Investor strategy call, October 4th
Speaker1: [00:00:22] All right. Natu Myers here. Just getting set it up for the call. I see Todd is here. Just a few moments where I get set up on my side. All right. Yeah. All ready to go here. So, yeah, so welcome everyone. Looks like just a small one. So, yeah, the standard Q&A process. Just some quick house rules. Yeah, just a knee in a Zoom chat. If you have any questions, just raise your hand or just being in the chat if you have a question. Yeah, then we’ll bring you up to the panel to discuss. Sometimes people also have some interesting insights here as well. And if there are any insights questions about anyone’s particular capital region, we address them right here. So. So, Todd, it looks like you came in first. So sometimes what happens? People just discuss. But if you have a particular question, we can address it right here. So. All right. So standby letter of credit. So the most potential capital partners require a standby letter of credits to fund deals. So some of them do, like our CFA isn’t able to make this call because of Canadian Thanksgiving. But what happens is, I believe Clem. Yeah, Richard, Ken’s and Clem. I mean, they look at the last time I discussed, they looked at that as something that they would be able to fund with the spells C and.
Speaker1: [00:03:08] You know, yeah, many of them would treat that as cash because, you know, there’s some family office or some institutions that treat that as cash, and then they would be able to leverage that. But it depends on the type of transaction you’re looking for. So I mean, if it’s if this is a transaction that is like, you know, one of those debt transactions and you know, and it’s typical like the typical down payments, then then they may they may ask for either cash or skin in the game or sponsor, equity sponsor or money in some accounts. In that sense. So I hope to answer the question. It was kind of a more of a broad one, but I hope to answer that one. So. Ok, got it, got it. Yeah, I mean, because we had yeah, because we had somebody that I think one of our reps actually was speaking to somebody with an SPLC because as long as they have that, then yeah, they can leverage that as pretty typical. Seventy five percent LTV. Typical what? I think it’s 60 to 90 day terms and all that good stuff.
[00:04:15] Good to hear.
Speaker1: [00:04:21] Yep, no worries, no worries, obviously, if you have anything else, let us know as well. I’m sorry. All right, let’s see a few people here as well. Colts Efrain use House in exchange Walker as well, so obviously anyone have any questions. Just let us know. We don’t have all of our people because we’re on Canadian Thanksgiving, but just any any questions. We’ll walk through everything. All right, I see Kenneth has joined as well. Thank you, thank you. America hasn’t stopped going, so we’re still going. You know, always what we like to do in between questions, we just we always just wait like five to 10 minutes, so there’s no rush, but anyone who’s working on a transaction, you can walk through it and see what’s really the next ball, next question or anything and go from there. And as soon as raise your hand or ping in the chest, anything in the chat and then you will take over the case. All right. Welcome. Ok. So I believe you can unmute if you like. You don’t have you don’t have to unmute if you don’t want to, but if you have any any thing to add any question like feel free. So. All right, cool. It looks like maybe, OK, there we go. Can you hear me? Yes, I can. How are you doing today, OK?
Speaker2: [00:06:45] Yeah. Wanted to know why it’s so difficult for startups or minority startups to get capital? Why is it? I mean, is it simply just boil down to simply race? And that’s the end of it? Or is this some component that we fail to to address to take us over the top? You can’t be.
Speaker1: [00:07:12] Yeah, no. I’m picking up where you’re putting down. So. Ok. So why is it so hard for minority owned startups to raise capital? That’s the question. So I mean. I mean, I think I think a few things, I think there are a few things going on here. Some, you know, something like I’m really there are a lot of forces here, but is there a particular sector that you’re talking about or are you just talking to industry agnostic, any company that hasn’t generated any revenue
Speaker2: [00:07:45] Or real estate development? I mean, really? Ok, go ahead.
Speaker1: [00:07:51] No, no
Speaker2: [00:07:55] Real estate development. You know, it’s it’s almost as though you not only have to demonstrate what you’re doing, how you’re doing it, when you’re going to do it, and then you have to borrow, beg and steal as much money as you can before you go into the marketplace to look for to complete your your projects. And then even after you have a fabulous track record, there’s still more hurdles for you to jump if notwithstanding that much higher interest rate to conclude the business you copy.
Speaker1: [00:08:38] Yeah. And so that’s been an one thing from my perspective. Yeah, I can address that. So I mean, just one thing from my perspective, it sounds like it sounds like you’re talking mainly about the United States. Yeah. You know. Yes. Yeah, you know, because I approached these transactions more as somebody who’s kind of taken a step back and then I help people do it, industry and industry agnostic way. And then if I dive down to one industry, then it’s another conversation. So the answer is. I think there are a few things going on, because obviously things things are a bit more overt in terms of rate, like when it comes to if you want to talk about race and things like that. But then but then you know, I don’t really I have a different experience than a lot of people as well. And there’s also a lot of forces at play, right? There’s also the idea of the idea of it’s a balance because there’s also the confirmation bias thing, because when people see things that are unjust and so on, and then I mean, it can it can kind of like it can kind of affect us, our expectations too. And then we can see greater biases that exist. Either they exist in it and then it multiplies like our like our lack of confidence and then it’s just like a negative feedback loop, right? So right is this.
Speaker1: [00:10:04] My point is like, I think it takes like a few things it takes obviously having to obviously in the context of what you see and working twice as hard. Another thing is looking at being hyper self-aware and looking at, OK, what really? You know what really is the amount of because if something is like, Oh, this is going to be twice as hard, so then OK, then it deals are going to be twice as good, then it should neutralize it because it typically is typically harder to change environmental factors and laws and government lives and people’s opinions. You know, if if we just take control what we can control, so to speak, that makes sense. So the quick answer is, yeah, you know, the quick answer is that and it’s just looking at, OK, could this be split testing of somebody else or what or in other ways, like what type of press releases take advantage over these facts and how can I use it for business purposes? That’s something else that could help. And then you go into politics, which I like to stay away from. But if it’s something you can leverage to be able to get the eyeballs that you need, then yeah, I think the press releases can put you into that right light so you can attract the right type of eyeballs who are willing to make connections, if that makes any sense.
Speaker2: [00:11:26] Yeah, I understand. I understand what you’re saying. Ok. All right. Mm hmm.
Speaker1: [00:11:35] All right, cool. Any anything else, sir.
Speaker2: [00:11:39] No, I’m just going to stand here and wait for no opportunity for my brain to wake up and then continue that beautiful somebody else. Go ahead.
Speaker1: [00:11:51] Beautiful, beautiful. Cheers. All right. Anyone else see a friend and see colts? Kind of, I know that kind of thing working on a lot as well. I’ll just wait a few minutes in case anyone has any other questions, their thoughts or ideas. All right. What are the advantages of using the special purpose vehicle? Is there any are there any specific scenarios where an SPV structure works the best? Yeah. Yeah, so that’s an interesting question. I guess one of the tenants, one of the things that we’ve seen that gets the results the quickest is is outcomes. Razor an appliance in transactions is whenever there is an opportunity for something to go towards complexity, then it just is. This more reasons for investors, broadly speaking, to have objections. So unless there is something that is required for the SPV to be in the deal, then we will put the SPV in a deal, for example, some sort of tax incentive or some sort of cross jurisdiction thing that can make the investment make more money because that’s what we’ve seen actually gets passed. All those emails and those calls is if if it’s if it’s something that is absolutely required to enhance the value and offer of the investment. So in terms of specific, if you can help me dive into some specific scenarios, our CFA wasn’t on the call today because we have a Canadian Thanksgiving. But if you can help me understand some specifics about the scenario, then it would help me understand it.
Speaker1: [00:14:07] But generally, the answer, in my opinion, is if there is a need for some, if there’s anything that takes you away from simplicity when you’re presenting the transaction, I advise to go away from it unless it can actually, unless it’s absolutely required to enhance the returns of the investor or address any investor objections. Yeah, no worries, no worries. And as specific as I can make it, but yeah, I mean, unless like it’s a real pressing thing that has to happen for either like either some sort of. You know, cross jurisdictional cross jurisdictional laws or. But I would have to see the scenarios because I don’t have two scenarios in the top of my head, so no worries. And one corporate entity. Got it. Yeah, it definitely definitely depends. I’m just a fan of just making sure that the investor like like when sending things out to the investors, just anything to make them not say no. So anything so I’m like, the more things that are there, the more reasons that they have to say no. And there’s less because people, people just have limited energy and that’s the only thing that we know. So as long as like, there’s less less is more. That’s what I’ve seen. So. And obviously, there can be situations where where it makes sense to and where you can enhance, you can enhance the deal. I just have to see the situation and I can’t think of it on the top of my head, just from memory myself.
Speaker1: [00:16:05] So. All right, a few more people joined. Yeah. Obviously, any questions feel free to chime in. Yeah, no worries, no worries. So, I mean, a lot of these things seem to just be tools, it’s like it’s kind of like SPACs. They seem to just be tools. It’s kind of it reminds me of like either SPACs or even NFTs or or anything because they seem to be tools to enhance returns, really. And then if the return could be enhanced or tax laws could be enhanced, then. Then I would bring it in. Yes. Again, if anyone has any any questions, comments, ideas. Yeah, just raise your hand or send a message and then we’ll bring you up. Oh, the different types, different types, that’s a really good question. To be honest, I’m not, I’m not even sure off of memory. Yeah, that’s that’s a ticket that we’ll have to give this matter for him to answer. So in regards to the types of explosives, I personally don’t know if memory so that one was added tickets. And it’s a matter, and then it will get him to send your reply via email, because that’s a good question. So. We’re obviously, if anyone else here knows you feel free to share as well. All right. Just stand by for five, too. We have some of the reasons. Oh, ready to talk. Hello. I didn’t.
Speaker3: [00:20:05] Hey, hey, how are you doing?
Speaker1: [00:20:07] Yeah, going well. Definitely learning a lot and things are growing here. How’s it going with you?
Speaker3: [00:20:15] Uh, well, not, but I thank you for your email yesterday, that was very, very that’s very, very good. I I hope you send my response, right?
Speaker1: [00:20:32] Yeah, no, of course, and yeah, we figure because I mean, people are going to start researching you and it is just anything that could be,
Speaker3: [00:20:42] You know, so I’m not sure if you have the time, I would have shared my screen with you.
Speaker1: [00:20:48] Yeah, yeah, sure. Let’s bring you two panelists. And you’ll make your rejoin. Sorry, I believe you should be able to share the screen now.
Speaker3: [00:21:07] Let me know if I’m wrong. No, he is disabled.
Speaker1: [00:21:11] Ok, let me. Change that. Some more. Such stops here. All panelists. There we go. I think you should be able to share now.
Speaker3: [00:21:37] Ok. You said this growing up.
Speaker1: [00:21:49] Yes, again.
Speaker3: [00:21:51] Ok, so this was been this is not open to the public, but this is what’s keeping us. Yeah, it’s not. We’re supposed to be it. So what I’m thinking is I just want to have your idea or your opinion on this is to take down the service aspect of it and just leave the investment part on it. And so that people can use as a landing page if they want to do any research or know where to go to find out more about the deal.
Speaker1: [00:22:23] Got it. I definitely agree. Yeah, because I think if you reduce it down to one call to action and then then we have that focus, right? Because if we have multiple culture actions and when is this going to overwhelm the other? Yeah. Because I mean, I mean, if you have something where it’s like, oh, like I used to have a bunch of pages where we fed adds to it, it’s like, Oh, if you’re an investor or you’re a deal. But what happens is that ninety nine percent of people just go to your deal and then people that go to you and then they’re really just deals. So this probably action is the best, I think.
Speaker3: [00:23:03] Ok, so just take down like they just leave it on the investment side of it. Ok.
Speaker1: [00:23:08] Yeah, I think so.
Speaker3: [00:23:10] Ok, I’ll make that happen in the next. The next few days, I’m off to Edmonton tomorrow for the due diligence, so I I’ll be able to take some videos that are so good.
Speaker1: [00:23:26] No, it sounds good, sounds good. What what is the primary is a primary, so let’s let’s look at the future transactions. Would they all be in Edmonton or is it because I know you had a lot of different places?
Speaker3: [00:23:39] If not, I’ll be in Edmonton, Edmonton, Calgary, B.C. As you know, it just doesn’t make sense here. So Ontario is going to be one of it. The market you’re looking at, definitely, but it’s just too pretty. It’s not for small boys like myself to yeah, it’s for the big boys.
Speaker1: [00:24:01] Oh yeah, just the whole competition in the market and all that.
Speaker3: [00:24:05] Yeah, the corporate doesn’t make sense. The top rate is about two two percent or less than two percent. So I only have a rent control. You can increase your rent by more than two point five percent per annum. So if your experience is going up by, say, five percent, how do you marry that? How do you manage that? So you must have a very big operation so you can actually use economical scale to actually manage that. But if a small firm like ours sells, that’s low skill. That’s not a fundamental skill that we can leverage on the back of that. So it’s not where we want to play right now. When it comes to B.C., but Ontario, yet the sub of Ontario, I maintain what makes sense. They want to make sense, which is one of the reasons why we just looking at Edmonton and Calgary right now. That’s where those numbers make sense in Calgary, Edmonton to see how at least reasonable cap rates for what we look at is four four four four percent corporate minimum. And that’s not based on OS. I mean, that’s not based on the brochure. It’s based on the OS got it because it’s always important. If you look at the brochure, you probably see five percent corporate by the time you get out to the numbers, look at it or realize that the top rate is actually about two percent or three percent. So that’s why we don’t we are not looking at B.C. right now anyways.
Speaker1: [00:25:38] Understood. So. And just so I understand it so fully like, is it because you’re a bit concerned about the the high cap rate that there’s not a lot of stability there? Is that really the concern? That’s why your
Speaker3: [00:25:51] Mentioning is low. No, it’s not high, but lower. Corporate investment is very low. It’s about two percent or less. So valuations is crazy. I don’t know why the valuation spreads, so it probably is. I’ll buy in Edmonton for five million. I’ll probably be talking about 50 million in B.C.. Yeah. So it probably of 44, you know, we’re looking at right now in B.C. is probably going to be about 50 million.
Speaker1: [00:26:21] Ok, not bad.
Speaker3: [00:26:23] And see, that is huge. It’s essentially have skill if you don’t have skill, the company in B.C..
Speaker1: [00:26:33] Scott, and when you say scale. Can you elaborate on that so you get it by basically you mean being able to get a better deal?
Speaker3: [00:26:40] Yeah. So for instance, the likes of Brookfield Company B.C., because they’ve got a capacity, they’ve got, you know, there’s economical scale they can always leverage. Maybe they have about 1000 or 2000 units. So if they’re spread across, they can spread the cost across. All right. Yeah. Yeah, that was somebody that I just 50 units. I mean, you can compare that there’s no way you want to spread the cost. Right? So that’s why it’s very difficult.
Speaker1: [00:27:10] Yeah, this concentration of risk.
Speaker3: [00:27:12] Yeah, it is. And you need to have. I think it’s all about a game of numbers, so if I have two thousand units like said, Brookfield has two thousand unit, I have 50 units you can set up. Brookfield can play in this market. I cannot play in this market. They can spread their cost across. They can negotiate a better deal. You know, they can go to Typekit one, negotiate a better deal when it comes to logistics. They can’t. They have the capacity to do a lot of negotiation and get a lot of discount for a small. The family, we don’t have that skill, so we don’t even have that leverage to go to anybody to have that kind of discussion. Yeah, it property management company, you can’t because you have a big number of big number of units. You could actually typically have five kids, four percent management fee because if the number is is if you have about two two thousand units, you negotiate maybe to two point five or three, and the property management company would agree with you because it could Cisco. They are not managing 50 unit, they’re managing two thousand units and they are fees tied to that revenue that’s coming from the rental that’s coming from that.
Speaker1: [00:28:42] Ok, yeah. This just looks like it looks like competition in the sense. Like, I mean, is this because they’re like, Oh, Weisheit talks to X person when when white person already has, you know, they can take a risk on a deals and and they already have, quote unquote the the whole track record arguments and all of that.
Speaker3: [00:29:01] So yeah, and that’s another thing. And that’s a thing. But the track record? Yeah, I agree with that. But sometimes it gives us there’s a lot of feeder company that has a track record that I mean, I’ve had discussions and I know that that comes with a lot of hidden fees.
Speaker1: [00:29:29] Oh yeah.
Speaker3: [00:29:33] It comes with a lot of editing fees for small guys like ourselves. We want to open the books. We want to create credibility in the market, right? Compared to someone who has already gotten the name right? Ok. Yeah. Is that market is not. It’s not. It’s not investors market. It’s that market. Oh, you’re looking for big names. It’s like trying to deal with any of the accounting firm. Right? You’re going to TWC. You’re going to pay the price for be TWC and see what your brand name is a brand new that you’re trying to deal with. So you’re trying to deal with BD. There’s a big real estate construction company here called BD in in B.C. it’s a big name. They if they get if they want to get a construction permit, it’s going to take them maybe two months. But somebody like me or yourselves that don’t have that brand name, that it’s probably going to take us six months to a year to even get it. So everything comes with the truck, right? Comes with the name in the market. Say, OK, yeah, it’s been the market for 20 years, 30 years and all of that.
Speaker1: [00:30:45] So yeah, yeah, I mean, it’s like an investment bank saying, Listen, I’m going to charge you two hundred grand because of my newsletter will go on and people will pay all day, right?
Speaker3: [00:30:54] And yeah, absolutely right.
Speaker1: [00:30:57] Because they’re like, Oh, you don’t get the deal done. So I might as well do it. I’ve seen it. But so it’s kind of
Speaker3: [00:31:04] You have to increase your asked at that point if you’re going to pay your 200k, you may as well as 400 million or 200 million. Yeah, at least you’re paying for it.
Speaker1: [00:31:18] Yeah, yeah. But I mean, there’s there’s always going to be like, I think there’ll always be some advantages like because I see what I see people do is, oh, it seems to have something, but what I always see people do, they always take advantage over their off their small position, right? Because like a lot of people that are small, they can do things at the big guys can’t. And then that’s a strategic advantage because they don’t have Edmonton, you know, an end to, you know, like if you’re looking at Edmonton, people are like, Oh, why would I go there? But then now you have the extra time to go in there and then get those deals and people aren’t looking at. And then if you were to do that, then you can establish another niche in those places, right?
Speaker3: [00:31:57] So, yeah, yeah, absolutely. But same thing. You want to avoid concentration or risk. Yeah, that’s why we don’t just want to focus on Edmonton and Calgary, but to diversify and do that on target as well. Yeah.
Speaker1: [00:32:14] Fair enough. Ok. And then sandy to send it. So then the the URL raises a com slash attendee. If that’s OK, we will send it to the races or.
Speaker3: [00:32:26] Let me let me get back to you on this. I’m having the the developer finish up on this so I can get back to you in two days on this. Perfect. We’re all on the same page. And so that you guys can’t even give me a feedback if you have any feedback on it and we can tweak it before putting it in life.
Speaker1: [00:32:48] Perfect. Yeah, no. Sounds good and I think just being top of my head. I think just collecting emails as quickly as possible, because the thing is like a lot of the disclosures. You can’t publicly say or the terms or anything like that. But if you were to just get their emails quickly as you can and then if they like, agree, if they agree, it’s like, Oh, by answering your emailing, you agree that you’re accredited investor in Canada or whatever. And then they make sure that they legally, you know, have it so that they agree to it, then just send them the terms because they they said that they they represented that they’re accredited investors. Yeah. And I see you have a lawyer. Look over it. But that’s what a lot of these people do. And then before you even look at the website, if you really want to be really strict, you can say before you even look at the website, you’re an accredited investor. If not, get out like if you want to be really strict. So you’re not talking to anyone, anyone who doesn’t have money and then who you’re talking to or on your email list are people that have money. And then the rest can just get out like if you really want to just.
Speaker3: [00:33:51] Yeah, absolutely. Ok, yeah, that sounds good. Thanks.
Speaker1: [00:33:57] Yeah, no worries. No worries. Looking forward for this one. So. All right. So I see Colt’s hand is raised. Allow you to talk.
Speaker4: [00:34:12] Hey, can you hear me?
Speaker1: [00:34:14] Yes, I can. How are you doing today?
Speaker4: [00:34:16] I’m doing great. Thank you. I’m a little bit behind on the orientations. I haven’t really got into it, but an opportunity came across my path and there’s other people working on the opportunity. So I’m just kind of what I thought I’d do is ask you on how quickly these kind of deals can get funded. So UFC gyms in UK is offering 50 one percent stake equity to open up opening more gyms, and they’re looking for eleven point five million pounds for that 51 percent stake. And they have a mandate set to open up one hundred and five clubs over the next 12 years. So this this is here for an opportunity for four clubs, but I think it’s going to be a continuous kind of growth thing. And yeah, so I don’t I wasn’t quite sure about these kind of equity deals if. And it’s a franchisee with the franchisee, so and a management team will be the other forty nine percent. So I was wondering, do you know if this is as a a long process to fund these type of deals or is this a good one for raises?
Speaker1: [00:35:32] I think this one and I saw this one earlier, so I think this one is and they have obviously they have all these subscription documents ready to have all that ready. Is this to make those introductions right?
Speaker4: [00:35:44] I think so. Yeah, I have quite quite a good. Cited documents they sent me over here. I haven’t said anything up inside the the res ask.com or anything like that, but I do have my stuff ready to go here. Yeah. I’m not sure what you meant to what document you’re looking for, exactly.
Speaker1: [00:36:04] Oh no. Just because when people offer equity, it’s just like like if the it sounds like it sounds like the term sheet and place investor signed the check and all that sounds like that’s ready. It’s basically the question.
Speaker4: [00:36:16] Yeah. The guy I’m working with. He’s quite good at moving these things along. And he said last time they came to him, he had it funded in five days or something. So that’s why I’m kind of in a rush, but I think they must have that. I would think that he has it ready. So it’s his deal and I’m bringing it to like into here. So me and him will be partners if I can fund it through here. But yeah, so I’m going to I can put a lot of time into preparing this, but I didn’t want to get through the whole process and then find out it’s going to be another few months because I’m quite busy right at this moment, so. Yeah, so got it,
Speaker1: [00:36:57] Got it, so OK. The name is there, you have seen it, so the name, but then how is the revenue? So then they want to open up. So it’s kind of. So are you saying it’s something like it’s like it’s like anytime fitness or like one of these things where there’s no revenue yet, but like the revenue, like when when they invest four to fifty one percent, they had ownership in the gym and then they have to then get it already and then they make revenue afterwards. Is that really the. Is that the offer?
Speaker4: [00:37:30] Yeah. So here are distribution of proceeds in cash flow, and proceeds from exit will be dealt with in the following manner. I think that’s the plan here is to build an exit. Twenty five percent returned to equity partner. It’s fifty one to forty nine split with nine above that threshold. And then franchising waterfall excess cash flow to be used to fund a development of corporate clubs. Once corporate clubs are built, distribution as follows one million pounds paid back to management returns of original investment. Top up equity partner of twenty five percent return is not achieved from corporate clubs. Top up if twenty five percent is not achieved from corporate clubs and then fifty one forty nine split four remaining proceeds. Then then below that is categorised as return here. For the following proceeds that go to the equity partner, the equity partner will receive the following 20 percent preferred return on invested dollars 50 50 split up proceeds, with the company above that threshold assuming an exit at the end of five years within eight times multiple corporate club’s equity investor will receive thirty six point six million pounds at a three point eighteen times mom and a twenty six percent return.
Speaker1: [00:39:01] I’ve got two men in my life. No, I’m thinking, in my opinion, if the UFC logo wasn’t swept under, I’d see and I could be wrong. But just based on the quick, I mean, if the UFC logo was a satyendra, I wouldn’t say it’s something that would be overnight. I mean, I mean, because. You know, and this is why, you know, unfortunately, we couldn’t get the CFA on the call because of Canadian Thanksgiving, but you know, is this because I mean, it’s not like, I mean, the cash flows I’m hearing development and then the cash flow. Doesn’t sound like it’s there right now. That’s the only thing. But no, that’s but then we have a few people that so first, we have a few people we can introduce to to start with. And then have you gotten any traction just from the quick post as I made a quick post, any traction there or shall we make the how one person
Speaker4: [00:39:50] Did reach out to me, actually? And he said that he could try to start fundraising for it. But I think that’s my job at this point. So yeah, that’s kind of all I have at the moment.
Speaker1: [00:40:02] Got it. So tell you what to commence at least one introduction just to feel what the feedback is from somebody who actually has a job to actually put the wire in and all that. So we’ll make that introduction. And then in terms of, I think I can show you the screen if you like. But I think the ultimate way would be to the financial analyst is more prudent that picking up all these things that I may have missed. But I think that if not for the U.S., I don’t think it’s something that’s overnight, in my opinion. But the only way to tell it would be to 100 percent. It would be to hit the markets for people who. And is this so I’m here in pounds? So where is this offering based?
Speaker4: [00:40:47] Ok, so this is in the U.K., OK? And just second here, seeking eleven point five million pounds of common equity to acquire a 51 percent stake in UFC Gym U.K.. So I don’t the way they say that sounds like it might include the existing stuff in here.
Speaker1: [00:41:16] I think that’s why
Speaker4: [00:41:17] It sounds like a pretty nice it sounds like a pretty nice thing to be a part of, though.
Speaker1: [00:41:23] Oh well, yeah, obviously the UFC. I mean, I think that’s the deal, to be honest, but I think I think that’s critical if we if we know that that is part of something existing. I think that’s critical. And other than that, honestly, the quick process, so I know you haven’t been through some of the details, but. And yeah, the quick process. We have a team of people that can get ready to send it out. They just got healed of coronavirus and so they’re ready to go. So where are they? Besides that, besides using the team just going direct, I just hit private equity, just a few feelers. Private Equity Europe and UK share the screen. Yeah. So this one, this one is in, we’ll make we’ll make one introduction, at least just so we can get some feedback. So then the. So in here, so number three, the number four. Right here and I know just massive databases, private equity. My private equity. This private equity, and then I’ll just I’ll just start with anyone, anyone UK that would start their. Ok. Just initial feedback. So that’s the first that’s the first one I would start with. And besides that, I think it’s I think it’s something where somebody has to already be in some gyms like somebody already has to be into fitness or gyms or they have to be in select markets. So when do
Speaker4: [00:43:14] You know, management? So the manager is Eric, into his fifth decade of fitness industry, having started back in nineteen seventy nine and the first franchise for Gold’s Gym? So it’s a good manager that’s coming in. So I think you’re just putting money in and then they’re going to just take it and run.
Speaker1: [00:43:31] Oh, OK. Ok, so it doesn’t have to be specific. Ok, got it.
Speaker4: [00:43:35] It seems like it’s pretty easy for the investor.
Speaker1: [00:43:40] Got it. Ok, so the number one way would be just to. Based on that, we want to talk about timeline. Then we have to look at KPIs and. I really I really think that this sheet is critical just so we can, because as as the thing is being sent out, we can just we can just reverse engineer like what has been sent out, what is really the progress here. So this is probably the best way for us to say, OK, here’s the here’s you can show your partner it’s something like this and just say, Hey, listen, we sent this this out. Here’s what we can expect based on what responses we’re getting. That’s the that’s the the ultimate way, I think, to see like, OK, what is what’s going to happen here?
Speaker4: [00:44:25] Yeah. Yeah, that would definitely build some credibility. I like that so.
Speaker1: [00:44:30] Got it. Yeah, it started there and then just at least five names to get it out. And then if the feedback and how are you actually presenting the information, you present everything at once, like if you were to find a prospective context or how does that play
Speaker4: [00:44:43] Out for you? So the person who gave it to me didn’t have me sign anything. He just sent it over. I don’t think there’s anything wrong with presenting information to the investor, just like that.
Speaker1: [00:44:59] Ok. Like essentially the whole package and
Speaker4: [00:45:02] What was that? You think there be a problem with giving the company name and everything? Do you think that my partner who gave this to me is going to get cut out of the deal if I end up giving this to the investor because it says the company name, he could go directly to that company and say, Hey, let’s do it.
Speaker1: [00:45:21] Yeah, well, I mean, it depends on the type of relationship like, I mean, because what investment banks do are people that I’ve seen them do is just to say, Oh, if your partner said, Listen to UFC, we’re not exclusive. We’re exclusively helping you raise capital and all fees that you get from any way that any way possible for this deal are ours to X percent, like eight percent or five percent or whatever it is. If that agreement is in place, then then there, then that’s covered. But then if there’s nothing like that or it’s non-exclusive, then it’s just more of a trust. And then trust is whatever because mutual self-interest is stronger than trust. So then it’s like the win, because then they can just because what can happen, they can act like they’re an investor, but generally they’ll refer to somebody else and then they act like a consultant. And then they can go to the company direct and then they can cut you off the deal. So that risk will be there, you can say. I mean, one thing, one thing you can say like you can you can say UFC. It depends on a few things like if you’re optimizing for speed, then maybe maybe just getting a deal done is more important, but then it’s the money, right? But then if you’re if you’re like, if you just want to cover yourself, I just say, Oh, I just redact anything about specific addresses. I just block it out or move it from the UFC, UK, UFC, UK. And that’s what investment banks do when they send it out. And they don’t say the UFC, they don’t see the company name, usually don’t see Project Project Alpha or whatever. But and because the UFC is like the primary selling points of the deal, then it would make sense and just stay somewhere in a U.K., UFC or somewhere in Europe, UFC. And then it’s like, Oh, let’s have a call. And then after the call, then send me or send me the info. Then you sign the NDA. It’s a typical it’s a standard process.
Speaker4: [00:47:14] Ok. Yeah, that sounds fine. I could I could redact some things in here and then that would be I’d be comfortable with that.
Speaker1: [00:47:22] Yeah. It protects. It protects you. Definitely, because like investors, they don’t care about the guy in the middle, they want to go right to the dealer.
Speaker4: [00:47:31] So yeah, I’ve already been cut out of a deal before.
Speaker1: [00:47:35] Yeah. So that’s a problem.
Speaker4: [00:47:38] Ok. Yeah.
Speaker1: [00:47:40] Cool. So I mean, yeah, feel free to. I mean, if you like, feel free to send it to us, if you if you if you if you want feedback from us. But then really what’s more important is get in the market and then we’ll point you to where to hit in the market and we’ll make an introduction to get initial feedback. And then for in terms of when people will do it, equity moves slower than debts. And by the way, it sounds like I don’t know. Exactly. And by the way, it sounds I don’t know if they’re getting an ownership stake in the cash flowing properties already. And then you have this chronic thing that is still lingering and then Jim’s there in corona thing. So it’s not for the UFC. I don’t I don’t really see what’s the but maybe I’m wrong. So I just the CFP is better at analyzing the money and then I just go to the market directly.
Speaker4: [00:48:33] Ok. So when you say you can send us like, do you mean I can just show you a message on LinkedIn or something or like, where do I send this to to if you want to take a look at it?
Speaker1: [00:48:45] Yeah, just send it to the support that raises ICOM email because that email goes for a Slack channel and then and then we can assign it to the CFA for him to because he’s actually qualified to actually look at these things and myself. But then that’s the best way.
Speaker4: [00:49:02] And that’s what I’ll do then.
Speaker1: [00:49:03] Nice. Cool. Anything else, any other deals or anything else?
Speaker4: [00:49:10] I’m no, I’m there will be more, but I was kind of pushing it until I just finished my orientation and went on like that, but this is this one. Just jump in.
Speaker1: [00:49:25] Yeah, no worries. No worries. One thing you can do is just kind of like that. Daniel Priestley book. I oversubscribed just to play with all those scarcity triggers, right? I mean, if there’s anything that talks about the, you know, that talks about the constraints that the deal has in terms of timeline, scarcity and urgency, then you can pump that up and just talk about how it may be oversubscribed or how it’s closed by X date. All those scarcity triggers, you would elicit a call because people typically don’t just wire something after they see the email. Typically, they would go to a call and then so then. But then if you pull the put those scarcity triggers in that initial message, then they’ll jump like crazy, especially if it’s UFC. Then you can understand it sounds like something that’s really scarce, to be honest, so that would elicit more calls, for sure.
Speaker4: [00:50:16] Ok, so now if I’m if they want to go onto a call now, I don’t know much more than they do after reading this. Ok, would I be setting up a call with my partner? Would that be more advisable thing to do? Is us all me like that?
Speaker1: [00:50:32] I think it would because. Yeah, because. Or whoever? Yeah, because if your partner is already on duty, yeah, I think it would. It just removes one step. And the less steps that there are in between the initial outreach and the discussion, the less the less reason there is for them to eat or say no for them to get bored, for them to go to something else or for the less steps in between the investor and then the actual principal, the better. So, I mean, ideally in a perfect world, it would be like the UFC guy and then the investor. Then you’re on the call to make sure that they don’t circumvent. I mean, that’s in the perfect world and now being one.
Speaker4: [00:51:10] Yeah. Ok, well, that’s good, that gives me some more to start from. If there was someone that could write one check and get and get it done, then I’m sure that UFC would get on the phone. Maybe so maybe, maybe not the UFC themselves, but the company that owns the gyms here.
Speaker1: [00:51:32] Nice. I mean, that’s maybe that’s another selling points to an initial message. I’m thinking a lot of private equity. I’m thinking a lot of private equity. But then then, yeah, then they’ll start saying, Oh, we want EBA that we want to keep it out. So then that’s the that’s the only that’s the only apprehension I have is just the the existing cash flows like today.
Speaker4: [00:51:58] All right. Ok. Ok, sounds good.
Speaker1: [00:52:04] We’ll get that over to you next business later. Good stuff.
Speaker4: [00:52:08] Thank you. And I’ll send my email to you guys. Do?
Speaker1: [00:52:11] Perfect. Thank you. All right. Ok, so. Yeah, happy to do this as long as they need to, but we have a friend, Kenneth Todd, Eddie and obviously any more questions, I’ll just stand by for a couple of minutes here. You know, any any questions, thoughts or insights, feel free to chime in and we’ll get to every inquiry. Let’s see. Yeah, no worries. Forgot that? Ok, you’re in Canada? I forgot. Me too. Happy Thanksgiving for us. Very good. All right. I think, yeah, I think the room is empty, and so I think this is a good time to stop it. Yeah, this has always supported reasons. Or we could close at on Monday at 6pm p.m. Eastern New York time or Wednesday, 11 a.m. New York time and reasonable commissars community reasons to fund such meats at those times and supported reasons. And that’s how you get help. So thank you everyone for sharing, and we’ll see you in the next. Thanks. No worries.
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