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Will Pre-funded Deals Strategy cause a shift in Real Estate Crowdfunding?

Will Pre-funded Deals Strategy cause a shift in Real Estate Crowdfunding?

Real estate crowdfunding platforms are increasingly shifting towards pre-funded deals to increase their market share and deal flow. Pre-funded deals occur when a crowdfunding platform gives a real estate developer who needs capital right way a loan guarantee without having to first take the risk of raising the entire loan amount from online investors. According to the 2015 TRN Real Estate Crowdfunding Report, crowdfunding platforms are opting for this strategy to meet the needs of developers who need to raise capital quickly in order to close lucrative deals in a short amount of time. In such situations, pre-funded deals come in handy because raising funds online can take longer –  usually a few weeks or even months. While pre-funded deals enable real estate developers fast funding, it also benefits investors who get returns faster because deals with developers are closed prior to the commencement of the fundraising process online. Financing ... Read More »

Wall Street Diaspora Seek New Families

Wall Street Diaspora Seek New Families

There’s a growing trend on Wall Street that’s keeping everyone on edge: an exodus of talent. For better than a century, those with dreams of working in the world’s most massive, dynamic market have flocked to Wall Street. But in the last decade, the standard compensation package at most firms — 20 years of 100 hour weeks in exchange for increasingly large bonuses — has lost its appeal. For the last few years, Wall Street has watched helplessly as some of its finest people have packed up and left. All estimates say Wall Street is still running strong, but losing valuable human resources to other ventures greatly weakens its standing. So what gives? The recent recession hit some big businesses hard, including banks. Even now that we appear to have weathered the financial crisis, Wall Street is still struggling to rebound from the widespread criticism and negative public image the ... Read More »

Crowdfunding is bigger than the internet

Crowdfunding is bigger than the internet

Scott Purcell spurs FundAmerica into a Top crowdfunding Platform Scott Purcell is a serial entrepreneur experienced in securities, banking, technology, internet infrastructure, publishing, social networking and music industry. He is best known for founding Epoch Networks, one of the first internet providers in the United States as well as the brain behind a trust company that exceeded 1 billion dollars in assets. Scott is a top capital raiser who has raised more than 140 million dollars in angel and venture #investments. Today, he is the founder and chief executive officer at FundAmerica, a crowdfunding platform based in San Francisco. In addition, he serves in the Crowdfunding Intermediary Regulatory Association as a Board Member. FundAmerica Scott Purcell founded FundAmerica in 2011 with the aim to provide software, compliance management and technology systems to investment advisers, crowdfunding portals, broker dealers, and other entities that constitute online fundraising businesses compliant with Title I ... Read More »

Anatomy of a Real Estate Crowdfunding Transaction

Anatomy

Crowdfunding has now grown from a niche to a legitimate platform for funding projects of all kinds by raising money from the public at large. Nowhere has this been more pronounced than the real estate sector where there are now a number of crowdfunding platforms offering investors the chance to participate directly in real estate projects. Traditionally, the real estate market has been the exclusive preserve of wealthy and well-connected individuals with the exception of real estate investment trusts (REITs). Leading real estate crowdfunding platform Fundrise takes a slightly different approach from other platforms because it emphasises the social benefits that arise from investors having a say in the development of their own communities. It points out that local residents have a better appreciation of their community needs and should have a say in what happens there. Sometimes, the dominance of large investors can lead to a disconnect between fund ... Read More »

Syndicate Funding: A New Way To Invest In Startups

Syndicate Funding: A New Way To Invest In Startups

How does one become an angel investor? There is no university where one can learn angel investing. However, crowdfunding is creating a unique path for learning through a system called syndicate funding. A growing trend in the U.K. and other parts of Europe, such as Belgium and Italy, this system allows professional business angels and crowd investors to participate on the same deals. Syndicate Room (SR) and the Cambridge Capital Group (CCG) joined together third quarter of this year to leverage crowdfunding for the first time. CCG, an ultra-exclusive by-invitation business angel group of around 50 investors and private venture funds that annually invest £1-2 million each to its current portfolio of more than 30 high-tech start-up companies, became lead investors to Syndicate Room’s member investors. “Membership in Syndicate Room is free,” says its founder and CEO Goncalo de Vasconcelos. As an SR investor, the member can invest as little ... Read More »

Real Estate Crowdfunding: Post-Valuations Of $100M For Series A?

Real-Estate-Crowdfunding-1

Fundrise has raised $31 million from Renren, a Chinese technology firm, Ackman-Ziff (Real Estate Group) and Silverstein Properties (owners of the World Trade Center Twin Towers). My discussions with the founder Ben Miller, concerning the successes of this platform, have revealed that Fundrise is currently on a hiring growth stage. At $31 million raised, assuming that they give up 40% of the company, this puts them at a $77.5 million pre-money valuation and a $108.5 million post-money valuation – amazing statistics on valuations for the explosion of realty crowdfunding. The leader in the $31 million financing was Renren, a large Chinese social networking company; other participants included several firms and individuals in the real estate business including executives in Silverstein Properties, owner and developer of the World Trade Center, and Los Angeles developer Rising Realty Partners. The new capital allows Fundrise to undertake a national expansion while opening up the ... Read More »

Crowdfunding In Europe: The Top 10 ‘Peer-to-Peer’ Lenders

Crowdfunding-In-Europe

Crowdfunders generally fall into different categories: equity, donation, reward, and debt. The last is also known as microfinancing — and commonly referred to in Europe as “peer-to-peer lending.” Here are the top 10 up-and-coming peer-to-peer lenders e making financial waves in Europe: 1. Zopa This London-based P2P lender offers loans of up to £15,000, with individual borrowers dealing directly with lenders. Zopa categorizes borrowers based on their credit grades, so lenders can offer terms and amounts of money based on the category of the borrower. 2. Ratesetter Also London-based, Ratesetter was the first to introduce the concept of a “provision fund” into P2P lending. Borrowers pay a “credit rate” fee that is used to diversify risk by reimbursing lenders in the event of a late payment or payment default. 3. Funding Circle One of the biggest crowdfunding platforms in the U.K., Funding Circle has loaned £90 million to SMEs since ... Read More »

Top Power Women in US Crowdfunding

Top Power Women in US Crowdfunding

Did you know the top 10  women crowdfunding in the US?  They are in the fields of business, arts, philanthropy, law, film, as well in government and non-government organizations.  They are women that inspire us to excel in our chosen fields. If you’re interested in crowdfunding, then you would have heard of these ten most influential women in the US crowdfunding industry right now. These women are changing the world—and they know it. We are entering a new era for female entrepreneurs. Those who are creative and smart, who have a new way of looking at things, who can use their imaginations and then make their visions real, can change the way things work in this country and around the world. 1) Amanda Palmer Amanda Palmer, who used to be a member of The Dresden Dolls,  made a lot of noise when she decided not to bring her own musicians on ... Read More »

Institutional Real Estate Crowdfunding: Big Players Join the Crowd

big players join the crowd

It’s Time to Rethink Your Stance Current trends suggest that those who believe crowdfunding is a “minority capital” and that it excludes (to a large extent) the participation of high-profile investors should now reconsider. High-profile investors – institutions, angel investors, venture capitalists, and high net worth individuals – have begun co-investing alongside capital raised from “the crowd”. In the real estate industry, in particular, this new trend has various implications for all involved, but especially for startups, small-scale developers, and individual investors. A New Form of Crowdfunding: Institutional Crowdfunding Institutional crowdfunding is a new field in the crowdfunding sector. It involves big businesses or established organizations seeking funding for much larger projects from institutional and accredited investors via the internet. Instead of offering small projects to the crowd for funding, institutional crowdfunding offers bigger projects to target institutional investors or high net worth individuals. In 2009 we saw a glimpse ... Read More »

Debt Crowdfunders: The Best Of The Best

Debt Crowdfunders The Best Of The Best

Some of the leading crowdfunders fall into different categories like Equity, Donation, Reward and Debt (a.k.a. micro finance and peer-to-peer lending). That last group is critical.  Here is my take on top 10 up-and-coming crowdfunders for debt players. 1. Lending Club Lends up to $33,000 towards consumer debt and has scaled to the point that they were handling over $125 million per month in loans as of February.  They are on a trajectory to $1.5 billion in crowdfunding loans for this year.  They have also brought into their board former CEO of Morgan Stanley John Mack and former Treasury Secretary Larry Summers. 2. Kiva Using intermediaries from local and regional lending companies and organizations, Kiva offers crowdfunding in developing countries. Crowdfunders or lenders can pitch in $25 each and a local microfinance institution (MFI) facilitates the loan. Kiva is the first global lending platform and is currently the leader for ... Read More »

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