In a previous life, Gene Massey was a successful producer of television commercials, including a series which introduced Calloway’s Big Bertha series of golf clubs.
Seventeen years ago he saw the potential to leverage the power of the crowd to help fund the production of movies and television they wanted to see, not what Hollywood thought they wanted.
Even then there was an aversion (though not as large as it is today) to outside-of-the-box thinking in the creation of content, he said.
While he thought of Kickstarter when Perry Chen was playing tiddlywinks, as is the case with many ideas, Mr. Massey was ahead of his time to the point few others could see his vision, including those with the funds to make it happen.
His dream was not over, simply on hold.
A self-taught securities expert with an eclectic background, Mr. Massey is the CEO and Founder of MediaShares, a financial services company providing transactional software and marketing services to companies who raising capital through online stock offerings sold to people with an established connection to the brand. He believes small and medium enterprises (SMEs) are on the verge of having a much more conducive capital raising environment.
Mr. Massey is a featured speaker at FinFair 2015, taking place in New York City on July 29. Mr. Massey will speak on how to leverage your established audience when raising capital.
Mr. Massey is touting the power of the crowd once again, this time via MediaShares. MediaShares technology works best with companies who have large and active online communities who can be recruited as shareholders.
Mr. Massey said MediaShares is fully SEC compliant and works exclusively with issuers and their FINRA-licensed brokers. The software can be adapted to any online equity opportunity, including the coming regulation A Tier II offerings.
He developed a proprietary system called QwikShares which allows investors purchase shares through a company’s website or social media page. Mr. Massey likens it to Amazon’s “One-Click” payment system because it saves the investor’s pre-qualified profile and payment information, allowing them to buy shares online through an ACH debit from their checking account. This allows the sidestepping of pre-funding a brokerage account.
Consider Mr. Massey bullish on Regulation A+, as it allows smaller companies to avoid the expensive IPO and sell directly to non-accredited investors.
“It is the best thing to happen to securities in 50 years,” he said.
“The groundbreaking aspect, the blue sky exemption, is huge.”
Without it, Mr. Massey explained, an offering would have to go through a state merit review in each state where it would be promoted.
He is also not a big fan of the legal actions brought by Massachusetts and Montana which attempt to block Regulation A+ (Montana’s request was denied after our conversation).
“This is about losing jobs,” Mr. Massey said. “Massachusetts did not allow their residents to invest in Apple. They’re notorious for that and are often quoted as being in the Stone Age.”
“State regulators are upset at losing a revenue source,” he continued. “They scream, ‘Oh my! Fraud!’ when they are only out to protect their own jobs.”
“NASAA (the North American Securities Administrators Association) are lip service for state regulators. They fought it with everything they had. They wrote a lobbying letter to the SEC. They did everything they could possibly do to prevent it and it still passed.”
Mr. Massey cautioned that while a welcome improvement, the new standards, once official, are no walk in the park. The SEC still reviews your materials and there is still significant preparation involved.
It is also expensive for a new company. Mr. Massey said the lowest cost he has seen so far is $35,000.
Mr. Massey said when Congressman Patrick McHenry envisioned the JOBS Act, he saw a company needing money sharing their plans on a website and raising money from non-accredited investors.
“I can go to Vegas and put everything I have on red 29, but Grandma cannot invest in red 29 (as a non-accredited investor),” Mr. Massey said. “That’s unconstitutional. They cannot ask how much money I have, just like they cannot ask my race or gender.”
“The SEC is saying you’re too poor to make your own decisions.”
At this point, our conversation goes back to the beginning, and how Mr. Massey’s career in entertainment shaped the development of RealtyShares.
“Entertainment is fan focused,” Mr. Massey said. “Fans care passionately about a project and want to see it happen.”
And that is why some establishment players want nothing to do with his concept.
“Normally the process is for an investor to open a brokerage account,” Mr. Massey said. “Brokers and investment advisers, want traders, not investors because they make their money on the trades.”
With Regulation A+, people will be more likely to buy and hold, which keeps the gravy boat in dry dock much longer.
With MediaShares technology, an investor can sell one share if they want to. Mr. Massey said under his format it works. But why would someone only want one share of something?
“You take a million people with an emotional investment in something and they buy one share each,” Mr. Massey explained, “and you have a massive online community holding a share.”
The hosting project can have a page on their website where buyers and sellers can post classified or bulletin board-style ads with the host essentially playing matchmaker.
Yet the concerns remain, which are remarkably similar to the fears when the financial system progressed from the telegraph to the ticker tape to the phone, Mr. Massey said.
“Yes, with a movie you may lose your tail, but you will have fun,” he added. “You’ll get a copy of the movie, maybe a signed picture. Perhaps you’ll vote in a contest where the prize is a dinner with Tom Cruise or a cameo in the film.”
“Most do not make any money, but the question is have you properly explained the risk to shareholders? People are risking $20, so you are portioning risk into tiny increments.”
Back in 1998, Mr. Massey’s vision was for people to buy stock in the movie and then receive the movie as a dividend. Advisers told him people were giving money on faith for something which did not yet exist. Few understood, with decision makers not among them.