Why Should An Investor Consider PrefLogic?

When looking back at world changing technology, it’s hard to imagine life without certain inventions. Beyond the invention of the automobile and the airplane, major modern era advancements have included:

  • Personal Computing 40 years (later popularized by Microsoft, IPO 1986)
  • Cell phone 35 years
  • Internet 28 years (later popularized by the Netscape browser, IPO 1995)
  • Smart phone 24 years (later popularized by launch of the first iPhone, 1995)
  • Social media 20 years (later popularized by Facebook, IPO 2012)

I took a low-budget trip to Europe from my home in the US during medical school. This was done before the cell phone was commercialized. I can’t imagine parents allowing a cross-ocean trip today leaving the connectivity of the cell phone at home. For those old enough to remember the advent of some (or each) of these revolutions, many people were in the dark about the power and inevitability of what was coming, and often until the latest stages of development.

In my opinion, Blockchain meets Capital Markets is no different. The combined power of the internet, social media, network effects, the JOBS act and now blockchain technology has ushered in a new paradigm, and PrefLogic has elegantly harnessed these factors empowering opportunity through their Securities Matrix.

What does this mean for the investor? With major technological disruption, companies that form the infrastructure of the new market have the potential to be some of the biggest winners.

As most people are aware, some, if not most, of the most successful investment ideas are vetted by Wall Street, Wall Street insiders and Venture Capital groups. What this means is that most early stage and growth capital investments are taken before retail investors have an opportunity to invest. The entry of retail investors at a later stage typically funds the high-multiple exits of early investors.

The eagerness of global retail and non-accredited investors to be involved in early stage investing is largely what fueled the 18-month ICO experiment of 2017–2018. This chapter in history will always be remembered as proving the immense power of asset/value distribution and network effects provided by the internet. What was lacking was proper investor education, notification and structure required by regulatory agencies including the SEC. What was also missing was the understanding that the investment did not represent an equity stake.

To tie these statements together, four factors spell potential success for a PrefLogic investor: access, equity, early awareness and infrastructure investment.

Categories of infrastructure companies in the Digital Security space include:

1. Issuance platforms

2. Exchanges

3. Custody / Banking

4. Cap table management

5. Legal

6. Insurance

7. Consulting / Management

8. Education

Regarding Issuance Platforms, one of the primary ways to evaluate these is to look at the structure and the initial funding of the company. Also, is the company selling equity or “utility”? There are a limited number of Issuance Platform companies that are traditionally structured and have allowed equity investment. Investment in companies such as Securitize, Harbor, OpenFinance, Vertalo, TrustToken and Securrency has been through closed seed, Venture Capital and Corporate rounds. Most recently announced on 9/24/2019 was a $14M raise by Securitize with funding from three multinational banks. This list is not exhaustive and may leave out a few serious contributors to the developing ecosystem.

There are several non-traditional issuance companies that are open to investment. Projects selling utility tokens and not equity or true ownership in the business include: Polymath, Ravencoin, OWN, Smartlands and Swarm. Comparing the market value of a utility token to the market value of a corporate entity is meaningless.

One last option for investment in the Issuance Platform space is tZERO. The tZERO preferred security token (TZROP) is now available for trading for both accredited and non-accredited investors on the Dinosaur Financial broker-dealer ATS. This is not a true equity investment, but instead (based upon board approval and profitability) the token holder will be entitled to 10% of adjusted gross revenue as a quarterly dividend.

PrefLogic is the only US Digital Security Issuance Platform that is offering equity ownership to a broad base of investors. Although post-money valuation estimates are not disclosed for the traditionally structured companies listed above, a PrefLogic market cap of $20–25M likely represents a significant discount to sector competitors.

Market Size and Opportunity

PrefLogic’s target audience is very different from most of their competition. PrefLogic feels very confident in its ability to efficiently service all issuers, large and small, but upon product launch will focus its efforts on a ground-up approach, serving small to medium size issuers. This group is immense, underserved by Wall Street and in desperate need of low-cost finance.

The chart below represents PrefLogic’s target audience. This includes online influencers with aggregated audiences, 270K registered brokers, 1.3M real estate agents, 18M direct network marketers and 34M small to medium size businesses in the US alone.

PrefLogic is offering empowered opportunity through capital access to the groups that need it the most; leveling the playing field between Main Street and Wall Street.


PrefLogic’s traditionally structured competitors have chosen a high-fee pricing model similar to placement agents today. These companies may struggle to adapt as efficiency-driven, low-cost solutions enter the market. PrefLogic’s Securities Matrix and other services will be provided at a significant discount to its competition.

We have already seen some pivot or service expansion among the early participants in the issuance space. Harbor was granted a Broker-Dealer license from FINRA in September. One month earlier Securitize became a SEC-registered transfer agent. The financial markets are vast and this space has room for many winners and new entries.

Affordability to a large market in significant need spells success.


The power of network effects in the ICO markets was profound, and simply can’t be ignored. While PrefLogic’s business plan has an aggressive budget to be called on for marketing and growth, the company has invested zero dollars in marketing to this point. Prior to the upcoming announced Reg S and Reg D 506(c) raises, the company has successfully relied heavily on network effects to initiate its presence in the market. In July of 2019 the company signed a Business Development agreement with a highly engaged online influencer (Jeff Kirdeikis/theci.network) with connections to over 1.6M investors through both paid and unpaid services. PrefLogic plans to aggressively partner with additional influencers.

Because of a growing PrefLogic “fanbase” that includes more than 6 highly engaged online influencers and 1500 Telegram channel enthusiasts, PrefLogic’s marketing plan is low cost, effective and self-propelling. PrefLogic is embarking on a Blue Ocean Strategy whereby issuers become marketers, marketers become issuers and the true exponential power of network effects is monetarily realized.

Issuers will also serve as a sales force at no cost. Users of the Real Estate Fix-n-Flip and other Turnkey Matrix products will attract investors by offering a safe collateralized, or asset-backed investment opportunity. After they do the work and share the income, users will then market the Turnkey Matrix to their investors to repeat the process for their own gain.

In summary, PrefLogic is offering a highly efficient and affordable solution to a market that is currently underbanked, and who continue to be underserved by our competitors. An investment in PrefLogic represents early stage access and an equity stake in an infrastructure company involved in the rapidly evolving remake of the global capital markets.

By: R. Jeffrey Cole, MD

Advisor to PrefLogic


DISCLOSURE REGARDING ENDORSER. Dr. R. Jeffrey Cole, the author of this blog, owns a promissory note that is convertible into a significant number of shares of PrefLogic common stock at a fixed conversion price. In addition, PrefLogic has issued to Dr. Cole shares of PrefLogic common stock to compensate him for providing management and marketing advice to PrefLogic.

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