Presentation highlighting the catalysts that not only inspired, birthed and fueled crowdfinance, but the catalyst that will ultimately enable it to scale. This presentation was delivered on May 5, 2016 at Crowdfund Beat's 3rd Annual Crowdfunding USA Conference held at the National Press Club in Washington DC. The video of this presentation can be found at: https://www.youtube.com/watch?v=T4TsouQTw6k&feature=youtu.be A MUST-VIEW for anyone in FinTech, P2P, Crowdfunding

1. The Catalyst that will
Enable Crowdfinance
to Scale
Crowdfunding USA Conference
National Press Club, Washington DC
May 5, 2016
By Dara Albright, President of Dara Albright Media and James A. Jones, CEO of IRAeXchange.net

2. Dara Albright
Speaker, writer & influencer on topics
relating to market structure, New
Issues, FinTech, P2P & crowdfinance
daraalbright.com
www.linkedin.com/in/daraalbright/
Twitter: @tothestoics
Presenter

3. Relentlessly Searching for Catalysts
A Catalyst that Causes a Stock to Rise and Fall A Catalyst that Fuels an Industry
Source: William O’Neil + Co.
KELLOGG COMPANY 1989 NETSCAPE 1995

5. Catalyst for Market Collapses & Economic Turmoil
• Did you know that in during the roaring
twenties:
– 60% of cars were bought on installment
credit
– 70% of furniture was bought on
installment credit
– 80% of household appliances were
bought on installment credit
– Between 1925 and 1929 the total
amount of outstanding installment
credit more than doubled from $1.38
billion to approximately $3 billion
– The stock market grew 657% as
investors raced to invest in companies,
that sold products no one fully paid for,
on a mere 10% margin

6. A Tech Bubble or Financial Revolution?

7. Crowdfinance is a REVOLUTION!

8. The Catalysts of Crowdfinance
The catalyst that
inspired
crowdfinance
The catalyst
that birthed
crowdfinance
The catalyst
that fuels
crowdfinance
The catalyst
that will
enable
crowdfinance
to scale

9. The Catalyst that Inspired Crowdfinance
Social Media Redefines Global Communications

10. It took man a little over 4 million years to develop
the written language!
Today, in a matter of just 1 second:
• 7 PCs are sold
• 9 new people log on to the Internet for the first
time
• 25 cell phones are sold
• 257 search queries occur
• 1,157 videos are viewed on YouTube
• 2 million emails are sent
Communications is Advancing at Warp Speeds

11. Did a Bubble Burst in the Middle of a FinTech Revolution?
NO! It’s merely a sign that the industry needs to explore news ways to scale

12. The Catalyst(s) that Birthed Crowdfinance
Two Events that Redefined Global Finance

13. Catalyst that fueled the
Facebook buying frenzy

14. • P2P / Marketplace Lending has been
nothing short of a phenomenon
• According to Morgan Stanley, in the US,
marketplace loan origination has doubled
every year since 2010, to $12 billion in
2014. Meanwhile, the trend is playing out
globally, notably in Australia, China and the
UK. All-told, such lending could command
$150 billion to $490 billion globally by 2020.
• Venture Capital firm, Foundation Capital,
predicts that by 2025, $1 trillion in loans will
be originated online globally
The Catalyst that Transformed Global Credit Markets

15. The Catalyst that Fuels Crowdfinance
The Demand for Economic Equality

16. Catalyst for Increasing Wealth Disparity

17. Equity Markets are Unjust

18. Equity Markets are Unjust
STAGGERING FACTS ABOUT UBER:
• Uber is now worth 4 times the value of publicly-held
Hertz and Avis combined. In fact, privately-held Uber is
valued higher than 80% of the S&P 500.
• Uber raised a $1.25M seed round on AngelList in 2010 at
a $4M valuation. Only accredited investors were allowed
to participate. A $10,000 investment in Uber on
AngelList in 2010 would be worth $127,500,000 today!
• With over $8B of institutional dollars invested into Uber
thus far, Uber is one of the fastest growing companies in
history. Yet not one Uber share is appreciating in a small
retail investor’s retirement portfolio. Not one.
• Uber is not an anomaly. Companies today create value
far faster than ever before. Unfortunately, they are
creating value only for those investors who the
Government deems as “worthy” of accessing growth
stocks.

19. • Small businesses can no longer
rely on banks for loans
• With interest rates at historic lows,
investors can’t afford to be
weighted in traditional fixed-
income assets
Credit markets are just as flawed and unjust as public equity markets

20. “Qualified” Investors Have Been Flocking to Alternatives

21. Private Credit Can Provide Greater Yield with Less Volatility

22. A new McKinsey Global Institute report finds it may be time
for investors to lower their expectations

23. Retirement
Assets of
100 CEOs
Source: Center for Effective Government
Institute for Policy Studies
Retirement
Assets of
41% of
American
Families
The Inequality of Retirement Assets

24. “Tough Noogies” is NOT a Solution!
• The best solution that our brightest economic minds
have to offer is:
– “Investors simply need to lower their expectations.”
– “People simply need to save more Money.”

25. The Solution – Democratize Access to Tax-Deferred Alternative Investing
• Legislation
– Reg A+
– Title III Crowdfunding
– Intrastate Crowdfunding
– HR 2187
• Financial Innovation
– Crowd-centric retail alternative
products
• Financial Technology
– Making tax-deferred micro
alternative investing simple and
affordable

26. Alternative investment products AND access to these products have been escalating
Orchard

27. And now, we finally have a “modern”
retirement vehicle for a new FinTech driven
industry

28. The Catalyst that will Enable Crowdfinance to Scale
Tax-deferred Micro Alternative Investing will
Allow Crowdfinance to Scale

29. CLOUD BASED SERVICES
The scalability of all crowdfinance platforms will ultimately depend upon
their ability to penetrate the $14 trillion retirement market!
Cloud-based ISCP™ is the retirement vehicle for the next-generation alternative asset
investor

30. This modern SDIRA can do for crowdfinance
today what the IRA and 401k had done for
mutual funds 30+ years ago – allow an nascent
asset class balloon into a multi-trillion dollar
industry

31. History is Repeating

32. “The best way to predict the future
is to create it.” – Abraham Lincoln

33. James A Jones
Vice President Business Development
IRA Services Trust Company
CEO
IRAeXchange.net
Presenter
Linkedin: https://www.linkedin.com/in/selfdirectediravisionary

34. The Retirement Market
• $14 Trillion - 50 million IRA accounts
• Households $200,000+ own 80% of IRA worth
• Less than 1% are investing through Self-Directed IRA’s
• More than 99% of equity, P2P or real estate crowd
funding are investing with tax inefficient cash accounts
paying full taxes every year

35. The New IRA and 401(k) Market
$7.6 trillion in IRAs
$450 billion annually in IRA rollovers from retiring 401k’s
Total IRAs savings Total 401(k) savings Total savings in retirement accounts
$6.8 trillion in 401(k)s
Combined $14 trillion in
retirement accounts.

36. For every $1 in a personal checking and savings
account, there is over $12 in an individuals
retirement savings account

37. So What’s the Problem?
• Process:
– Technology is based on 40 year old banking legacy IT systems
– 3 steps – Open account, Fund account, Investment Direction
– 4-6-8 weeks
– No integration from Platform to SDIRA Custodian
– Two accounts needed
• Pricing:
– Manual process is labor intensive
– Business model is annual fees (open-$50-100, Per asset $100-495 Per Year, AUM quarterly-$50,
Transaction-$100 Per)
• Promotion:
• SDIRA Custodians are “nonfiduciary” trust Co.’s and are PROHIBITED from promoting Client
Acquisition
• Assets Under Management:
– Goes to SDIRA Custodian-No RIA’s
• Non-Scalable:
– systems are geared to retail account “one-offs”

38. What’s Out There Currently?
• A “landing page” is not FinTech:
– The landing page on the platform captures client data for the platform. IRA holder
must then print out application, transfer and investment direction, mail it to the
platform who mails it to the SDIRA Custodian to begin 4-6-8 week process
• Pricing:
– some “deals” with platforms (currently less than 10) that will charge $150 – 250 per
asset, if not regular retail pricing
• Promotion:
– Two custodians offer website links for their clients which is prohibited and has
resulted in zero net new clients for platforms
• AUM:
– Assets are held with the SDIRA Custodian - keeping Registered and Independent
Advisors from participating in client distribution

39. The IRA Services Cloud Platform (ISCP™) Solution
• White-labeled solution: “Your website” IRA
• Cloud-based API: Your Client NEVER leaves your site
• One Account: Yours!
• Lowest Pricing in Industry: 25 bps or $100 Flat
• Scalable: 250,000 accounts per hour
• Facilitates both taxable & non-taxable accounts:
– Both retirement and non-retirement account holding
– Both private securities and publicly traded

40. As Peter Hinssen explains it: “Organizations
need to become networks themselves. It is
the only way they will equal the speed of
the complex adaptive systems that their
market have become.”

41. Thank You!
James A Jones
jjones@IRAeXchange.net
IRAeXchange.net
www.linkedin.com/in/selfdirectediravisionary
Dara Albright
dsa@daraalbright.com
daraalbright.com
www.linkedin.com/in/daraalbright/
Twitter: @tothestoics