Investor and issuer protection are top of mind for PrefLogic. This will be proven out through features intrinsic to the core technology as well as through educational content and PrefLogic’s business model. Educational and product navigation content will be stored in a central repository, but also woven into the Securities Matrix and visible on demand when questions arise.
I have a friend who runs a venture capital firm. In his opinion, the Securities Matrix is like an ultra-powerful race car, and allowing someone to sit in the seat without extensive knowledge of securities law, the capital markets and other business facets is simply too dangerous for both the issuer and the investor. What you can infer from this is a gatekeeper’s mindset that access to capital for the small and middle markets of the growth economy should be overseen by venture capital fund managers. With the extinction of small regional broker dealers and the hurdle for a SME to participate in venture capital ($5M-$10M) or IPO ($1B) being far out of reach, this is simply a no-start. The rich get richer. Those in need of capital continue to struggle.
There clearly is a problem as it relates to access to capital as evidenced by the lobbying for, and passage of, the JOBS Act. Business startup successes tied to the JOBS Act have been limited…until now.
Blockchain, digital securities and creation of a “financial internet” are the final ingredients needed for the JOBS Act to achieve its intended goal.
So back to the race and the race car. There are several examples in life where a beginner or non-pro can safely participate in activities with built in help; riding a bike with training wheels and bowling with the curbs up to list just two. A child who really needs the training wheels is not the least bit embarrassed to use them. Likewise, a small business owner or entrepreneur will be happy to sit in the PrefLogic Security Matrix driver’s seat and navigate with the “curbs up.”
PrefLogic has built an engine with the power to change capital markets anywhere along the spectrum from $100K to $1B, from the individual entrepreneur to the mature private company. The Securities Matrix is a SaaS platform that brings order, ease and competitive pricing to an otherwise complex and costly process. This is achieved with an intuitive user interface that is simple on the surface, but behind the curtain sit the ground-breaking abilities of blockchain technology and the strength and breadth of services provided by Prime Trust (Banking and Custody) and Assurely (Insurance).
PrefLogic has three separate products that will trailblaze a new capital market paradigm, and essentially fill the capital need and the void that currently exists along the full spectrum from $100K to $1B. These products include the TURNKEY MATRIX, the LIQUIDITY MATRIX and the ENTERPRISE MATRIX.
Investor protection will be provided within each product and is tied to education, quality within each deal and the automated, guided path through a securities offering that the MATRIX provides.
The TURNKEY MATRIX will generate the first issuers for PrefLogic. Essentially any business sector that involves an asset-backed entity yielding cash flow and/or capital appreciation is appropriate for a Turnkey solution. The specific business verticals known as the Real Estate Fix-and-Flip and the Real Estate Buy-and-Hold will be among the first commercialized products spawned by the TURNKEY MATRIX.
Future possibilities include thoroughbred horse racing, movie production, theatrical/music distribution, garment distribution and wine production, to name just a few. PrefLogic also plans to solicit and/or entertain introductions to sales agents for specific industry verticals for which a Turnkey solution could be developed and monetized.
So, what exactly are the built-in “curbs” and business turnkeys?
The TURNKEY MATRIX focuses on the individual entrepreneur or small company. Everything needed to conduct a quality offering is provided. This Matrix is designed to provide an issuer in a specific industry class with an automated, guided path through a securities offering. Investor protection is built in by way of offering an asset-backed and/or cash-flowing deal with a defined business model and rule requirements included within that specific turnkey business vertical. This is further defined by the Private Placement Memorandum.
Through the Matrix, the issuer is provided several items that are specific for the industry class. These are listed above and include educational materials, the digital security (SERC token), organizational documents, a prebuilt customizable website, a marketing video and a detailed outline for a customizable PPM. Investor contributions are used to purchase, improve and/or service the asset while asset custody can be controlled by our partner, Prime Trust. Through the PPM and the Digital Security, the investor has claims to a predefined sharing of income and upside in the occurrence of a liquidity event. Investors are further protected by the financial services of Prime Trust and insurance that the issuer has the option to purchase through Assurely.
Real estate has been chosen as the first asset class for PrefLogic to focus on as it is relatively easy to represent, custody and transact. There are trillions of dollars in real estate inventory worldwide. Individual entrepreneurs and SMEs are also located worldwide making this a global opportunity for issuers, investors and for PrefLogic to prove concept. Investment in real estate has a proven reputation with an enormous amount of data to support its safety in an asset-backed investment with time-tested reputation, and well-defined cash flows and exit terms.
Incorporating Prime Trust, a global financial services company, for escrow, custody and other financial service needs brings assurance of quality and oversight.
Incorporating Assurely’s insurance product, TigerMark, provides deal safety through insurance for both the investor and the issuer.
In summary, rather than say it ourselves, here is what David Carpentier, Co-Founder and CEO of Assurely had to say about PrefLogic:
“Since our first conversation with the PrefLogic team, we understood that they were building something special. It was clear that their Securities Matrix was at the core of innovation in the industry. Their simple, cost-efficient, end-to-end workflow to create a security token offering for the masses will very soon be the new normal for the entire securities industry. PrefLogic is setting the bar high for how to accomplish this and how to do it with ease, safety, and with access to everyone. We are thrilled to partner with them and contribute to their mission.”
By: R. Jeffrey Cole, MD
Advisor to PrefLogic
DISCLOSURE REGARDING ENDORSER. Dr. R. Jeffrey Cole, the author of this blog, owns a promissory note that is convertible into a significant number of shares of PrefLogic common stock at a fixed conversion price. In addition, PrefLogic has issued to Dr. Cole shares of PrefLogic common stock to compensate him for providing management and marketing advice to PrefLogic.