This interview is of interest to CEOs, Founders, and Innovators seeking capital or looking for insight into the investor’s mindset in the hectic world of investing. Today’s guest prepares and rates companies to signal to investors that they are funding ready. Using Blue Moon Advisors’ unique methods, companies that go through their process and fulfill the criteria come out the other side with over a 90% chance of obtaining funding. That is a significant result considering a few as 3% of companies otherwise get the funding they need to succeed – let along grow. The saying “once in a blue moon” is apt when applied to traditional rates of funding.
As a former Marine, Tony Drexel Smith applies the persistence and discipline he learned as a Marine with the knowledge and creativity he has gained over years of experience guiding client’s success raising capital. He has some valuable words of wisdom as well on the impact of COVID-19 on business.
With no further ado, let’s get started.
Robert Steven Kramarz:
Hi, this is Robert Steven Kramarz, co-founder of Intelliversity and this is the Vision Master Podcast, which you’ve heard before. We have a really interesting vision master with us today, Tony Drexel Smith. His varied background all brings him to this moment in time today. Tony is the founder chairman of the AOBMA, which is the Association of Blue Moon Advisors. We’ll get into how that came up. And he’s also in charge of due diligence at a fairly major capital raising firm in the Bay Area known as US Capital Partners. I know they’re based in the Bay Area, but your offices are in Las Vegas, right Tony?
Tony Drexel Smith:
Correct. Yeah. We are a worldwide company truly. We have offices in London and we do business all over the world. We have all of our due diligence and underwriting staff here in Las Vegas. We like to hire right out of UNLB, the Masters’s degree program. So we’re able to get fantastic educated people and that we don’t have that incredible cost of living expense of San Francisco.
Robert Steven Kramarz:
Now we try to advise our clients not to gamble with investors’ money.
Tony Drexel Smith:
Right,
Robert Steven Kramarz:
So there’s a contract, and I know you feel the same way. So how do you teach entrepreneurs how not to gamble with investors’ money?
Tony Drexel Smith:
Well, first of all, they have a fiduciary responsibility, right? The whole point of due diligence and underwriting is to make sure that the legal documentation is in order and that there’s a clear understanding as to the use of capital. And we have a regulated program wherein every 30 days we’re reviewing how the project is going. We use a virtual data room to maintain compliance and document sharing so that we can ensure that the entrepreneur’s on target with what they had suggested they would be doing with the capital. And we monitor how returns on investments are working out to be comparing the proforma versus the actual.
Robert Steven Kramarz:
Tell our listeners, what is the AOBMA, who are its clients and what does it do?
Tony Drexel Smith:
Well, the AOBMA primarily serves its members, which are professional consultants, subject matter experts, attorneys, accountants, capital providers that learn our standardized process about evaluating enterprises and the enterprises are the customers or clients of our members.
Robert Steven Kramarz:
I see. So a visionary member, an innovator, or a founder, if they want one of your well-trained advisors, how do they get that?
Tony Drexel Smith:
Sure, well our network is now 365 strong, and each one of those network members typically has their own website. As an example, even though I’m the chairman founder, I have my own website, TonyDrexelSmith.com.
Robert Steven Kramarz:
And we’re one of your advisors. We have a website, right?
Tony Drexel Smith:
That’s right. And almost every member has their own promotional website. Most of our members are independent contractors. Some are companies like US Capital Global as an example. But look, we’re a FinTech education company. We’re training consultants and professional advisors and subject matter experts on how to follow our standards, protocols that took us about 10 years to create and develop where we can determine the right type of capital for the right situation that’s prepared for the right audience. That is our value proposition. If you go to an investment banker, they have a certain protocol and type of capital and VC, the same. Same thing with an angel investor, same thing with a commercial banker.
I mean, you can go on and on with the 45 ways to capitalize a company, but they all have their own protocols and they all have their own specific niches, industry sectors and so on. Where the AOBMA’s true value proposition is, we are aware of all of those different types of capital and our members represent those various types of capital. And so we’ve created a system to be able to determine based on the enterprise that’s seeking capital, its situation, qualifications, what’s the best type of capital for the right situation and what documentation is required to apply for that capital. And then what’s the right audience to bring it to.
Robert Steven Kramarz:
All right. So for our innovator and founder listeners, do they go to the AOBMA.com site to find a adviser? Is that how it works?
Tony Drexel Smith:
They can. I’m doing the podcast here, so we would actually recommend any AOBMA members should promote themselves, which is how our model works. So I’d really rather promote TonyDrexelSmith.com and then I will take those clients right into AOBMA and introduce them to our firm directly.
Robert Steven Kramarz:
Ah perfect.
Tony Drexel Smith:
But they’re welcome to go the AOBMA.com as well.
Robert Steven Kramarz:
Okay. Now talking to our advisors, all of the advisors listening, how do they involve in your network?
Tony Drexel Smith:
There are multiple types of membership. There is a member, there’s an affiliate member, there’s a bloom and advisor member, and there’s a certified bloom advisor member and then there’s a licensed member. We also have student memberships as well. Each membership level determines how much training they intend to participate in, how much money they want to earn. We pay referral fees, but based on the level of involvement in training. And we refer business out as well. So the referrals go both ways depending upon the type of member.
Robert Steven Kramarz:
Okay. Well, at the end, we’ll give out the link and the URL to actually inquire about membership in the AOBMA.
Tony Drexel Smith:
Right.
Robert Steven Kramarz:
But let’s take a little side trip here because you have a storied background starting out as a Marine.
Tony Drexel Smith:
That’s right.
Robert Steven Kramarz:
How do you apply your Marine background to helping entrepreneurs and advisors deal with the challenges of being-
Tony Drexel Smith:
Never giving up. Persistence and just never giving up is number one. And two is discipline and the discipline that’s required to never give up. Never giving up is a trait, that’s very hard to teach a trait. And for me, I’ve had many a day where it was tough to keep going. When the 2008 crisis happened, it was a very difficult time to capitalize.
Robert Steven Kramarz:
I remember that, yes.
Tony Drexel Smith:
And I just kept going anyway. Having been engaged with over 1,400 companies and hearing 8,000 pitches, you can be rest assured I’ve had many times where situations were really tough and depending upon how involved I’ve gotten in projects, it can be a tough job trying to help entrepreneurs seek capital. And very often I have to give people the truth and sometimes people don’t want to hear the truth. And 85% of the time, entrepreneurs are on the wrong track in terms of the type of capital they’re seeking and whether they’re qualified for the capital that they really want. And we tell them the truth. And so by telling the truth, I can go to bed at night, but that doesn’t necessarily mean it was a good day because ultimately, sometimes people don’t take the truth well.
Robert Steven Kramarz:
Fair enough. You also have a family that you’ve been raising for the last, what 25 years?
Tony Drexel Smith:
30 years.
Being a Marine, I grew up quick. I was married very young, which many Marines do that. And so I’m very fortunate to be a young empty nester. My wife and I raised six children together and all six are now either married, in the military, or in college. So we’re very fortunate to have four grandchildren now and be empty nesters. Part of the reason we moved to Las Vegas is we have the freedom to be able to fly anywhere from the world from this airport without traffic getting there.
Robert Steven Kramarz:
By the way, thank you for your service and to your kids.
Tony Drexel Smith:
Truly my honor. Happy to do it.
Robert Steven Kramarz:
Needn’t to be said, but like to say it anyway. All right. So great. So this one last thing, in terms of the COVID-19 crisis and recession that we’re in, what do you personally advise companies do to pivot and/or recognize the changes that are underway in our economy at this time?
Tony Drexel Smith:
Well, first of all, it’s organized that the last three months of COVID-19 were unprecedented and everyone knows that. The real issue for us on the banking side is what does the next year look like? No one’s really felt the effect, and you’re not seeing it in the news every day about how many people are in forbearance. Many people don’t understand how forbearance works. It’s not a forgiveness of your monies. You have to apply for the loans that have been forbear to be added to your loan or a restructure of your loan. Or those loans are going to become due. So if your car payment, your house payment, your Navient student loan payment have been forbear for the last three months, realize that those bills will become due. That’s going to be painful for a lot of people, especially those that have not regained employment.
Unemployment in general is going to run out in July for most people. So I’m quite concerned about what August and September is going to look like. It’s unfortunate that it’s not in the news every single day, that this is going to be a very important issue that’s going to happen two to three months from now. I would hate for it just to become the biggest piece of news around when we could have been talking about it well in advance and planning for it. I’m also quite concerned that every election year, there’s an adjustment in our economy. Macroeconomic issues get shifted every time there’s an election. And this is the first time in our American history with television that it’s not in the news morning and night. The election is only four or five months away. The fact that it’s not the top news every day is because there’s so much other news that’s gaining much more viewership.
So I think those things cause entrepreneurs to pause. Think strong about conservation, getting capitalized now, making sure that you’ve got a strong capitalization plan for the unforeseen future. 2008 crisis lasted really about 18 months to two years. It wouldn’t surprise me if we go through a very similar period now.
Robert Steven Kramarz:
Yeah.
Tony Drexel Smith:
It’s part of the reason that I stopped being just an independent contractor and went to go work at US Capital Partners, because I learned that through 2008 to 2010, commercial bankers tightened up so strong that alternative speculative capital was the name of the business. And that is why I’ve aligned myself with US Capital Partners. They specialize in that, they have an investment banking division. They have a broker dealer division that will be able to help entrepreneurs through these very interesting times that we’re headed into I think again. COVID is an obvious shift. The real issue here is what is the fallout going to look like?
Robert Steven Kramarz:
All right. We can keep talking all morning Tony, but I have to draw a line here.
Tony Drexel Smith:
Sure.
Robert Steven Kramarz:
So how do people contact you directly for either service?
Tony Drexel Smith:
Best way is just go to TonyDrexelSmith.com. My email address is tony@tonydrexelsmith.com. I’ve made it all pretty darn easy. I can be reached at the AOBMA through Tony Drexel Smith or US Cap, Tony Drexel Smith. You can learn about me, my history career, all of our intellectual property we’ve created. It’s all on that site.
Robert Steven Kramarz:
You’re a natural entrepreneur. You repeated your name nicely and your contact and your mission. So good job, Tony.
Tony Drexel Smith:
Thank you.
Robert Steven Kramarz:
Thank you very much. This is Robert Steven Kramarz of the Vision Master Podcast from Intelliversity. Thank you for listening. And that’s the way it will be.
Tony Drexel Smith:
Thanks Rob.
Robert Steven Kramarz:
Take care.