. It's awesome to be in here with you. The last time I was checking this out, I think we were in Temecula filming part of season two of what's your star of going public. So a serial founder, born and raised in the Bay Area, came to UCLA for college, dropped out of ucla, got into sales, sales took me into entrepreneurship and now I'm a serial founder. I own and operate two companies that are in the online capital raising space. So I have a fintech company, Issuance, which is like a processing engine for securities. It's like stripe for securities or stripe for capital. And then as you know, I'M a producer of a show of what you're a star called Going Public, which is like Shark Tank, where viewers can learn about exciting companies like cards and coffee and ultimately click to invest and buy shares in featured companies while they watch. I would say, you know, in summary, my mission and kind of what drives me in these companies is a very simple idea that customers deserve an opportunity to be owners in companies, regardless of your net worth, your income. And now there's new laws in the United States that permit everyday Americans to buy shares in companies like Cards and Coffee or thousands of others that are turning to their communities to help fuel the next stage of growth of their businesses.
- [03:00]
B
So goingpublic.com, someone goes there, they watch this show there. Where else can they watch it? How did you come up with it? Walk us through what is Going Public.
- [03:08]
A
So it's a show like Shark Tank, where we follow the stories of founders building their businesses, raising capital. And now we infuse the format with apprentice style challenges. So for instance, if you haven't watched, we put Dan in a boxing ring with Floyd Mayweather.
- [03:22]
B
Yes, he did.
- [03:23]
A
And the lights go on and it's boom, There's Floyd, the greatest boxer alive. And you're at the Money Mayweather Gym. And your challenge was to pitch your business while sparring with him. That is you and the other founders out of their comfort zone. And that's what makes this show exciting. It's what makes it authentic and entertaining. Season one was much more of a documentary style. Put a few million dollars into the production. We got a startup documentary. I went to my partner the other year and said, if this is going to be bigger than Shark Tank, it needs to be more interesting. We have to have a true reality format here.
- [03:54]
B
You're kidnapping me.
- [03:55]
A
Kidnapping you at your own ranch. Nonetheless, the origin of this company is my co founder, Todd Goldberg, pitched me on this idea in 2017. We were at a Ruth's Chris steakhouse in New York. I was involved in an IPO where the retail investor, everyday Americans, were actually able to buy IPO shares. And it was unique. It was an historic deal. And he said, darren, what if we were to create a show like Shark Tank where viewers can invest? I said, todd, as you're a very good friend, I'm here to tell you this is a very bad idea. I've heard this pitch myself a hundred times, and you're not the only guy that's pitched me on this. He was kind of shocked. Todd is not a guy who likes to hear no which ultimately makes him a good co founder for me. He said, okay, this is such a common idea. Where do I watch it? And of course, it didn't exist. And what we realized in that moment is that it's a very complicated business to execute. So we figured out what were the components that we would need to put together to produce this show. We need production, we need capital, we need technology, we need a business model, we need a distribution partner who's going to put this show out where their audience can potentially invest money into a company. It may or may not be successful. Maybe a company fails. So we were, you know, trying to answer these questions. Liability, risk, compliance. And it's taken us seven years, you know, to put out two seasons. And now we're on our way into production for season three and hopefully a lot more next year.
- [05:19]
B
Now, behind all that is a company called Issuance. Explain that. That is the more technical, important structure which all things need. All sexy cool things need infrastructure in the back end. What is Issuance?
- [05:31]
A
Issuance is a software platform. It's a platform that supports various kinds of online capital raising. So we have a product for campaigns which are known as regulation crowdfunding campaigns. This is a capital raising tool that's been in effect since 2016 that allows companies, startups to raise up to $5 million from anyone over the age of 18 globally. But to host a Reg CF campaign, you have to work with a finra regulated funding portal or a finra regulated broker dealer. So we're regulated. This is a regulated software platform. You can't. It's shopify for shares or stripe for shares, but ultimately it's a subscription engine. It's a software that allows retail investors to buy shares in a startup using their credit card, debit card, cash app ach or wire transfer. It's mobile optimized so that the everyday American, the retail investor can buy shares in his startup on their phone and check out using Apple pay the same way we buy products when we see an ad on Instagram. So we've really worked to make this software super slick. Really fast checkout, it's about 45, 50 seconds and compliant with SEC rules and regulations. It's taken us many years and many millions of dollars to kind of build out.
- [06:47]
B
So let's say someone has a company and they're like, ooh, I'm going to Google search crowdfunding crowdfunding campaign. Why should they consider doing a crowdfunding? And what are the options?
- [06:58]
A
Really? Good question. So just like any kind of capital raise, you know, Raising capital for Your business under regCF, for instance, is not a fit for everyone. Typically, the companies that raise the most capital have a community of customers, fans and followers. So if you're listening, you're watching. If you have a brand that's been established for several years, you're doing a few million in revenue, you've got a big email list, highly engaged email list, you have a real authentic and engaged community. You're a great fit to raise capital under REG cf. You have a community that you can very easily turn into investors. Conversely, if you're an AI guru who sold your last company for a billion dollars and you're starting your next business, but you don't have that natural audience, you're actually not a good fit. So, you know, we try to work with companies and figure out which businesses are actually going to have success raising capital this way because it tends to favor the brands that have existing communities.
- [07:53]
B
So someone, that's it. They decided like, you know what? I listened to Darren Marble. I'm going to use issuance. I'm going to do a crowdfunding campaign. What are the other elements to make it successful? So it's not just another campaign?
- [08:05]
A
Well, there's actually prerequisites first. So before you launch, you actually have to provide certain disclosure to the investing public. And this is why the sec, the securities and Exchange Commission, highly supports our industry. You have to provide two years of reviewed or audited financials as a first step. Then you have to file a disclosure document with the SEC called a Form C. And one of these steps requires a third party auditor. The other step requires a third party securities lawyer or a securities law firm. And that's the trade off. So, you know, I will sometimes say that this industry is the opposite or the antithesis of cryptocurrency. No judgment on crypto, although I'm not active in that space. But with crypto, you can kind of launch a meme coin and tomorrow start pumping and promoting. And that's not how this industry works. These are real businesses that have real revenues in products and services, that are raising capital selling real securities. And that requires a process of disclosure, audits, legal work. And then once you go through that process, and this could take 30, 60, 90 days, depending on the readiness of the business, then you launch the campaign. And from there there's a marketing campaign that takes place. There's a marketing campaign to your customers, your fans, your followers. You could invest dollars in paid media. You could bring in influencers or celebrities to market the deal. All of these things are now legal. So that's kind of the upside.
- [09:32]
B
So a consumer is listening. They're watching goingpublic.com they're seeing a cool episode and they're like, oh, I like that company. And they want to invest $350, some random number. Why should they consider investing into startup companies or mid sized companies?
- [09:50]
A
Alternatives are maybe the most exciting aspect of the financial markets right now. Alternatives meaning investment opportunities that are not public. Right. So you've got stocks, bonds, those things are public. There's a lot of liquidity. Alternatives are startups. They are secondaries, maybe secondaries in Anduril or Stripe. Big, big multibillion dollar private companies. But where there's demand for those securities, real estate investments, private credit. So this market is maybe the fastest growing market in US Capital markets right now. One of the reasons, by the way, is that fewer companies are going public right now than ever before. So there's a backlog of companies that raise a lot of money. They're private, they don't want to go public. They're not having a hard time raising capital in private markets. And also people watching Jim Cramer, cnbc, that's an old model. That's a dying model. That's a dying network. Truthfully, Kramer's become a meme. The average millennial or Gen Z investor doesn't trust traditional financial media. They don't get their news from Jim Cramer or CNBC. They get their news from newsletters, from X, from TikTok, from Instagram, from consumable viral content. So the younger investors are actually more interested in alternatives now than ever before. You know, I think that the risks are that you're investing in an asset that doesn't have liquidity. So you're not going to buy $350 of a startup in our show and flip it for $1,000 tomorrow. Somebody investing in cards and coffee is hoping that you as the founder are going to be able to exit the business one day. It could be in two years, could be in five years. Maybe you sell the company, maybe you ipo, maybe you don't. Right. So there's risk there, but that's where there's also massive reward. So we have an investor, for instance, in our company who you met in the series, Cyan Banister. Cyan is a famous Silicon Valley investor. She and her husband invested $50,000 into Uber as a private company in the seed round and turned that $50,000 into 200, something odd million at the IPO. That's the kind of return you're not going to get investing in a public company unless you're holding it Nvidia for 15 years. So there's this kind of asymmetric upside in the right alternative investment deals.
- [12:34]
B
Why have you dedicated your life to the crowdfunding space?
- [12:38]
A
I love it. You know that I believe in it. And I think there's a system that needs to be disrupted. That system is a system of traditional venture capital where the rich get richer. You've got the limited partners investing in the general partners and you've got these multibillion dollar funds and these people are touting access to the best startups. And you know, this is the rich getting richer. And what I believe is that 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, to earn a venture style return. So what we're doing is we're working to level the playing field and make it exciting. The whole purpose of this show is to provide entertainment insight, education and access. Access to exciting investments that the average person has never had access to until now. And that's what we believe in.
- [13:46]
B
So we have a lot of entrepreneurs that listen business owners and they start to accumulate some wealth. They go from making 80 grand to 100 grand, 150 grand, quarter million, hopefully more. They start to bring in some real income. How do they decide when there's so many options? I can invest in cryptocurrency real estate. I can invest in XYZ company. I could do private equity. I could just put it into a CD. I could do an S&P 500. So many things that people can do. How should they be thinking about researching and figuring out what the heck to invest into?
- [14:14]
A
It's a very good question. I think there's a common adage, and it's probably been said before on your show, which is invest in what you know, right? So everybody has some level of expertise, whether they know it or not. A lot of people have expertise. They don't think they're experts, but they are relative to someone else down the street that doesn't have three years, four years of experience doing whatever they're doing. Investing in what you know is a good starting point. You're never going to be an expert in, you know, five sectors, 10 sectors, but 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, you're passionate about consumer products or medical devices because you have a family member that had some issue and you've got some knowledge. I think that's one thing is kind of investing in your passions, things you are knowledgeable about. That's going to make it a little bit easier. And what's cool about this industry is that the retail investor can invest a hundred dollars into cards and coffee or another company in our show or outside of the show, you don't need to put in your life savings. In fact, of course you shouldn't. So you know not to say that the person that's investing 100 bucks shouldn't do any due diligence. But at minimum, I like the idea of people investing into things they know they have some expertise in. That's maybe a good starting point.
- [15:31]
B
So these companies come to you, you decide, okay, this is the one. I'm going to get behind this company as a client. You also turn down a lot of clients. What are the things that make you say, you know what, this is the type of company I want to work with. And maybe I don't like that founder or I don't like that business or I don't know. This is really a scalable thing.
- [15:50]
A
We're looking for exceptional founders in a lot of ways. We operate our business like a venture fund. So we're not technically making an investment, a direct cash investment in the companies in our show, but we are getting equity, we're getting compensated in equity. And so 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 that will play well in a show like this, right where they're going through multiple challenges. So we're looking for diverse founders, founders of color, female founders, woman owned businesses to really give viewers a sense of the average. There's so much out there we've never wanted this show to be. It's the white male founder show. That's just boring and that's not the reality of this country today. There's a lot of diversity out there in the world of entrepreneurship and we want to do our part to highlight that diversity because I think it's cool, I think it's the right thing to do. We're looking for founders that have proven they can execute. That means they're generating revenue. So we're not putting idea stage companies in this show. Now there are great idea companies out there, but that's not, that's not the kind of company we want to put in the series. Companies that can execute people that have overcome a lot to get where they are. People that we think will show well in the series.
- [17:19]
B
Why do you think that corporations should include some charity or philanthropy into their business?
- [17:27]
A
You know, that's a good question. I've thought a little bit about this lately, and I don't know that every business needs to or should have some kind of charitable component. My personal thought is that that's a very personal concept. Now, you're somebody who's incredibly passionate and committed to giving back, and I admire that about you. I don't know that every founder that runs a business necessarily needs to have that, but I think it does make sense for certain businesses. We are in talks with a company. It's a hot sauce company. It's a cool company. It's called the crippling company. The founder of the business is a young guy's kid, really. His name is Drew, and he suffers from cerebral palsy and he's in a wheelchair. And he has not let that stop him. So Drew wanted to start a business when he was in high school, I think he was a senior, and he was in a business class competition. And he told his professor he had an idea to start a hot sauce company and it was going to be the next big thing. And his professor said, this is unrealistic, and gave the kid a B minus. That was his inspiration to start the crippling company. He's making fun of himself. He's calling himself a cripple, a crippling company. And the names of the hot sauces are similarly funny and have humor. Anyways, he took $3,000 he had saved up, started the business, and they'll hit $5 million in sales this year.
- [18:52]
B
What?
- [18:51]
A
5 million? They've sold over 400,000 bottles of hot sauce, the crippling company. And 5% of the revenues of this business go to a cerebral palsy foundation.
- [19:05]
B
Great.
- [19:05]
A
And so I think that for his business, that makes sense, and maybe for another business, it makes sense. So I think it really comes down to the founder. Who is the founder? What are they passionate about? Do they think it's appropriate to give back? And maybe they can.
- [19:21]
B
So in every episode, I ask this question, and I've never gotten the same answer. Darren Marble, you have multiple children and you're involved in a lot of companies. You have equity in a lot of companies. And over the years, you may accumulate tens of millions, hundreds of millions. Who knows, maybe even billions of dollars that Darren Marble accumulated Accumulates over the course of time. Going public, Season 74. What percentage do you leave to those kids?
- [19:48]
A
Wow, that's a good question. I don't know that I have the right answer at this moment, but what I'll say is that there is no right answer. You know, I'm a guy that's in my early 40s. I'm 44. I've been doing this for a hot minute. You and I have known each other for 10 years. Just now in my mid-40s, my businesses are starting to really take off. It's starting to really get exciting in terms of the execution, the tangible results. And there's maybe some wealth accumulation just now starting to happen. And I've spent 20 years of my life to get to the moment where it's just now getting exciting. It's been 20 years, grinding, failing. I don't know if you know all the details, but I've been hacked, stalked, sued, extorted along the way. I know some of those you can relate to, maybe others not. Anyways, it's been a long journey. I don't want my children to come into a world in the future. If these companies are big success, which I hope they are, for my sake, my investor's sake, my family's sake, I would never imagine just laying it out for my children where they don't know the value of hard work.
- [21:02]
B
Here's $70 million.
- [21:03]
A
Yeah, and maybe that's old school, but, like, you know, I think there's, there's, there's value in learning how to commit to something for many, many years and to work hard for many, many years. And we live in an era where there's a lot of younger people that maybe don't have the work ethic of you or me. Different generations, different time. But I think personally, it's really important to instill a work ethic in my kids. So at minimum, they're going to be working and they're going to learn, and I don't care what they do. Maybe they can serve fries, maybe they can do something else, but, you know, they need to be working and learning and kind of earning their keep over time.
- [21:47]
B
Where can people find you? Find the TV show. Find Issuance. Walk us through the things you talked about. Where can people find it on social?
- [21:52]
A
You can watch the Going public series on goingpublic.com if you're looking to raise capital and you've got a massive community, you should check out issuance.com. find me on Twitter aaronmarble. And this was awesome. It's a real treat to be in here with you, Dee.
- [22:05]
B
So, as you guys know, I've been keeping this commercial free for over a year and a half now. We've done nearly a hundred episodes and we stayed in the top five on both business and entrepreneur category for, you know, was it 90 something weeks in a row. And it's up to you guys, you know, your support to like comment, subscribe and share is what keeps us going and what is what drives us. You going to themoneymondays.com and watching and supporting there and sharing that all those things are more important. But ultimately the whole goal of the show is for you guys to have these discussions about money. You have to talk about credit and bank accounts and salary and loaning money and borrowing and leases. All those things are part of your real life. It is not rude to talk about money. 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. Schools aren't teaching it, unfortunately, and even the Internet is just slowly starting to do it now and not enough people are getting to learn the information to have these blunt discussions. And that's part of why I think the podcast is doing so well. So if you can check out everything that Darren talked about from issuance, going public.com/ cetera, visit us@themoneymondays.com and we'll see you guys next Monday.