KoreConX helps startups streamline their cap table management and securities-related compliance. They have worked with a number of prominent Wefunder clients, who have been enthusiastic about the KoreConX team and service.
We asked them a few questions about who they are, and what they do:
Wefunder: What is a Transfer Agent?
KoreConX: This a great question. When a founder start to raise capital, they take on new responsibilities. In many instances, the company will need to engage with a registered transfer agent to manage the corporate records of the company. This can seem like a disconnect, as entrepreneurs obviously know their business best. However, in order to reassure investors, you appoint a third party Transfer Agent, to ensure your book of records are up-to-date and accurate.
So what is a Transfer Agent?
A stock transfer agent (or share registry) is a third party company, which records all entries, and manages all transactions, relating to a company’s equities (shares). As a Transfer Agent, we hold the "book of records" for a company, and make sure that all securities trades, transfers and corporate actions are undertaken properly.
Wefunder: What are the requirements for companies that run Regulation Crowdfunding campaigns, with respect to Transfer Agents?
KoreConX: Once you decide to conduct a Regulation Crowdfunding (Reg CF) or Regulation A+ campaign, you will need to undertake a number of regulatory activities before you can get started. To run a Reg CF campaign, you need to file a Form C with the SEC. Wefunder provides you with all the guidance you need to make sure it's done correctly.
As you prepare for your offering, you need to start planning for how you will manage and report to all your new shareholders after your capital raise. This can seem overwhelming, but at KoreConX, we are here to provide you with a platform that will help you with all that.
What really sets us apart from a traditional Transfer Agent is that we not only provide you with the required Transfer Agent services, but we also provide a holistic platform through which you can manage your shareholders, communicate with them, report to them, and hold your annual shareholders meeting including an evoting feature. We also have a free portfolio management feature for your equity and debt holders to view their investment information and updates.
Wefunder: What are some of the biggest mistakes you have seen companies make with respect to Transfer Agents?
KoreConX: Having spent over 20 years in the world of publicly listed companies, it was not a surprise for us to see some of the issues private companies are facing. For private companies today, beginning to work with Transfer Agents can be very difficult.
The biggest mistake we see is not disclosing the full capitalization table of the company. This is often because of the way securities have been issued to other shareholders, founders, etc. As a Transfer Agent, the only way to provide proper records is to include all the securities that the company has issued: shares, options, warrants, debentures, SAFEs, Digital Assets, Loans, Promissory Notes, etc.
The second biggest mistake we see is that there is no documentation for the securities that have been issued prior to a Reg CF offering.
Wefunder: What advice would you have for founders using Transfer Agents?
KoreConX: As a founder, it is important to build a relationship with a Transfer Agent you trust.
Find a Transfer Agent firm that not only serves your needs, but the needs of your shareholders, and provides you a way to be connected to them in an effective and efficient manner, so you don't have to keep duplicating your efforts.
A 21st century Transfer Agent needs to grow with you and intimately understand how you plan to use the various regulations to raise capital.
Wefunder: How much does KoreConX cost?
KoreConX: Understanding Regulation Crowdfunding (RegCF) and Regulation A+, we knew that pricing for this service would need to be aligned with issuers' requirements.
For RegCF, we have a three tier pricing model. This is not based on how many shareholders companies have, but rather, how much capital they raise:
$0-$250k raised: $25.00/month
$250-$500k raised: $50.00/month
$500k- $1M raised: $75.00/month
All our programs include the same features:
- Dedicated Transfer Agent
- No onboarding fees
- Unlimited transactions
- Investor Relations
- Ability to send reports to shareholders
- Ability to send news releases to shareholders
- Annual Shareholders Meeting management
- Online shareholder voting for your company's Annual Shareholders Meeting
- Free Training for you and your shareholders
Wefunder: If someone is interested in using KoreConX, how can they connect with your team?
KoreConX: Any founder interested in learning more about our services can fill out a contact form on our website here: https://www.koreconx.io/contactus/