83: Raise Money Without VC: How Crowdfunding Levels the Playing Field
Woodie: [00:00:00] if you're listening to this, your chances of going into a venture capital office and getting capital is about 1% like it. First you have to know them. Then you have to get in the door. Then you have to get the meeting. Then you have to get them to invest. It's nearly impossible. So this shifts the tables. It now puts you in control, allows you to raise money from your customers, So it's really transformed the way in which capital is raised online. and, you know, people can raise up to $5 million a year through this. So, you know, it doesn't matter where you are. just look into your Rolodex and put one of these offerings together, and go out and, you know, try your hand at it.
Paden: Hello everybody. Welcome to Behind Their Success Podcast. I'm Paden Squires, the host, and today we have on Sherwood Niess. Sherwood is a trailblazing entrepreneur and investor who helped write the Crowdfunding exemption framework that became the foundation of the Jobs Act, legalizing equity crowdfunding in the United States. He is a three time [00:01:00] Inc. 500 winner, Ernst and Young entrepreneur of the Year, and co-founder of Crowdfund Capital Advisors. Sherwood's work has empowered startups influenced global policy and transform how entrepreneurs raise capital. Good morning, Woodie, and welcome on Behind their Success.
Woodie: Good morning. It is exciting to be here.
Paden: absolutely. So it's early for you. We, for the listeners, we're recording this, you know,
somewhat early in the morning. He's out in Denver, which is west of me, so it's appreciate him
even getting up a little bit earlier to come on the show.
Woodie: I get up at five every morning, so it's no
Paden: You are ready. Rock and roll. You're two hours in. So Sherwood, you're kind of the, the
guy in crowdfunding or, you know, really we're a part of a lot of getting that possible in the United
States.
Tell us, about you and, crowdfunding in general.
Woodie: Okay. Well the whole concept for crowdfunding really came about when I was running
my prior company called Flavor Rx. We flavored medicines for children, so they're more
compliant. We grew that from one [00:02:00] pharmacy to 40,000. and I would always get these
phone calls from mothers after they got their kids to take medicine saying.
You just solved a massive pain point for me. Like my kid was struggling, they were pushing
back. The doctor was saying, I'm not gonna prescribe another medicine. This is the one that
they need. I can't get it down. I got it down. How do I invest in your business? And I was just like,
you know, you can't, uh, I can only raise money from a accredited investors.
The SEC made these laws in 1933. I realize that doesn't relate to how we raise money today or
how we live our lives online. We ended up selling Flavor X to a private equity group. but after we
sold it, I kept on saying to my friends, boy, that was a missed opportunity. If I could have turned
all of these mothers into investors, which I now call investors, then they would become brand
advocates for the company.
They'd have a vested interest in the company. They'd be out there marketing, bringing more
sales in, helping bring more investors in, it would've been [00:03:00] a win-win, win. and I was
just like, but you know, these laws written in 1933. And so then I didn't have a job. I didn't have
really much to do and I was living in Washington, DC where laws are made.
So I sat down with two friends of mine from Silicon Valley. I. And I said, you know, we've all
raised capital from VCs. What happens if we update these securities laws to the internet age?
Uh, and so we came up with an eight bullet point framework that we socialize with our friends on
Sandhill Road out in California where all the VCs are.
And we said, at what point would we be stepping on your toes if we carved out a new exemption
to allow retail investors to invest in startups? Is it one five 10 million? And they're like 10 million
is outta the question. Five is really pushing it. But if you do one that's okay thinking we wouldn't
get anywhere.
Um, because who create, who creates a law? Alright, so, um, we took this bullet point
framework, we went down to the hill. I. We socialized with the SEC. They thought it was cute.
They said, go over to the building with the white dome naively enough. We walked over there,
we walked the halls of [00:04:00] Congress, you know, bipartisan, uh, Republicans and
Democrats.
The White House actually reached out to us because they heard us speaking at a hearing, uh,
said that they were interested. So Obama came out with a statement of administrative support,
which naively enough I had come, went back to them and said, can you like have a press
release or something that. It really says you're behind this and, and our contact at the White
House was like, you know, this is the, as high as it gets.
Like this is the president saying.
Paden: ask for more.
Woodie: Right. Um, so, uh, president Obama came out, supported it. It was Republican led in
the house. Um, so this was completely bipartisan. It passed the house. 4 0 7 17, it went over to
the Senate. We testified in front of, uh, the Senate banking committee, did all the lobbying
ourselves, and we were at the White House as it launched this industry, which is now a $3 billion
industry used by over 8,000 entrepreneurs in 1200 cities across the United States.
Um, you know, it's, they've raised over $3 billion. Um, and it's just. [00:05:00] Really transform
the way startups can go out and raise capital.
Paden: Yeah. Yeah, that's, that's amazing. I mean, like. You know, you hear stories of people
that, oh, have ideas, or I'm gonna go to Congress and change something. But like I, you know, I
don't know if the listeners or general public even understands how incredibly difficult that can be.
Um, and it's amazing how, you know, I guess you struck a chord and, and one that everybody,
you know, uh, really rallied behind and, you say, you know, bipartisan support, you know.
A lot of things are rare to be bipartisan support. So that's, uh, I mean, that's a, that's an amazing
story there for
Woodie: a couple funny things about it are one, the fact that, uh, we got the VCs to say, you
know, let's do this, sorry.
Paden: You can have that lower market or, or whatnot. Right.
Woodie: you know, if you're, if you're listening to this, your chances of going into a venture
capital office and getting capital is about 1% like it. First you have to know them.
Then you have to get in the door. Then you have to get the [00:06:00] meeting. Then you have
to get them to invest. It's nearly impossible. So this shifts the tables. It now puts you in control,
allows you to raise money from your customers, um, which look like you. The best part about
this is women and minority represent up to 50% of the offerings.
Uh, they're raising capital from other women and minorities. So it's really transformed the way in
which capital is raised online. and, you know, people can raise up to $5 million a year through
this. So, you know, it doesn't matter where you are. Um, just look into your Rolodex and put one
of these offerings together, and go out and, you know, try your hand at it.
Paden: Yeah, that's kind of interesting. you were obviously a massive part of helping getting that
market just kind of all created in the legal framework for that. You know, I kind of had a thought
just pop into my head of like, I'm wondering if the next iteration of that is something along the
line of, you know, blockchain technology and, you know, crypto and that, that kind of world that
allows.
I would say it almost in a way, kind of takes crowdfunding [00:07:00] to a, to another level or a
different level to where not only are you, you know, maybe like an equity investor, but then
you're like actively participating in, but in the business, in in ways. But like, can you speak to that
or do you agree with any of that or?
Woodie: Can I speak to that? I live by what you're saying. So I, you know, I just published a
book, um, called Investers, which is a very, um, academic deep dive into this entire industry. And
the last part of it talks about the future of investment crowdfunding. And I spend a lot of time
talking about. blockchain, crypto, how this will integrate with the metaverse, and how this will all
play a role in the future.
And, uh, so right now the SEC is actively creating rules to allow for the issuance and the trading
of crypto. Okay, now everybody keeps on thinking Bitcoin, but if you're, if you're. Really leaning
into this, you have to think about how companies are going to be able be [00:08:00] issuing
crypto securities. So just instead of a a common stock share, you're gonna get a token that
represents a share of common stock in a private company, and that's going to allow you to have
ownership in these private companies, thousands of them.
All across the United States, there's gonna be value created in these companies, and you'll be
able to trade these tokens on secondary markets. And so the future of this industry is integrating
regulation, like regulation, crowdfunding into the crypto framework for the issuance of these
tokens, and then facilitating secondary trading on what's known as alternative trading systems,
which are private exchanges, much like the New York Stock Exchange.
But it's just a private exchange, and that's where these security tokens will trade.
Paden: Yeah.
you know, learning in the, in the entrepreneur space and, and, and studying about crypto and
different things over, over the years, that's really, I don't think people understand like how. In the
future that is going to allow people to just [00:09:00] participate so much more in, in, in every
pieces of the economy, right?
Where it's not just, um, it democratizes a lot of, economic benefit and allows people to
participate in it, um, in, in a way that we've never been capable necessarily, uh, before as, as
like humanity.
Woodie: I mean, you are preaching everything that I represent. You know, when we went to
Washington DC with this, we said. Uh, you are looking for, this is in 2008. So it, it passed in
2010. Um, I'm, I'm sorry. It was 2008 was a great recession. We went in 2010. It passed in 2012.
but during that time, Washington was looking for jobs and we were like.
If you want a solution to the job crisis, let's invest in the job creators. Those are America's
startups and small businesses. They create the vast majority of jobs in the United States. So if
we can get capital flowing to them, the number one thing that people do with capital tends to be
if they're not buying [00:10:00] inventory, hiring people to help sell products and services.
So this was our solution to that. But the, the benefits go way beyond this. When you're investing
in local companies, you are essentially investing in local economies. One of the things that we
can do, 'cause we built this database that collects information on every single company
collecting money through regulation crowdfunding.
So we see their financials, we see how much they money raise on a daily basis from how many
investors, these like those last two signals do not exist in in the public markets really, or in the
private capital markets. And so we can learn a lot from them. But what you can learn from it is
the economic.
Impact that it's having. So we can see for every dollar that's invested through investment
crowdfunding, it has a 10 x multiplier effect in these local economies. They invest in the
business. The business buys more products and services. It employs people and they
essentially buy more goods and services in that community.
Paden: yeah, you're right. It keeps the money local, right? It keeps it circulating. [00:11:00] Um,
and it is just a very powerful, uh, a model that, like, through blockchain and, and all that
framework that, that, you know, can be a fully ve verifiable, trustless kind of type system. It
allows us to get capital super efficiently into the place.
Places capital is most needed, right? Um, and it's gonna, and, and just by doing that alone, it's
gonna definitely accelerate growth and, you know, hopefully accelerate growth in the areas that,
you know, may not be growing as, as fast as we want, or providing more opportunity to, to
others that don't necessarily get it.
Woodie: That's, yeah. I mean, you know, like I was saying, up to 50% of the people that are
receiving this money are women and, and minorities. They actually, you know, you can't go into
a bank for most of them get a loan. Um, by the way, debt
Paden: it's just overly burdened. I mean, you know what I mean? There's just a lot of stuff that
goes with that. Yeah.
Woodie: This has democratized access to capital where it didn't exist before, and we are really
just at the beginning of this too.
Paden: Yeah. Yeah. Yeah. That's exciting. Just thinking about [00:12:00] where, where the
future of all that's going with blockchain and like you said, the metaverse and gosh, are we all
gonna end up living in tubes? Probably,
Woodie: what's interesting about what you said, going back to the data that we collect is, you
know, when the industry launched, we thought it was gonna be mainly software technology type
companies that are raising capital. Last year, the majority of companies that raised money were
in healthcare, life sciences, and biotech.
So to your, you know, test tube thing, you know, we are actually seeing the future of the
healthcare industry by looking at these companies at the earliest stages that are out there with
the most. Innovative technologies, by the way, that are leveraging AI in many cases to come up
with better, you know, solutions to existing problems.
and we see the future in front of us. You know, that's why we built, uh, an venture capital arm to
what we're doing because we wanted to take all the data, build an algorithm, use AI and
machine learning with that [00:13:00] algorithm to actually identify within the dataset the
companies that are the most promising.
And then. Invest in hundred of them. So our goal with that is to invest in 200 of them, uh, and
hopefully have outsized, you know, returns based on than traditional finance or vc.
Paden: Yeah. Yeah. And that's, that's so exciting with the tools that are, that are coming about
and, and the developments we're seeing, you know, and especially, you know, AI just dump
gasoline on literally everything that's getting developed in the world. It can just all be done
insanely. Much, I don't know, that's a sentence insanely faster than it I used to be able to do.
Um, and even in myself, in my own world, like, with my own companies, I have been
implementing a lot of new tools recently. And, they're game changers. The technology with AI
and being able to service people and, and really make your business great, in all kinds of
different aspects. Um.
It's a really exciting time to be like an entrepreneur or in the entrepreneur space. In, my mind.
Woodie: Oh yeah. I can't even tell you how much we're using [00:14:00] AI all throughout our
day.
Paden: yeah. And it's just like, even the, the most simple thing in my world is like, you know, I
talk to a lot of customers, right? A lot of different clients. I, I work with a lot of different people
and, uh, just the pure fact of. Payden, trying to remember what conversation he had with who
and whomever.
you know, it's all stuck in my head now with today. The tools are everywhere, you know, with,
with AI and whatnot, be able to transcribe and, and anybody, me or anybody on my team, to
quickly know what conversations Peyton has had with somebody, what was said, what wasn't
said, and, and to quickly be caught up from a customer service standpoint.
It's, it's amazing the tools that are out there.
Woodie: Yeah. Yeah. We actually, uh, one of the things that we did, you know, we're very data
focused. Um, so, you know, we wrote the law, we built that database, and we're like, what can
we do with this data? So, the venture fund was one thing, but recently I said, you know, now that
there's, you know, over 8,000 companies that have used this, let's see if we can use AI and
machine learning to [00:15:00] help.
Issuers entrepreneurs figure out how much can they raise through this. So we built this entire
report. It's a 10 page report called the Offering Insight Report, where you can fill out a,
essentially a Form C, which is the document that you would file with the SEC when you wanna
raise money.
We would take those exact inputs, run it through the algorithm, and it prints out a report to tell
you which uh, platform might be right best for you to raise money, how much you can expect to
raise, what your valuation, uh, should probably be given where your growth is and your age and
your revenue. Um, and then we give you a bunch of companies that are in similar industry at
similar comps.
So it works out.
Paden: Yeah. it's so amazing to me. And, and, as a guy that prides himself being on the, you
know, the front edge that, you know, that's an amazing tool, you know, and, and if anybody ain't
listening, you know, is looking to get in the crowd funding space or looking to fund something
else, you know, definitely check that out.
it's just really interesting that, like, even a guy that, you know, I, feel pretty tech forward
[00:16:00] in, in trying to be tech forward. I don't use AI enough and I'm a guy that I, I've gotten
to this point where I feel like I'm constantly on it. if it's not helping you, like day to day almost in
everything you're doing, if you're like on a computer all day long, um, you're not using AI enough
to, get efficiencies and get better at, what you're doing.
and you know, a great tool like that, like you have amazing experts at the tip of your fingers to
ask questions to, of like, how much is my business worth? How much should I, you know, how
should I set all this up on crowdfunding, right?
Woodie: Yeah. And when you have the data, it helps AI work better,
Paden: Oh, yeah, yeah, yeah, for sure.
Woodie: You know, 'cause AI can hallucinate, you know. And, you know, even, even as good as
it's getting right now, we, you know, we, you have to look at everything and then you have to
critique it and tell it where it's wrong. but, you know, it's, it's a partner.
It is not a replacement, that's for sure. I.
Paden: Yeah, correct. Yeah. And, [00:17:00] especially with, depending on the type of the
business you're in, you know, the human touch, um, is, is certainly significant there as well, uh,
especially in my line of business, but you know, kind of took turn into maybe, maybe some of our
listeners here, you know, for, some of the listeners here that might be considering crowdfunding,
you know, as, as a strategy, what's, you know, what are some of the most common mistakes
you see them make?
and what's just. Maybe some general advice for 'em if they're, they're kind of considering and,
and going down that path.
Woodie: The number one mistake with crowdfunding is you cannot crowdfund without a crowd,
so you need to have your community before you go out and raise money. Um, this is not a
fishing expedition. You're not throwing a big net into a pond and pulling in a bunch of investors.
You are actually taking the people that follow you and you've socialized the idea that you need
money, uh, and why you need money with them.
And then you put one of these offerings together and then you went back to them and said. I
need you actually in the [00:18:00] first, um, actually before your even offering goes live, this is
another golden tip. You know, soft circle is what we call it. You need to soft circle about 30% of
what you wanna raise. Um, so you need to go to the people that have the deepest pockets and
be like, listen, I wanna raise money.
You think you're in, how much do you think you'd be in for? And then come up with that number
and say, listen, when I launch, I need you to come in right away. Those are the most successful
campaigns, the one that come out of the gate with 30% because nobody wants to be the first
person on the
Paden: Yeah, yeah,
Woodie: and investors follow other investors.
So you, you wanna make that scene. the other thing is communication. Communication. I.
Communication. You probably hear it in your personal lives with your spouses. You probably
hear it if you're a boss, how it's important with your employees. Um, it is critically important with
your investors. The more transparent and communicative you are with your either per, you know.
Investors to be, or investors that [00:19:00] you have on the cap table, the more engaged they
will be and the more that they will be, putting in. so you wanna be communicating with them the
entire time that you have your offering up. People can ask questions and you want to answer
those questions on there.
So that's really important. And the third thing I would say is get your valuation right. you know,
there's debt crowdfunding and there's equity crowdfunding. So if you're a small business and
you just need a hundred thousand dollars and you wanna raise it through your customers, you
know, set your interest rate appropriately.
but if you're doing equity crowdfunding, do not think this is five years ago. I. Where, you know,
cash was flowing freely and people were getting ridiculous valuations. Valuations have come
down and you need to scope them where investors are willing to invest. And, um, here's the
thing. The crowd consists of both very smart, sophisticated, almost venture like investors, and
then your friends, okay?
Your friends, your friends probably don't know what the right valuation is. [00:20:00] Those really
smart people that wanna back your company aren't gonna back it, and they're gonna tell
everyone if your valuation is outta whack. So spend the time getting that right.
Paden: Yeah, yeah. That's great. That's great stuff. And you know, um, great advice there on
that. And you know, that I jump in there and say, is, Anytime you're raising money for somebody,
this isn't to scare a listener or anything, but it's, it's a huge responsibility, right? And, and one you
should definitely not take lightly, um, because you are taking value from somebody that's, that
trusts you and believes in you, and well, you better have your stuff buttoned up.
Um, and, and, and once again, not to scare anybody, to scare anybody away from that, but just
always remember that, you know, that's, that's a huge responsibility
Woodie: Oh yeah, but you know what? Here's the other thing, Caden. Um, if you are on TikTok
and you're scrolling through TikTok at night because that's just how you decompress or
Instagram and you're looking at reels, pay attention to what's happening. You've got these
influencers on it that are [00:21:00] pushing products.
The Dubai viral chocolate. I, you know, I bought into that one. Um, you know, and they are
moving products in a way that we've never seen before. So, traditional Madison Avenue
advertising is the way of the past. if you're listening to this, you've gotta be thinking, how are
millennials getting their information?
How are they living their lives? How are they, you know? Doing things. So you're going to start
to see people that raise money through investment crowdfunding, going to their investor base
saying, I need you as an influencer. I. In my business out there on social media talking about
why you invested in it, why people should buy the product or service, why other people should
invest in the business.
And they're gonna be these, what we call investors. So influencers meet investors on social
media, and it's going to be the future of what we're seeing and the people that win in the space
in the future. You know, we've talked about ai, we've talked about, you know, crypto, um. It's
[00:22:00] also the people that are thinking, how am I going to leverage my crowd now, not just
for their capital, but for their brand advocacy for what I wanna do?
Paden: A hundred percent. And if you're not building a crowd in some fashion, some way, you
should probably start building a crowd.
Woodie: Oh yeah, yeah. get those emails out. Create blog
Paden: list. Yeah. Personal brand. Um, better, better get to work.
Woodie: Yeah.
[00:23:00]
Paden: so on the flip side of that Sure. We kind of talked about, you know, uh, entrepreneurs
raising money. What about, the people that are looking to maybe participate, uh, when, you
know, say, you know, being an investor in some of these crowd things, what are some things
they should look out for or just, just kind of know going into it?
Woodie: Well, you know, it's a, the industry's growing rapidly. There's over 150. Platforms,
broker dealers, what we call funding portals that have registered. So it's very hard to find these
deals. [00:24:00] We came up with this thing called the Capital Pulse report that helps people
identify on all these different platforms, what we think are the top pla uh, deals that people
should look at.
Um, so if you're an investor and you don't just wanna flip through Wefunder, or Start Engine or
Honeycomb or the SMBX, you can get that. but what investors should be looking for is a
combination of what VCs do. So you wanna look at the team, their ip, what intellectual property
they have, you know, what we call their moat, what, what they're protecting, um, their, you know,
the market that they're addressing.
I mean, take that with a grain of salt. 'cause everyone's gonna say it's the biggest
Paden: Yeah.
Woodie: world. Right? Yeah. And we're gonna be a trillion dollar business in three years. That's
not the case. So you wanna, you wanna have people, it's not that they, you don't want them to
be aspirational. You want to see what milestones that they have down on paper for the capital
that they wanna raise from you.
So that's where you want to focus. Like, do I like this company? Do I actually think they've got a
product or service [00:25:00] that I would buy? If so, do I wanna invest in it? How much am I
willing to risk is the valuation right? Um, tell me about this team. So do your research that way.
And you know what, I'll tell you what, read the comments and by the way, if you don't wanna
read the comments, take the offering page, feed it into ai and tell AI to tell you.
What are the other people on these comments saying, you know, that's a great way to use AI to
help you reduce the time you're, uh, spending, doing diligence, but you know. And then if you're
in debt crowdfunding. You know, I just think it's such a great opportunity for investors. 'cause the
yields right now are about 10%.
So a lot of these businesses just don't qualify for bank financing. Most of them are under three
years old. Okay. Banks don't lend to you if you're less than three years old, period. So you've
got all of these, um, main street type businesses that are cash flowing clearly. They've got great,
you know, customers.
Um. You know what 10%, you know, is a great, uh, return on [00:26:00] investment in three year
terms. Um, so, you know, you can diversify. That's what we tell people all the time. Don't put all
your eggs in this basket. This is the highest risk form of investing. Although, I'll tell you, we ran
the data on the entire dataset to see how many of the companies that have raised money
through investment crowdfunding are out of business.
Now, the SBA will tell you that within the first five years, uh, over 50% of startups will go outta
business. Do you know what it was? Do you wanna take a guess what it is? In investment
crowdfunding
Paden: 30.
Woodie: 20, it was like 21.7%.
Paden: Okay. Nice. So very good. Well, and it's, it's people, you know, they build access to
capital. They've learned how to do that, you know, to, to a degree. And, and then the amazing
thing is we can skip all the red tape of the banks and, and, and a lot of that stuff because it can
be absolutely brutal to go through an SBA
loan.
Woodie: Right. I mean, good luck.
Paden: Yeah. I've helped my clients through lots of 'em, and it's, it's like [00:27:00] going to the.
I'm getting a prostate exam, so it's like, not that I'm still too young to have had one, but it's
something like that.
Woodie: Been there, done that.
Paden: So Sherwood, you know, um, turning the conversation a bit to you, you know, you've
obviously, uh, you've done some repressive things and, you know, kind of a leader, uh, definitely
a leader in that, you know, and the, in the crowdfunding space, what's one book?
And or habit. you think that has been instrumental in your journey and success?
Woodie: Um, well, you know, early on I read, um, Atlas Shrugged.
Paden: Yeah.
Woodie: by Ayn Rand and I, you know, it really gave me appreciation for, if you build something,
you know, own it. Believe in it, make it worth it. and that's what I took away from, from that book.
and, and I think, you know, I've sort of lived by that in terms of what we've done with this
industry.
you know, I'm a firm art and supporter of it. and so, I just think it's a great book for anyone to
read. [00:28:00] The other one, um, is, is right up there. It's called the Love Battery. I wrote that
with my son. Um, and it's about how our, um, hearts are batteries that store love.
and they're rechargeable. And so throughout the day when kids are running around, their
batteries run low, but at night when you cuddle and you're kissing and hugging your kids, they
recharge. And so it's about how the interaction that we have with others charges our love.
Batteries.
Paden: Wow. Yeah. That's cool. I, I could imagine, you know, um, writing that with your son, uh,
how, how special, uh, that that could be.
Woodie: Yeah, that was great.
Paden: So, uh, one more question for you, Sherwood. looking back, you know, looking back,
say to that guy in 2008, 2009, looking ahead of like, holy moly, I'm trying to change the United
States government.
If you can give that guy one piece of advice, what would it be?
Woodie: you know, it's, sort of simple. the world is full of, no, it's just the [00:29:00] easiest
default position. it's easy for people to say, it's easy for people to believe. Um. Don't listen to no
aim for. Yes. And get there through the phrase, why not? And the phrase, why not? Doesn't have
to be. Why not to the people that are saying No, it has to be.
Why not to you?
Paden: Mm-hmm.
Woodie: Because you are the one that's driving the change. So if you're gonna encounter a lot
of people that just say no. Your response to them with why not is I just don't believe that your
why is the reality. And, and here's the deal, and we learned this in DC it everything was no until
you get one.
Yes.
Paden: a hundred
Woodie: And that one yes changes everything. So keep on, keep your head down. Don't get
discouraged. Uh, we all get [00:30:00] discouraged. We all have bad days. They don't last. Um,
and you know, and just focus on the yes.
Paden: Yeah, yeah, man, that's, that's, that's great advice. Focused on the, yes, and it's like, uh,
I don't know, there's a famous Mike Tyson quote, where it's just like, um, you know, everything
is, everything's impossible. Until somebody does it. And I don't say Mike Tyson, quote,
everybody, you know, you've heard that said before, but everything is impossible. Like, you
know, the four minute mile was impossible. Everything, you know, everything, every, you know
the internet, me and you being able to communicate, like literally you ask anybody a hundred
years ago, everything we do in our life, they would say today, you know, it was impossible.
There's no way you can't do any of that stuff. It doesn't even exist. Um. Until it does, right. Until it
does, until there's human force and will, um, you know, and passion a, a person like you that
was willing to just carry that, until it happened. And you know, the amazing thing is when you
[00:31:00] carry something until it happens, like the world will get out of your way most of the
time, nothing wants to stand in front of something that is just relentless.
Um, you will make progress, uh, despite, you know, whatever's going on in your head, all the
setbacks, all that stuff, if you just don't quit. Right? It's, it's that common saying, right?
Woodie: So true. I mean, from sports to entrepreneurs, you know, everyone that succeeds tell
you they succeeded because they didn't quit. Everyone that quit will tell you that they didn't
succeed because.
Paden: Like, and it's, it's this weird expectations that, you know, we, like all of humans have in
our head that like we shouldn't have any problems. Or like, things should be just, you know, I
should think something up my head and it just happens with, you know, minimal effort or, or
whatever, right? Um, and that's just not how it works.
Like, you, you know, you're at a [00:32:00] position in your life, whatever it is, and, you know,
um, not everything's your fault, but like, if you wanna change stuff, I, I would highly encourage
you to take full responsibility for everything. but to change something in, in the beginning is the,
the hardest part right.
Is getting the inertia of moving. Right. Your, your, your hardest part of probably moving that
legislation was getting that first person to even take you halfway serious. Right.
Woodie: Absolutely. I mean, when we were walking the halls of Congress, we met, so, you
know, Congress isn't full of entrepreneurs, it's full of lobbyists and
Paden: Lawyers? Yeah. All attorney.
Woodie: And so the lobbyists that we met were like, who are you guys? Who, what firm are you
with? And we're like, we're
Paden: to?
Woodie: entrepreneurs walking.
They're like, you can't, you can't do that. And we're like, what do you mean we can't? Like, we're
not allowed. They're like, no, you're allowed, but you won't get any meetings. It'll take five years.
It'll take $10 million. And we're like, well, we don't have five years of $10 million. And they're like,
well, it's not gonna happen.
So when it happened, and it by the way. When we were sitting at the White House, Obama said
during the, his speech that this was the [00:33:00] fastest idea to become law in like history, 465
days. Um, and we got calls from all the lobby firms after we were at the White House saying,
why don't you come work for us? Um, you know, but that's what it takes.
It takes thinking outside of the box. It takes, you know, we don't have that time. It takes, how can
we do things differently? I.
Paden: Yeah. And I, and I think that's it. I think, um, I think it's, it's playing a different game,
right? If you would've tried to play their game, it wouldn't have worked. It wouldn't have worked,
it would've taken $10 million in five years. Right. Um, it's, there's a great book by Malcolm
Gladwell, who's one of my favorite authors.
Um, it's David and Goliath is the title of it, but he talks about the story of David and Goliath.
Right. And nobody thought David could beat Goliath because they thought that he was gonna
fight him in some traditional manner. Right. That he was gonna put on all the big armor and go
sword to sword with it.
Well, no, David was playing a different game. He was playing a game with a slingshot and no
one expected [00:34:00] that, um, he couldn't beat Goliath, had his game, but he could win it at
his own game,
Woodie: You know, it's funny to that. Um, so we knew we needed to get the attention of the
staff. We didn't care about the senators or the representatives. We knew. It's the staffers that do
all the communication, the staffers that let the senators and the representatives know what they
need to be focused on. So, you know how we got their attention.
We had a rally between union station and the house building, and it was a Charlie Brown rally. It
was a rainy and snowy that morning. We were hoping to have like a hundred people, I think 15
Paden: Yeah, no, it just
Woodie: that showed up. But we had a big sign that said you need to update the securities laws
to the internet age.
And every single person that stopped that was a staffer was one of the ones that made this
become a law.
Paden: Yeah. Yeah. And, and that's awesome. It probably, and it speaks to the staffers too,
right? Because the staffers are generally probably, maybe, you know, younger, right? Like even
than the, the senators and the representatives, and definitely younger than [00:35:00] senators,
Woodie: Yeah.
Paden: but, but you know, that even spoke, you know, even like that message even.
You know, spoke to them probably even directly as well, right?
Woodie: yeah. Yeah. We told them, you know, you wanna invest in a startup? Well, you can't,
but your boss can.
Paden: Yeah.
Woodie: do you mean I can't? And I was just like, I mean, these laws are old. We need to
update them.
Paden: Yeah, and you were, you were talking about the accredited investor laws and you know,
as a guy that, you know, obviously works in the tax and wealth space, that's something that, um,
is a big deal in my world. Um, and I have, you know, we, I have, there's, there's all these
investments out there that, uh, some of my clients can do and, and get to take advantage of
because they are in credit investors and some of my clients that can't.
And, and just because they don't hit, uh, you know, a, a measurement that the government set
out. Um, in the law whenever, um, and, and it cuts off, you know, people off the market that can't
have access to these certain type of investments because, you know, you know, the government
deems them too risky or, or whatnot.
But I tell you what, that's where a lot [00:36:00] of the wealthy people play.
Woodie: I mean, wealth creates wealth. figure out how you can get that.
Paden: Yeah, a hundred percent. So Sherwood, you know, it's, it's been a great conversation,
uh, you know, learning, learning more about, uh, crowdfunding and, and, and, and your journey.
Um, what's, the best way people can connect with you, get to know more about you and your
companies and, and, and just crowdfunding in general.
I.
Woodie: well, I would tell people if you wanna know how to crowdfund, get this one day 150
page guide. It's called investers. It's our playbook on what you need to do. Um, if you want to
know everything that we're doing from our venture fund to that offering insight report, go to ERs
book.com. Um, and then, you know, if you're really.
Wanna go to sleep at night, you can pick up the 400 page version of the book. but that this gives
you that
Paden: That's for the real nerds though, right?
Woodie: This is, yeah, it's a, it's a series. So, you know, I had written the, uh, I written, I'd written
The Dummies Guide, which is, you can't see it, but it's up there first. And, [00:37:00] uh, I
updated it with this because this is more recent.
but I wrote the, the how to first, and then everyone's just like, you need to actually write the why.
And so it took me a year to write this one, but um, you know, you can get all that on investment
book.com.
Paden: All right guys. Investers book.com. Guys, if you're looking, you know, looking into, uh,
uh, figuring out how to crowdfunding, all that kind of stuff. Sherwood obviously is a, is a leader in
the industry and, and, and, um, a guy with, uh, lots of great resources. Sherwood, anything you
wanna leave, uh, for the listeners before we sign off here?
the future is in front of us. You are here now. If you are looking at raising capital, immediately
type investment crowdfunding, into Google or go to, you know, investments book.com. and don't
waste any time that everything's changed. Nothing is the same. Billions of dollars are being
raised. you can benefit from this.
Paden: great advice and, and you know, um, obviously learn about it as much as you can, but
most importantly, at some point you gotta start taking some action. So [00:38:00] learn as much
as you can and if you find out this is right for you, start moving towards it.
Woodie: Exactly.
Paden: Listeners, thank you for taking the time to listen to the show, Sherwood.
Appreciate you, man, and uh, we'll catch you guys next time.
Woodie: Thanks babe.
Speaker: Thank you so much for listening to the podcast. If you found it valuable, please rate,
review, and share it. That is the best way to help us build this and reach more people as we're
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You can follow us on social media by searching for me Paden Squires.
Or going to padensquires.com on the website and social media. We're always sharing tips of
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