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Devin: What do you see now as your superpower?
John: When you're working with experienced people, you know what it's like to be in the trenches trying to keep a business running and raise capital. You have this attitude of “we will find a way” that powers my superpower if I have one.
Folla Capital CEO John Panaccione speaks in a matter-of-fact manner that makes his unusual wisdom and insight seem banal. It’s not. Trust me. He gets things others miss; you’ll want to tune in to understand what he’s sharing.
“We're an investment banking firm,” John says as he begins introducing his firm. “We help small businesses and entrepreneurs think through capital strategies; if and when they need to raise capital, we help them do that. We focus on minorities, women and veterans.”
John served as an Army paratrooper in the 82nd Airborne Division in the first Gulf War. “Because of my background, we've served a lot of veterans,” he says. “But we're not exclusive to those three groups.”
Folla Capital helps small businesses raise capital at a meaningful scale, typically over $1 million. FINRA and the SEC authorize the firm to conduct offerings under six different exemptions from registration, including Regulation Crowdfunding and Regulation A+, offerings open to everyone. The firm often helps clients raise under Regulation D 506(c), offering offerings open only to accredited investors.
Looking at the investing landscape, John sees advantages for issuers using debt rather than equity.
“We're a big believer in debt offerings for small businesses,” John says. “One of the biggest advantages of a debt offering is the investor doesn't have to wait till the company sold to get their money back.”
John teased the audience with an upcoming $10 million debt round for a small business in Virginia that is building a manufacturing facility.
Folla Capital is currently supporting veteran Marines with a raise for Rally Point Grill. The eight-year-old restaurant business is working to create a successful franchise model to facilitate expansion. The restaurants feature genuine artifacts from past service, much like a museum, to honor veterans in the local community around the restaurant. The $1.2 million revenue-sharing offering is open to accredited investors.
John uses his superpower, a combination of experience and a can-do attitude, to grow his business and help clients.
AI Episode Summary
1. Devin Thorpe hosts the Superpowers for Good Show and introduces John Panaccione, CEO and founder of Folla Capital, emphasizing John's dedication to supporting the veteran community.
2. John's firm, Folla Capital, is an SEC-registered broker-dealer investment banking firm that helps small businesses and entrepreneurs develop capital strategies and facilitates capital raising, particularly focusing on minorities, women, and veterans.
3. John expresses his dislike for the term "crowdfunding," preferring to describe the capital raising process as using internet technology to leverage various SEC exemptions to fund businesses.
4. Folla Capital has successfully completed several capital raises using different SEC regulations, including Regulation D for accredited investors and Regulation CF (crowdfunding) for general public investment.
5. John highlights an innovative debt offering through Folla Capital that enables Rally Point Grill, owned by prior-service Marines, to raise capital as if they are the bank for their franchises, allowing both investors and franchisees to benefit from the capital raised.
6. Devin discusses the importance of investment crowdfunding in filling funding gaps that banks can't, highlighting the diversity of crowdfunding's role in different stages of companies' growth.
7. John believes in the value of debt offerings as opposed to equity for small businesses, as it allows investors to potentially see returns without waiting for a company sale.
8. An example of a complex convertible bond offering is mentioned, starting at $10 million for funding a manufacturing facility in western Virginia, with an intention to roll into a $40 million Regulation A offering down the line.
9. John credits his military background with the paratroopers as a source of his 'superpower,' which he sees as the never-quit attitude and a strong focus on teamwork honed by his experiences that lead towards finding solutions during tough times.
10. John emphasizes the significance of building a strong team of advisors and mentors, especially in entrepreneurship, to foster resilience and suggests that those new to business should not go it alone and instead learn from experienced individuals.
How to Develop Experience and a Can-Do Attitude As a Superpower
John didn’t come by his superpower–the combination of experience and a can-do attitude–as a genetic trait. He earned it through two framing experiences.
“I've been a small business owner and startup entrepreneur,” John says. “I've raised capital the old-fashioned way, and everything that could go wrong did go wrong over 17 years that I ran my startup and I sold it. I like to say I had to have the smile surgically removed from my face the day after I sold it.”
That experience provides one-half of his superpower. The other comes from his military service.
I was privileged to serve in the Army. I was privileged to serve the country. My specialty was I jumped out of airplanes. I was a paratrooper in the 82nd Airborne Division, and that occurred in my 20s. I was a young man then, my early 20s into my mid to late 20s is when I served there.
I was around great leaders, and I learned a lot from great leaders. The top leaders in the Army lead that division because it's the first one to go to war.
The culture there was unbelievable. A paratrooper typically–never–has enough resources and is always surrounded. But the culture is you're never going to lose; like there's always a way to win.
So, the can-do attitude he learned in the Army pairs with his business experience to give him a superpower to support entrepreneurs.
He shared a defining experience from his days as an entrepreneur:
I had three banks that provided debt to my first company, a total of about a little over 1.4 million–three different loans. Then, one day, I got three letters from three banks at the same time calling their notes back. I had 30 days to find that money.
I remember popping up, thinking about it long and hard. One of the things the military does is it teaches you how to make decisions under pressure. So, I figured out a way out of that–I won't bore you with the details, but I worked a deal with the bankers and my investors to get us through that.
And we got through that. That's usually lights out for a company when that happens. But I figured out a third way.
The story is powerful evidence of his superpower!
John offers two bits of advice for developing a superpower like his.
The first is resilience. “To become resilient, you have to expose yourself to danger and failure. And a lot of us don't want to do that. We have a culture where failure is bad,” he says. The reality is our challenges are our most valuable experience.
Second, he says, is to remember that business is a team sport. “So, if you're new at it, I'd say quickly develop a team of advisors and mentors around you that have been down the trail before.”
By following John’s example and advice, you can strengthen your ability to leverage your experience and develop a can-do attitude. With practice, this could become a superpower that enables you to do more good in the world.
Remember, however, that research into success suggests that building on your own superpowers is more important than creating new ones or overcoming weaknesses. You do you!
Guest Profile
John Panaccione (he/him):
CEO, Folla Capital
About Folla Capital: Folla Capital is an SEC-registered Broker-Dealer. We help small businesses raise capital and provide general investment banking advisory services for startups, active businesses, and those involved in mergers and acquisitions.
Website: www.follacapital.com
Company Facebook Page: fb.com/FollaCapital
Biographical Information: John Panaccione, co-founder of Folla Capital, holds an array of SEC licenses, including Series 7, 24, 79, and 63. Folla Capital is an SEC-registered broker-dealer and helps entrepreneurs and small business owners raise capital. Before his Folla Capital venture in 2020, he co-founded and led the LogicBay Corporation, a software company, from 2003 to its 2020 acquisition by Pluribus Technologies, gaining extensive experience in small business finance and mergers and acquisitions.
In 2013, he co-founded VETtoCEO, a non-profit aiding transitioning military personnel in considering entrepreneurship. In 2022, he facilitated the merger of VETtoCEO with Warrior Rising. Before his entrepreneurial career, John held leadership roles in operations and sales across various corporate sizes. He served six years as a U.S. Army officer, primarily in the 82nd Airborne Division paratrooper units.
John holds a B.S. in Criminal Justice and an M.B.A. from Bryant University, focusing on Technology and Operations Management.
Twitter Handle: @johnpanaccione
Linkedin: linkedin.com/in/john-panaccione-88272/
This Investment Bank Serves Small Businesses Led By Women, Minorities and Veterans - s11 ep38