Episode – 24

Pipe Deals | Capital Raising | Reg A | Digital Payment Kiosks etc.

Description

Bill Corbett is Chief Executive Officer at Innovative Payment Solutions, Inc. (IPSI) He cut his teeth at Bear Stearns, where he learned from the legendary Ace Greenberg. Early on Bill got involved in private investment in public equity, often called PIPE deals. He Co-founded PIPE pioneer and San Francisco boutique investment bank, The Shemano Group. He has raised over $2 billion in his career. At IPSI, Bill is focused on building a digital payment technology service business using self-service kiosks.

In this interview, Bill digs deep into Private Investment in Public Equity, also known as “Pipe Deals”. He explains what he looks for when evaluating deals. He talks a little about reverse mergers. He speaks about the effects of Covid-19 on the business environment. He talks about what he looks for when building a support team. He explains why “knowing your customer” is so important when raising capital. He talks about how Reg A is similar to a Pipe Deal. He goes into detail on his newest project, digital payment kiosks. This is a very interesting interview that you won’t want to miss!


What You Will Learn
- Private investment in public equity (PIPE Deals)
- Why you should return all phone calls
- Bill’s new project: Digital Payment Kiosks
- How to build a support team
- Do’s and Don'ts of Capital Raising
- How Bill evaluates deals
- and much more


Connect with Bill:
LinkedIn

Full Transcript

JP Maroney:

Greetings and welcome to another episode of the deal flow show. I'm JP Maroney, your host, along with my co-host mr. Paul, Nick Leni, from here at our team at Harbor city capital and the deal flow show team. And we've got bill Corbett from innovative payment solutions with us, and there's some history here. So this is going to be a fun interview. We're going to talk about what a scratch golfer. Uh, you are now I'm laying me on a golf course is like the whole Lori Bird. Uh, have you heard about the whole Lori Bird? Do you know what they are? The whole Lori Bird is a three foot tall bird that walks around in four foot tall grass saying where the hell are we? That's what kind of golfer I am. But looking forward to this, because I want to talk a little bit about your background and let's start there. How you got started in the capital markets. I know you had a career in investment banking, and then I want to talk about the project you're working on. Now, the company you're running, which sounds very exciting. We're looking forward to both on the show and offline learning a little bit more about that. So maybe if you could just back up a little bit and talk about where you got started and maybe some of the early bills that you cut your teeth on.

Bill Corbett:

Yeah, I would love to. And first of all, thanks, JP and Paul is so great to get reconnected with you. Uh, it's a pleasure to be here today. Um, but you know, if I could digress, I, uh, spent 32 years on wall street. Um, my, I cut my teeth at bear. Stearns spent about 10 years at bear Stearns and Lehman brothers, uh, learned the business from a legend named ACE Greenberg who, uh, was at bear Stearns for about 60 years. Uh, one of the great companies in the entire universe bear Stearns before the collapse, but ACE was, was an amazing guy. He taught you to have the utmost of integrity. He had a mandate at the firm that you call people back in 24 hours. And if you didn't you're fire. And so always in the back of my head, I, I have this complex where I have to compulsive.

I have to return phone calls. And it's amazing if you live by that motto that you pick up business, you never know what's going to happen when you are, you know, standing up and returning calls. And I, so I learned the business at bear and, uh, bear Stearns partner of mine. We started a, a broker dealer in San Francisco. I was a CEO for about 12 years called the Shimano group. And, uh, we were, uh, pioneers in the pipe space. I, uh, I know it's hard to believe, but there was a time where there was no internet and email and emails, uh, just maybe some of your viewers and your network. But the reality was, is we had to network, we had to use DNB cards. We had to use institutional rosters, S and P. And, uh, we were, um, kind of early, if you will, in mid nineties to the pipe space, I saw the internet coming, uh, and told my partners that if, if we don't pivot to something that has larger fees, we're, we're dead man.

And, uh, Schwab San Francisco company was growing enormously and we just felt that we had to change. So I think it's important as a businessman to keep your mind open. And, uh, you know, I, I heard one the other day. It was, you know, mine's like a parachute, you know, unless it's open it's it's trouble. So we basically pivoted to raising capital, uh, as investment bankers for larger public companies, large meaning sub 50 to sub $60 million market caps. Uh, Informix was trying to keep up with Oracle by cooking the books, unfortunately, and as they threw out management, the stock had dropped to about a $50 million market cap. We raised, uh, $50 million for them. It took about 10 days. And that kind of, you know, gave us a launch into the pipe space, both, uh, on our ability to execute the relationships that we garnered through that we brought credit Swiss in and a couple other SESCO Honda and a couple of other really interesting in smart institutions.

And we saved the company, uh, and ended up being sold for a billion dollars three years later. Uh, we leveraged that to do other pipes and we were, you know, historically I would say, you know, in the top two to three or four firms for S you know, almost five, six years and in the amount of deals that we did in the pipe space. So that was a, it was a great learning experience. We all had a lot of fun. We did a lot of good stuff for, uh, for public companies. And we use that as a, as a lever to, to do bigger and better business.

JP Maroney:

I have a couple of questions related to that, but I want to go back a little bit. You were talking about your early start at bear and ACE. You said ACE Greenberg. When you look at people like that, that you followed, what were the characteristics that you think made them a great deal maker, a great in their space.

Bill Corbett:

Very interesting, because he had the highest integrity I've ever seen on wall street. You know, his, his word was his bond. Uh, he was a magician, uh, and an expert bridge player. So he had a keen mind. Uh, he was one of those guys that, you know, was not, in fact, you waited with Ivy leaguers, you know, cause he was competing with Goldman Sachs for 60 years. Bear Stearns for 60 years, never lost money in 60 years, which is extraordinary if you go back to the depression. So they were very interested in hiring, you know, young, smart, um, aggressive guys that they really weren't going to fall back on, you know, some pedigree and, and not, and worry about making the call. So, uh, smart guys, but the main ingredient JP was integrity. He, uh, he just the truth and he was very simple in the way he approached everything.

He had some, uh, some great lines. For example, if you don't want to be misquoted bill don't give interviews. And, you know, he was just a, you know, a straightforward Midwestern guy that ended up in New York city and spent about 75 years there. And, and he was amazing too, in the sense that when he was young at 27, he had leukemia and he beat it. And so he was very solid as far as a positive outlook on life. Uh, very grateful, uh, had a lot of humility for being as successful as he was. And he was kind of the broker to the stars, you know, the big players, the Larry Tisha's, uh, some guy named Trump, uh, used to do a lot of business. You could hear the blocks going by, you know, 500,000 chairs, a Hilton, you know, in the eighties, that was a big deal. Uh, but he was a man of great integrity. And I think that's, that's the key to that, uh, to that business for him.

JP Maroney:

That's interesting what a Testament for those inner audience. And I know it's going to be some percentage that don't know what the pipe space is, as you say, it let's define that for them, because it's funny because we just got through having a conversation about this on Monday related to, uh, another public potential public offering, but walk us through

Bill Corbett:

Bill. It's certainly not in the plumbing industry, uh, but a pipe would be a, uh, public, uh, private investment in a public equity. And what that means is, uh, you're basically marrying up as an investment bank or a transaction where you're introducing, uh, a institution or a group of individuals to make an investment in a public company. And there's generally that, you know, in, in the days that we were doing it, there would be some restrictions as far as the rig D and having to register those shares. Uh, I know consequently we've seen, you know, one 44 shrink to six months, but back in those days, we would, we would put together a private placement. We would charge somewhere in the neighborhood of eight to 10% plus warrants, the investor, you know, you ask yourself, why would an investor do that? Uh, you know, the investors usually getting a discount to the current stock price, he's getting warrants.

Uh, sometimes he's getting a convertible debenture, so he'll get a coupon, maybe an original issue discount attached to that. So w the reason one would do that would really be to get the warrants, um, or maybe, you know, the stock's not quite liquid enough to buy a million or $2 million worth of the stock. So the pipe allows him or her to participate in a private placement. And the pipe space was pretty early in the mid nineties. Uh, it's become commonplace. And ironically, during the, uh, the baka we saw, no, Oh, what was it? I, it would have been, Oh one Oh two when, um, Oh, no, excuse me. It was 2008 when GE and buffet, uh, made those $5 billion investments. Those were actually done as pipes, you know, so it, it's a great way for, if you believe in a company to own a large amount of the stock, uh, usually you can get warrants with these transactions, which it's like buying two shares for the price of one. It gives you, um, you know, some, uh, steroids, if you will, on the investment, if it works

JP Maroney:

And that money pardon me, and that money is getting injected into the operating company, as opposed to placed in the public markets where the traditional purchase. Right.

Bill Corbett:

Absolutely. And, you know, the main thing from my perspective was being able to quantify the dilution JP, so that, you know, you could approach the board because, I mean, if you think about it, who's your real customer. And I've always asked that, I mean, is, is it the individuals or the institutions investing in the, in the, in the enterprise, or is it the enterprise and the company itself. And I always felt that, you know, you're going to do right by the Institute by the company, but you really are fighting for the investors because that's the people that you're going to represent time and time again, hopefully with other transactions. But yeah, the money gets, you know, basically injected into the business, hopefully for, for a good purpose and growth. Um, and it's, it is basically the, the hope would be that the company and, you know, due to contractual obligations would file a registration or an [inaudible] for those shares, as well as the warrants. So that if you're lucky enough that the stock moves off the discount that you bought it from, you know, over the next, you know, pick, pick a number 30 to 90 days, maybe a year, uh, you generally can make a lot of money if you're right. Right.

JP Maroney:

I was going to ask though, just from curiosity and maybe another perspective, what was the holding period on those restricted shares? Again, back then?

Bill Corbett: 

Well, back then, you know, Paula was 12 months, but you can circumvent that legally with the sec by filing an [inaudible]. So, you know, so many, you don't get a full review, which, you know, the sec could, could want to take it out a little bit further to get more information from the company. Generally, the holding period would be sometime between 30 to 60 days for one to get through the S want to get it, what's called effective

JP Maroney:

Reggae that you see some public companies doing now since they made it available to public enterprises. Is, does that technically qualify?

Bill Corbett:

So pipe, you know, I guess you could say that JP, I mean, I really liked the, what they've done with the jobs act. I think that it's opened up companies. It's been very difficult as you guys know for the sub 50 sub $60 million market caps to raise capital. I think that general solicitation, which would have thrown in jail and the nineties and the early two thousands, if the ability for the smaller companies to use reggae I think is, is, is excellent. You know, I think the new legislation that they're passing through for reg D to go from maybe a million dollars to raise as much as 5 million, uh, is, is really good news. You know, I, I, it seems to me, and I can't speak for the sec, but it seems like they've turned the corner and decided to allow smaller companies, more access to capital, including, you know, changing some of the rules that are in place.

Now they're trying to change, uh, finders finders, being able to raise capital for small companies, you know, w without being, uh, actually registered with FINRA or having a series seven or whatnot. So I think that's really compelling to me, it's an about face. Uh, and they're starting to look at this environment, which has been brutal as we all know, uh, other ways and, and backing off from the restrictions are small companies and providing them access to capital that we haven't seen before. And I think reggae is a good deal. Uh, I think crowdfunding any of these things, I think that enable companies to grab, uh, larger amounts of capital to grow their businesses. A good thing.

JP Maroney:

Shouldn't how y'all were going. You said institutional list, and I assume you mean, basically in those days you were banging out the phones, right?

Bill Corbett:

All, all the business was done on the phone, JP absoultely.

JP Maroney:

So have you, and I know you're, which we're going to talk about. You're running a public company now, but, um, have you personally, or with your colleagues seen this shift that we're hearing and seeing where road shows for example, or, you know, zoom shows now? I mean, it's and people being able to create an, almost an accelerated roadshow path and raise as much or more money through that, are you seeing the same thing people's willingness to shift and do business in a different way?

Bill Corbett:

I am. I mean, look, we all know that meeting if, you know, meeting people in person, especially if, you know, you're a somewhat professional is, is better than not at least in my opinion. However, uh, being in San Francisco in my whole life, I think you're seeing a sea change out here, which I think will be replicated if it isn't already, um, big companies. My, my, my daughter works for Facebook. You know, my son's at, at, at a company called indeed. And these companies are basically saying, you don't have to come back, maybe not ever now. And, you know, sure. Engineers, we're probably going to have to show up, but the whole dynamic is changing out here on the, I don't know about New York, but, you know, for example, LinkedIn in San Francisco is saying, there's no reason to have an office anymore, which is pretty extraordinary, you know?

And, and I think what you're seeing is that people are able, you know, to work on their own, to motivate themselves, to do they're seeing that in the last couple quarters, despite the COVID. And I think that they're more productive, ironically, you're not sitting in a car and then the Bay area traffic has gotten to be ruthless. So if you're in a car for three hours, you've got another three hours in the day to be more productive for your company. So I think you're seeing a sea change. I wouldn't want to be long, a lot of commercial real estate, some of these places, but I think you're seeing a lot of, uh, dynamics that have shifted to your point that it's okay, you know, to, to be on a, uh, um, a zoom call. And I think that, uh, things are getting done, which is great. And I think that maybe, you know, a year from now, after this thing passes and, and hopefully God willing, the vaccine starts working, we get back to going to conferences and, and meeting people. But right now, I mean, I don't see why one would want to get on an airplane and go sit with a couple of hundred people in a room to go to a conference.

JP Maroney:

Yeah. That is true. You know, we've talked to a couple of CEOs on the show and they found it to be very effective during the virtual roadshows. And yeah. And I think that, I think people are getting into that mindset that even when it starts to come back, it's like, where are their social skills again? Right. About the handshaking and about the, about the, the being at the bar and having to deal down at the bar and you know, all that stuff, maybe just history. I want to talk a little bit about the challenges with, as you said, sub 50 million market value, raising capital in the markets today. If I understood what you said in just a moment, but before we do, if you're watching or listening to this episode of the deal flow show, you can get access to our previous archives, our previous episodes, as well as subscribe, follow us, get access to us by going to the deal flow, show.com the deal flow show.com. And by the way, we're also now thanks to our team on nearly every audio and video platform in existence. So big kudos to the Duplo show team. And everybody that's been working behind the scenes on this, but, um, so bill, explain what you mean by that. And is this something maybe we could pivot towards what you're doing now? Is this something you've experienced personally as a CEO now of a public company, or is this just an observation in terms of the challenges of raising capital in the markets? If you're under that tier,

Bill Corbett:

I look, I think relationships are key. And when you've been around, as long as I have, you know, you have some pretty good relationships through the years where I look, I keep going back to integrity. I think my grandfather, who was a wonderful guy told me, you know, when you lie, you have to remember. So at a very early age, I decided that I wasn't smart enough to remember anything. So I'm just going to tell the truth, and I'm not the smartest guy, but when I'm dealing with there's an integrity factor and a transparency that I'm, I'm not trying to pull the wool over your eyes. I'm trying to give you as much information as I can about a particular company so that you can make an intelligent observation and, and decision to whether or not you want to invest in it. And that way, as long as you're, you're, you're working on the lines of integrity and transparency, you're building enough, trust that through the years, uh, you can keep, continue to go back to that, that institution or individual that you have this, this, this long history with.

So, you know, I've, I've been fortunate enough to raise, uh, over a million dollars in the last several months with some great institutions that I've known for some time. Um, I take a mindset that, you know, as, as a CEO, it's a war on capital, and it's a fine line that, you know, you have to balance the aspect of dilution with being a steward for the shareholders, because let's face it. I, you know, I worked for the shareholders and I'm trying to increase shareholder value. And w at what point do you take in some money and how do you deploy it? What's the best use of that money? Uh, and how do you, you know, raise money at higher levels? Because ultimately my responsibility, as I see it is to raise money at higher levels as we build a growth company. And so I think in this environment, you know, you have to consider all options for raising capital.

Um, and I have found that, you know, we've been fortunate with some, some pretty good institutions that want to help us, you know, with the company and let it grow and, and invest in it. Um, but that being said, you know, I, I think that you have to have good auditors, you have to have good lawyers. Um, I filed an S one recently and we got it through in about nine or 10 days. Uh, I think that's representative of the fact that, you know, we have good auditors. We have really good lawyers that, uh, you know, really know what they're doing. And I think that helps as a reflection of the company. And so I think in this environment, you know, you just have to continue to network. You have to, uh, continue to work on, on existing and new relationships. And I think it's, you know, it's, it's a knife fight in an elevator.

You just can't stop. You just have to keep, you know, almost evangelically talking about your mission, what you're doing. And, and I really don't judge JP fall. I, I try to tell the story the best way I can and, and see if there's an interest on the other side to help us, you know, grow the business. So I think this environment is, is a tricky one, but I think it's getting better. Actually. I know that sounds strange, but I think the buyer and the environment is getting better, low interest rates, public companies, you know, offer as an alternative investment, a little bit of a turbocharge to your portfolio. And especially in the form of private placements,

Paul Nicolini:

You've raised a lot of money bill in your career, and you've, you've answered really a lot of this next question that I'm going to ask you, but what else can you tell our audience about the do's and don'ts in capital raising.

Bill Corbett:

I know it's not an exact science and, you know, it's, it's hard to make generalizations, but, you know, I think there are certain things that, that you can do. I mean, if, if for example, I, I, I don't know, I've probably raised over a billion dollars in, in 30 years and, you know, I never was one to charge upfront fees, you know, I just always wanted to base, you know, everything on my performance. Yeah. I just, I just, I was always, uh, a sports guy and everything to me is a microcosm of sports and it's about performance and you're only as good as you know, that the last game you pitched and I just felt coming into a new relationship, it'd be unfair for me when you don't know my firm or made to say, give me $50,000 and I'll go do the best I can for you.

And then, you know, 30 to 60 days later, for whatever reason you've failed. And the guy says, what did you do for the 50 grand? And, and so I felt that would be very hard to, uh, to justify. So when it comes to raising capital, you know, I felt that, you know, you really want to be performance-based and, and running a broker dealer or having the distribution of the BD, uh, you know, your reputation is, is really, you don't think about that at 25, but, you know, luckily if you did, when you're 35 or 45, your reputation is key. You know, it get in your word gets around the way you treat people, um, is, is prevalent in a lot of different ways. So I think it's important to treat people fairly and honestly, and it gets back to of course that, that thesis of integrity.

Um, but you know, I, I just think that you got to know your customer to guys. I think, you know what we did really well, Paul, when we worked for you and, and running the BD as a CEO, I knew what my customers wanted. And really as a salesman, kind of as an investment banker, you, why sell your customer something that they don't generally do? It's like swimming upstream. So if I know my customer likes liquidity, then I'm going to find companies that are liquid and these aren't real estate plays. So if I can bring them opportunities that are liquid, you know, that gives them an opportunity at some point down the road when they want to get out of the position that they can get out. And, uh, I think knowing your customers is really important. Um, and I think that the ability is, uh, as a banker to be able to quantify dilution is key because are a lot of characters out there.

And if you can't quantify dilution to the board, uh, I think it's, uh, something you might want to pass on, because I think it's important that you have fixed price conversions, fixed prices with board's ability to say, should we do this transaction or not? Because I think that the contingent liability going forward is sure if the stock goes up, it's great. But if the stock goes down, it becomes, you know, uh, not so pretty when someone's converting stock it, you know, tens of millions of shares into your company, because you really should be able to quantify dilution. I think that's important.

JP Maroney:

Like your mindset of performance based years ago, one of my mentors said to me, he said, JP sales is the only profession where you get paid exactly what you're worth. And I think anytime you can connect what you do to performance, it puts you in the, in the yoke with whoever it is that you're working with. You're both pulling for the same success. And I know at, at one of the statements we make to people here at Harbor city, when we're looking to partner up with a company, as we say, you know, we bring together and give people access to resources, capital as well as new customers, which are the things that companies need to grow. It's what they feed on. But we also say we don't meet our lunch money. We know where our lunch money's coming from. We want to win when you win and we wanna win when you succeed, we all succeed in a big way.

And I liked that, but, but that also puts the, the pressure on you to evaluate and choose deals appropriately. So we only have so much bandwidth. So how do you, how do you evaluate, and I'm going back again to your previous work, but how did you evaluate deals? What is your process for defining? Is this still right for us? Is that the right time? Is it the right market? I get the, are these good people? And I get the whole bet the jockey thing, but, but how do you evaluate the deal to make sure it's worth you putting your energy?

Bill Corbett: 

That's a great point, right? And, and as agreed animal, because most of us on wall street are, you know, where's the path of least resistance to get paid, you know, and selfishly for me, because I started at zero every year, like a lot of us did, uh, where can I get paid? Where can my customers actually be put in a position where one I can get paid and might not be the priority maybe second to where can they make the most money possible? And Jack's would always say, you know, I, I'm a visionary and I, you know, I, I'm looking for the big, the big move up on growth or whatnot. Jacks. We're always look for fixed assets on a balance sheet and what the heck do I need you for? We need you for, for that. And anybody would lend money against a good, solid, fixed asset.

Let's go find the hard deals. And when they were, you know, they're extraordinary, they're 20, 30, X and 12 months with warrants. And I was fortunate enough to be in several of those. And it's a great feeling, JP, when, when you make people money, you know, when they make that kind of money and as a banker, you know, there's a lot of Goodwill in that, you know, when you make somebody 10, 20 times on their money in 12 months, six months, they tend to want to do your next deal, you know? And so it makes your job a little easier when you got a little wind at your back and you've had a few, uh, you had a winning streak.

JP Maroney: 

Fair enough. So how did you evaluate the bills? That was my question.

Bill Corbett:

First and foremost, I would, I would look at management, uh, and we would do due Dili on management, you know, and make sure there's no skeletons. Um, we would look at the dynamics of the stock, go through the filing. So you would alert. Shareholders are see when the last time they had filed a Ridge statement. So we would do an extensive amount of due diligence. And I would look at it from the eyes of the investor, you know, I mean, is there a significant upside, uh, is there some inflection point coming in which case, you know, maybe there's an FDA approval coming and the stock might rocket. Um, and so when you start looking at those things and you put them all together, then it gets down to, should I put my time and energy into this, into this company because you're right, JP, I mean, time is money.

Your most valuable commodity is your time. And what's the opportunity costs. And going down that path with someone that doesn't work out and you missed, you know, the next 10 X. And so that's always in your mind, I, I think the priority would be the individuals. I really think that the, the people that have had a track record of executing are the guys that you want to bank, you know, and I've heard this before and, you know, I'd rather have, you know, a, you know, a quasi questionable kiddo opportunity or technology with a world-class operator than phenomenal technology with a average operator. I think you can set yourself apart by piggybacking on guys that have had a track record. And, you know, I mean, look at anything from Steve jobs, Apple was almost bankrupt. He comes back. I don't think it's an accident, you know, that it does so well. I think that if you look at Elan mosque, not that I got the opportunity to invest in anything you had. Cause they're all billion dollar companies. But if I was a Goldman Sachs, I'd be riding, I'd be riding Elon Musk, you know, coattail the whole way he was a guy just doesn't seem to make mistakes. You know, he's, uh, he's almost like Marvin Davis, you know, in the, the new century,

JP Maroney:

You know, you talk about your sports analogy before too. You can say it right. How does a coach go from one team to another? And all of a sudden that team is at the NBA finals in the world series and so forth.

Bill Corbett:

Yeah. It's very true. I mean, I know talent has something to do with the team, but there's a reason why they're always in the playoffs. There's no question about it.

JP Maroney:

Then I'm going to ask, I normally don't like asking questions. I don't know the answer to, but there's a book I read. There's a book I read. I actually went back and read re-read this book several times. Over the years, there was a book called honor roll by Howard Jonas. He was the guy that started the callback industry many, many years ago. Um, he owned, um, I think it was prodigy for some period of time, but way, way back. But he had a chapter in the book called golden the gutter. And I've always been fascinated by this and we've had personal experience with this, but he said some of the best people he ever added to his team were people who were exceptional performers were great operators or whatever their core skillset was within an organization. But for some reason they'd gotten kicked to the curb could have been Oh eight Oh nine financial crisis.

It could have been getting in bed with the wrong people, whatever it might've been, but they'd gotten kicked to the curb. And then he had found some of his best talent in the gutter, basically that golden, the gutter. How have you been able to over the years assemble the teams for the particular projects? What do you watch for, and not just the leader or the operator, but the kind of people that you bring together for deals. How have you built the network? I mean, can you give us some sense of how you've put together that roster?

Bill Corbett:

Yeah. I, I think that, um, you're certainly looking for, you know, hungry guys, um, or gals, you know, I think that, uh, you want people that have, you know, had some success somewhere along the way. Um, they, they work together. They, they share a common theme, which is they're street-smart and book-smart, um, humble. And, uh, they generally tell the truth. You know, I think it's really important to be surrounded by people that, uh, are constantly trying to do the right thing. It's a wall, Street's a tough place. You know, you've got regulatory constantly with FINRA and the sec, and you want to always be compliant. I was very fortunate. I was never sued and didn't have any customer complaints. And not that I was better at making people money. Cause I certainly wasn't. But you just try to always surround yourself with, you know, a team of guys that are smart, uh, and that know what they're doing and bring value add.

And I think people's skill sets vary from person to person. Um, and so if you can find talent that fits into a group of people that share a common goal, which is to increase market cap, uh, you know, then everyone wins and it, it truly is rewarding. It's a great feeling. When you fund a company, the investors work, maybe they have a product that, you know, helps leukemia patients or, you know, they have a product that helps the consumer in some way. So, you know, I always felt that, you know, when I early in my life, I wasn't sure if I was going to get into wall street or if I was going to go sell insurance. And I just felt like, you know, the opportunity on wall street was amazing to me because, you know, I, I started gambling as a golfer when I was young.

And to me, you know, wall street was a little bit like that, but each day was different and you would meet companies and CEOs that love what they're doing. They're passionate about it. Uh, they give their life to it and they're committed. And, and I like people like that, you know? And, and so I would constantly look for people that are like that. And then I would continue to, to make sure I was available to them. I would continue to perform any way I could for them with my brokerage firm, like you guys, having all kinds of ancillary relationships and that can augment and help build the business. And they get all of that under one umbrella, if you think about it. So in theory, you're, you're setting yourself apart from a lot of your competitors because of the way you handle yourself. And because of the things you bring to the table to that particular company, and I would try to do the same so that we would have multiple bites at the Apple to help them fund round two, three, four, sometimes we'd have four or five, we'd take them public.

We do reverse mergers back then and we'd take them public. And then we would have multiple transactions. And if they execute it, they made you look smart. And now all of a sudden you're doing trades that, you know, that were two or three or four or 5 million, you're doing 10 and 20 million transactions at multiples where you did the first one years ago. And you're basically doing that. Not only because it's, you know, it's, self-serving, however, you don't want to lose that customer to a Goldman Sachs or a DLJ, or, you know, Morgan Stanley that are starting to come down to where you live, which is the micro-cap world and when they are not doing so well, the last thing you want to do is see, you know, your competition with an, a bold bracket, uh, that might have more resources than you. So I think that, that you're protected through the relationships that you establish.

JP Maroney:

Interesting. Um, I want to get into innovative payment solutions before we run out of time. Before we get into that, uh, once again, if you're watching or listening to this episode of the deal flow show, you can get access to our archives, our previous episodes, as well as subscribe and follow us and get access to our future episodes by going to the deal flow show.com. That's the deal flow show.com and okay, so bill Corbett, innovative payment solutions, let's talk about today, what is the business that you're running? And it's a disrupt in my opinion, a disruptive technology and, uh, serves a great place in the market. I want to talk a little bit about that and maybe where you're taking the business.

Bill Corbett:

Sure. I appreciate it. Thank you very much. So, um, when I was an investment banker, I took a company public called [inaudible], uh, which was deploying, uh, let's call it kiosk in Mexico. Uh, and we spent about five years. Uh, I helped the company brought in public raise capital for them, brought in some advisers and tried to help any way I could, um, and built a business that was using about 2 million Mexicans, uh, in the network to send digital payments in Mexico. Um, and it was very, very, uh, compelling in Mexico because there's long lines to, you know, make utility payments or to make micro, micro loan payments. And this kiosk, which was a very sophisticated machine, had the ability to do that. Um, we sold the business last year, did about 11 million. We saw an opportunity to grow a FinTech out of Southern California that would focus really, uh, JP and Paul on the, um, what we call the underbanked and the unbanked.

And what we mean by that is these kiosks are extremely sophisticated. So one could pay a utility bill while they're standing in Los Angeles for their dad's utility bill in Mexico city, uh, top office cell phone. Uh, so we're in the early stages of building a FinTech. Uh, we find it, um, very exciting because these kiosks can operate as a, as a bank, if you will, uh, for the unbanked or the underbanked, uh, there's uh, more than 12 million in Southern California, all the way up to where I live. Uh, I live in pebble beach and run the business out of Southern California. But if you think of the bread basket of Salinas, uh, all the way down the San Joaquin Valley, you know, 80% of the fruit and vegetables are grown, uh, in this state. And with that there's $40 billion a year being wired to Mexico, $40 billion, and of which, um, a large part of that comes from California.

So our objective really is to deploy kiosk, uh, in the next several months, that operate as, um, what we would call a digital wallet. Uh, it has the ability, the machine will have the ability to kiosk to wire money to Mexico. Uh, we were, we want to create our own stable coin. It's a dollar back stable coin that we can send money to Mexico with, uh, that we feel would use blockchain in a closed loop. We think that's very, and you know, when you look at the macro side, guys, this is a population, the under-banked and unbanked that hasn't been treated too fairly by, uh, the, the Ola gobbly of, of the big conglomerates that have, um, charged a lot of money, uh, to send money to Mexico and around the world for 20, 30 years. Um, so we see this as, uh, convenient having a kiosk where they can do these things, uh, price competitive, where we think it could be cheaper than anything in the market.

Um, and we think that it'll settle quickly and within a wallet, we have the ability for them to put money in the machine. We have these, uh, aggregators in Mexico that were, we have this long legacy with, for five years. Um, but it with any wallet and they download an app, they'll be able to send money while they're sitting on the couch and not have not have to run out to the money transmitting businesses. And, and, um, we think that's, that's a really good point. So we're, uh, we're building a FinTech. We think as a pub co guys, uh, we have many opportunities to, uh, add ancillary businesses and roll up some businesses into it. Um, my goal, you know, which is what I, my dream would be to build a two to $300 million company in the next couple years and, you know, be successful at helping a group of people that could use a break and, and get a piece of this 40 billion a year. That's going to Mexico.

JP Maroney:

It's only us down. Or do you see this spreading out in other markets? We've had some recent conversations with our banking contacts and the whole buzz in Honduras and Guatemala and everywhere is contactless banking, contact lists, um, subsidies contact with bill pay everybody because of COVID, it's driving, obviously driving this. Do you see expanding? Where, where do you see it headed to get to that two to 300 million?

Bill Corbett:

I see, you know, the world is wide open. I think you could send money to Mexico. You could send money to India. Uh, like you're saying Guatemala, I think there's, there's many different avenues for us to explore. I think there's plenty of business here to build a remarkable business just in Southern Cal, up to the central Valley and, and Salinas. Uh, however, you know, if, if you look at the macro side, uh, you could become really a distribution hub. So one comes up to the kiosk and they want to buy a lotto ticket in Mexico. They want to pay their dad's cell phone bill in Mexico, and they hit a button. Uh, maybe they want a microloan, which I know is, is kind of a dirty word, but, you know, the reality is, is if you do it right, you're providing a good service. So let's say you want to get into, you know, betting on NFL games in one day.

So if you have a thousand kiosks throughout California, you know, you wake up one day and you say, Hey, I think the shareholders would benefit from having this in the kiosk. And so the kiosk really is, is in the path of their lifestyle, wherever that is, and a grocery store or a liquor store. And so I think if you get in with the right influencers, guys, you can spread like wildfire, if you're competitive, uh, and it settles quickly. I think there's all kinds of different businesses. We can grow out of this, but it starts, I think with, you know, developing a brand, getting them comfortable with sending the money to Mexico and, and on the other end, maybe, maybe it's cheaper. I went on the receiver, receiving it, and it's easier for them with their, the way that they, um, they conduct their business.

JP Maroney:

You currently have the kiosks, or where are you in the process?

Bill Corbett:

Uh, we have 60 kiosks in a warehouse in our warehouse, in Southern California with COVID. It kind of slowed us down a little bit. Um, however, when I look at the what's going on, the, the remarkably, the wire remittance business to Mexico has gone up about nine or 10% year over year during, despite the, the virus and, and the COVID. So I think what we're seeing guys is, you know, people that do essential jobs, you know, that they pick our, our lettuce and it, you know, do jobs that are essential, uh, on the front lines and they have money and they're making money, and they're really committed to sending that money back to Mexico for their families. And so if we can help them with that and make it more convenient and cheaper, uh, we think we could, we could grab market share. And ultimately we think we can build a, a really compelling business around it.

When, when do you see yourself deploying these kiosks? I would say to you that in the next 60 days, the next 35 to 60 days, we'll be deploying, uh, we've got some great advisors that are helping us. Uh, we've got a great law firm that's into blockchain technology, uh, advising us on, on, uh, what we should be doing, because it's imperative that you're compliant. Uh, obviously in everything that one does, you should be compliant. I think life, uh, is a lot easier that way. Uh, and so, uh, we're making sure we have good counsel, uh, on making sure that, you know, we're doing everything the right way, because if we build it properly the right way, uh, we think will thrive. And there's no reason to do it any way, but the right way. So it's taken a little longer because of COVID, but, uh, very people are very receptive to wanting to put the kiosks in their businesses. Paul, what are you

JP Maroney:

You considered, you're not a bank. Um, what, what technically, how are you classified as a business? Well, think we were

Bill Corbett:

Really fitting into the mold of the FinTech, JP. Um, you know, when I look at some of these companies, uh, it's a hot space, uh, square in San Francisco. Uh, I've watched grow from an, from an early day. Um, I, PayPal is killing it and I'm not in any shape comparing us to PayPal, but, you know, they've gotten into the, the money remittance business, uh, they've really hurt MoneyGram and Western union. Uh, they're very good at it. And I would say we're a, or a startup, that's a FinTech, um, that, um, is into digital payments and finding the quickest, cheapest way to make payments, uh, abroad.

JP Maroney:

Well, the reason I asked the question and I don't know how deep you want to get into this or open this can of worms on, on the air, but, you know, the cannabis industry is historically one of those unbanked or underbanked industries because of the federal guidelines or the, the, the, I guess, uh, conflict between state and federal laws. Right. Um, but in, in a reality, you're sort of an on-ramp to digitize cash, right. And, and if you are an on-ramp to digitize cash, do you see a future for y'all in that cannabis industry? Is it sorta like you're okay if it happens, you just don't want to know about it, or is that a, is that a serviceable? Um, because, you know, obviously with patriotic and all those are the things you're, you're dealing with certain limitations and caps and all of that, but I could, I could, I mean, I know these guys, some of these guys that got, you know, pallets of cash, they're paying their taxes in cash. They're paying their employees in cash because they're unbanked. Yep.

Bill Corbett:

I it's a good point. I mean, I, being in California, I would welcome it. Um, I've had discussions with banks. I think ultimately if we could find a partner in a bank that was wide open, I know that's a slippery slope with the way the feds look at it, but if we could find a bank, we could really help the cannabis industry. I want to focus on proven the platform, uh, in the short term with money remittance, uh, and payments and a distribution system. But I would think as an adjunct, that's a, that's a phenomenal business. Absolutely.

JP Maroney:

Yeah. And you're speaking my language when you talk about having a platform and then looking at that platform from a perspective of monetizing with multiple opportunities and offers so many businesses, they get the blinders on and they see their particular product that they're selling that product. They're going to go look for more people, as opposed to saying, here are the people I'm solving problems for, what are the other problems that I could solve for them from, for those same people, with a singular acquisition costs and kudos to you and innovative payment solutions for what you're doing. I wanted to ask though, bill, are you guys the middle of any kind of funding round right now? Are you looking for capital, right?

Bill Corbett:

Not right now, but you know, Paula, as, as we talked about today, I mean, I think one has to keep an open mind and to raising capital. I think I, you know, in 30 years, I can't remember saying a CEO looking at me saying, bill, I don't really need any money today. I mean, I'm just amazed at all of these different businesses that I've funded or I've gotten to know they all need money all the time. Um, so I would say to you that I'm, I'm, I'm always looking for partners to help us grow. Uh, um, I'm trying to expand eyeballs. I, to me, I think liquidity is key. I think it's the lifeblood of a pub coasts. And I think that one has to keep an eye on making sure their stock is, got eyeballs on it and you're relevant. And, you know, you're putting out, you know, press releases that are, um, completely compliant, but that are in an orderly way informing the shareholders or, or people watching yet. So I would say to you, I'm always, I'm always open to looking at ideas, uh, especially, you know, if we can, if we can execute, then we get the stock higher through that execution. We raising money at less diluted values. Cause down here we're, we're a small company, but I'm a little selective on, you know, opening the flood Gates down here. But that being said, I'm always open to, uh, discussions about capital

JP Maroney:

The deal flow show team sits at the center of deal flow. And like I said, we have resources, capital sources, um, people with opportunities. What kind of people would you like to hear from, from our audience or be introduced to Daniel Panorama, our producer, Paulie and our set myself. Um, and then what's the best way to reach out to you?

Bill Corbett:

You know, I, I would say my website would probably be the best way to reach out. Um, I'm, I'm very interested in expanding my network. This is the first time I've been a CEO after, you know, 30 years on wall street. So, you know, I I'm, I'm open to people that you think they can create value for my shareholders. Uh, I, I've got an advisory team that I'm putting together that it's, it's exceptional. They're wonderful guys. Um, they have great track record, uh, anything that I can do to, uh, uh, raise, I guess, you know, raise awareness to the company, uh, would be good for my shareholders. So, uh, I'm, I haven't really done much at all on IRPR I'm going to start to look to kind of do some of that stuff as we get ramped in here. Um, but I would say to you guys that, um, anyone that you know has a track record and it looks like value add I'm, I'm always looking to try and increase shareholder value.

And I feel like a coach in a way where I'm, I'm gathering advisors and people to the team that I think make us a great ball club, you know, and hopefully with aspirations to, to play in the playoffs and, you know, eventually win a championship. My, my goal is, is to make the shareholders a bunch of money and see evaluations that make us proud over the next several years. That's kind what, what I'm doing. It's my full-time position that I live and breathe in. And hopefully we bring the right players to help us do that.

JP Maroney:

Are you going to make your acquaintance looking forward to offline conversations as well? And seeing what value we can add to innovative if you're watching or listening to this episode of the deal flow show and you're thinking, Hmm, maybe I'd make a good guest for this show, or maybe I know somebody who would be a great guest for the show, be sure to reach out to us@thedealflowshow.com. Of course, when you get there, you can also subscript subscribe, follow us. You can get access to all of our previous episodes as well. On behalf of our team here at Harbor city capital and the deal flow show team, mr. Paul Nicoline of JP Maroney, bill Corbett, innovative payment solutions. So good to have you on. We'll see everyone in the next episode. Thank you

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