FORM CRS
CUSTOMER RELATIONSHIP SUMMARY

Effective Date: January 1, 2025

Introduction

Distro Channels LLC (“Distro Capital”) operates as a business service provider, specializing in building distribution networks for companies raising capital. While we are not registered as a broker-dealer with the Securities and Exchange Commission (SEC), we comply with applicable laws and regulations, including Rule 506(c) of Regulation D, which allows for general solicitation when raising capital from accredited investors.

Our primary service is the recruitment, placement, and management of independent investment sales professionals (“Consultants”) who are contracted to work directly with client companies. These Consultants operate under the banner of our clients and are responsible for investor outreach and general solicitation efforts as permitted under applicable laws.

Important Note: Distro Capital does not engage in the sale of securities or provide investment advisory services.

Relationships and Services

What services can we provide to you? Distro Capital provides the following services to clients:

1. Recruitment and Placement of Investment Sales Consultants:
We source, vet, and assign independent Consultants who are skilled in capital raising and investor outreach. These individuals work directly for your company, enabling you to scale your fundraising efforts.

2. Management and Support:
We provide optional management services, including CRM tools, onboarding support, and team organization.

3. General Solicitation Compliance:
Consultants assigned to your company operate under your direction, ensuring compliance with Rule 506(c) of Regulation D, allowing for general solicitation when raising funds from accredited investors.

4. Scalable Agent Networks:
Our model includes creating hierarchical structures such as Master Agents and sub-agents, enabling teams to scale effectively under your management.

How do we tailor our services to your needs?

Each engagement is customized to match your company’s fundraising goals. Consultants are carefully selected based on their experience, expertise, and alignment with your industry and capital needs.

Do we monitor investments or provide ongoing recommendations?

No. Our role is strictly limited to building and supporting your distribution network. All interactions with investors are conducted by Consultants contracted to your company.

Our Process

BUILDING A SCALABLE DISTRIBUTION NETWORK

1. BUSINESS ASSESSMENT & ENGAGEMENT

  • Initial Evaluation:
    Assessing the client’s business, market potential, and fundraising needs.
    Evaluating the investment opportunity to ensure alignment with accredited investor interests.
  • Contract Negotiations:
    Structuring agreements to outline roles, responsibilities, and compliance under Rule 506(c).

2. STRATEGIC ADVISORY & PREPARATION

  • Positioning & Approach:
    Crafting the client’s value proposition to appeal to potential investors.
  • Material Preparation:
    Developing high-quality pitch decks, offering memorandums, and marketing materials.
  • Operational Integration:
    Setting up tools like CRM systems for tracking investor outreach and engagement.
  • Sales Training:
    Training agents to effectively communicate the client’s offering and navigate investor conversations.

3. NETWORK RECRUITMENT & PLACEMENT

  • Sourcing & Screening:
    Recruiting skilled agents with expertise in investment sales and capital raising.
  • Network Building:
    Structuring scalable teams, including Master Agents and sub-agents, to drive growth.
  • Contractual Placement:
    Aligning agents with the client’s business to operate as an extension of their team.

4. EXECUTION & ENGAGEMENT

  • Investor Outreach:
    Agents actively solicit accredited investors on behalf of the client under Rule 506(c).
  • Pipeline Management:
    Monitoring investor leads and coordinating agent efforts for maximum efficiency.
  • Feedback Loops:
    Regular client-agent reviews to refine strategies and address challenges.

5. SALES MANAGEMENT & OPTIMIZATION

  • Dynamic Adjustment:
    Adapting strategies based on market feedback and investor responses.
  • Roadshow Coordination:
    Supporting agents in organizing meetings, calls, and events to present opportunities.
  • Network Scaling:
    Expanding the agent base to increase reach and fundraising capacity.

Fees, Costs, Conflicts, and Standards of Conduct

What fees will you pay?

Our earnings are performance-based and derived from the recruitment, placement, and optional management of Consultants. Specific terms are outlined in individual agreements based on the scope of services provided.

Conflicts of Interest

Distro Capital is compensated for placing Consultants, creating a potential conflict of interest as we may prioritize placements that align with our business model. We address this by ensuring transparency in the recruitment and placement process.

How do we address conflicts?

We focus on aligning Consultant qualifications with client needs and ensure that all parties comply with applicable laws and regulations.

Legal Obligations

What are your legal obligations as a client?

Clients are responsible for ensuring that their operations, including any solicitation or investment activities conducted by Consultants, comply with applicable laws, such as Regulation D, Rule 506(c).

What are our legal obligations to you?

As a business service provider, Distro Capital facilitates the recruitment and placement of Consultants. We do not provide investment advice or sell securities.

Additional Information

How can you learn more?

For additional information about our services, please contact us:

  • Email: info@distrocapital.com
  • Phone: 855.245.1003
  • Website: https://distrocapital.com

Conversation Starter

  • Who is my primary contact person?
  • How are Consultants selected and vetted?
  • How do you ensure compliance with general solicitation rules?

Disclaimer

Distro Capital is not a broker-dealer, investment adviser, or any other registered entity under federal or state securities laws. We do not sell securities or provide investment advice. Clients are solely responsible for compliance with applicable securities laws and regulations.

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