An Overview of Real Estate & Equity Crowdfunding Platforms
Author：Ivan Kan，Co－founder of Crowdcreate
Translator：Ran & Kiki，8 Decimal
Original by Bawei Research Institute, please indicate the source for reprinting
Original by Bawei Research Institute, please indicate the source for reprinting
As of December 31, 2018, the total number of online lending platforms in my country has reached 6,591, of which 1,609 are operating platforms. In December, the transaction volume of the online loan industry was as high as 139.577 billion yuan, and the loan balance was 1.104529 billion yuan. In the United States, a number of leading platforms have also emerged in the real estate and equity online crowdfunding industries. Let us find out through this article:
Part1 Real Estate Crowdfunding Platform
As we all know, "capital" is still one of the biggest barriers to entering the real estate industry, because there may be a lack of assets that can be used as collateral for loans, and it is difficult for real estate companies to obtain the support of venture capital funds like ordinary start-ups. Fortunately, real estate crowdfunding platforms offer more opportunities for real estate investing.
According to Forbes, real estate crowdfunding remains a dynamic and growing industry, with a market size of $3.5 billion in 2016. The entire crowdfunding industry is expected to be worth more than $300 billion by 2025, and the online real estate segment is also poised for explosive growth.
So let's take a look at how crowdfunding works:
What is crowdfunding?
Crowdfunding is a way of financing new ventures with a small amount of capital from a large number of individuals. This is often achieved through social media and crowdfunding sites, bringing together the project side and the funding side.
Advantages of crowdfunding
1) Provide a platform for user acquisition, retention, conversion and promotion
A solid and transparent crowdfunding platform symbolizes an endorsement of social credibility and a kind of "social recognition". When a potential customer shows interest in a business' product or service, you have created a "social proof" - showing others that you have confidence in what you do. When early adopters understand and approve of your idea, others may gradually accept this new idea and new model. "Social proof" will gradually become the foundation of your business - whether it is more sponsorship, more orders or more media attention - this "social proof" will be invaluable when you raise capital in the future prove.
Your early adopters and potential brand fans are the ones who provide you with "social proof". They believe in your story, project or service enough to bet real money on the long-term future of your product. These early users are critical to crowdfunding, and they will pass on your business idea to the people around them even after the crowdfunding is over.
2) Double media exposure and marketing
Fundrise
Public relations (PR) can give you a more objective and comprehensive understanding of your own efforts, and it also provides a channel for others to follow the progress of your project. The platform for PR can be a popular blog, news site or print, and it's a way to gain supporters outside of your own network. A standout Twitter post or blog post can have a powerful snowball effect, exposing you to major investors you wouldn't normally have access to.
Founded in 2010, Fundrise Foundation is one of the pioneers in online real estate crowdfunding. The platform allows users and investors to invest in real estate products with as little as a few hundred dollars (from $500).
FundRise also launched the Electronic Real Estate Investment Trust, or eREIT, in 2015, enabling most investors to invest in commercial real estate online, just like investing in ETFs or mutual funds. According to the website, the historical annualized rate of return is 8.7 – 12.4%.
Realty Mogul
When you sign up for the platform, you will invest in one of the three core portfolio plans (Supplemental Income, Balanced Investing, Longterm Growth) or in the minimum Starter Portfolio (Starter Portfolio). Regardless of the product chosen, your money will be invested in a variety of eFUNDs and eREITs with portfolios consisting of private properties located across the United States. Income can be obtained in two ways: (1) quarterly dividend distributions or (2) asset value appreciation at the end of the asset investment period.
Realty Mogul is an online real estate capital markets platform founded by Jilliene Helman and Justin Hughes. Since 2013, it is their goal to create this platform to change the traditional real estate financing model through online crowdfunding.
The Realty Mogul platform has more than 130,000 sponsors, project parties and investors, and is composed of a group of experienced experts in finance, real estate and technology. It has financed more than 350 properties with more than $280 million in prepayments totaling.
CrowdStreet
Realty Mogul has launched a MogulREIT to compete with Fundrise's eREIT. The advantages of Mogulreit are: (1) no qualified investor certification is required; (2) a lower investment threshold for investing in a single real estate; (3) usually lower requirements than private equity investors.
CrowdStreet is one of the largest and most diverse selections in the industry, specializing in commercial real estate (CRE) investing. One of the benefits of working with CrowdStreet is that it enables investors to work with a mediator, rather than putting themselves at the center of coordinating various communications.
Patch Of Land
CrowdStreet obtains project sources from brokers and then publishes this information on the website. Note that customers will still be charged for external support, which varies by project.
Patch of Land is a quasi-real estate loan marketplace that matches qualified institutional investors seeking high-yield, short-term, asset-backed investments with borrowers seeking more timely and sustainable sources of funding.
Their goal is to solve the problem of inefficient, fragmented and opaque real estate private lending by using technology and data-driven processes to efficiently underwrite real estate projects for borrowers that are often overlooked by traditional lenders.
RealCrowd
According to InvestorJunkie's review of Patch Of Land, Patch of Land's lending platform can help them reduce costs and increase the efficiency of getting these deals approved and financed. If you want to invest in short-term bonds with good returns, then POL might be right for you.
Fund That Flip
Like CrowdStreet, the market is also eyeing commercial real estate (CRE, Commercial Real Estate) assets. It offers equity and debt transactions, as well as single property investments and multiple property assets. They make money by charging sponsors, so they don't charge customers extra. They're also one of the few sites in the industry that has seen a significant increase in sales since last year.
Fund That Flip invests in residential debt, and some household and business debt. Compared with other platforms, they have the lowest LTV (Loan to Value) (the higher the value, the greater the risk).
Fund That Flip starts by distributing cash on credit to borrowers, and then sells that debt in tranches to investors -- investors' funds who share in the profits (or losses). Typically, a borrower buys a home to renovate it with the intention of selling it at a higher price. Fund That Flip's funds have low default rates and simple transaction structures.
Part2 Best Equity Crowdfunding Platform
What is equity crowdfunding?
StartEngine
Equity-based crowdfunding started later than reward-based crowdfunding, because crowdfunding was illegal in the United States three years ago, until the birth of the "JOBS Act - Fast Start Our Startups Act". The JOBS Act changed the government securities sector and legalized equity crowdfunding. Their rationale for legalizing equity crowdfunding is that it will help stimulate the economy by allowing new businesses to publicly raise startup funds through crowdfunding.
StartEngine is one of the largest venture crowdfunding platforms, it uses Reg CF (Crowdfunding) and Reg A+ to raise funds for startups. In some cases, the minimum investment is $100. StartEngine covers a wide range of projects, from apparel and electric vehicles to healthcare and other industries.
StartEngine has also started offering ICO, a fundraising model that leverages the emerging blockchain and cryptocurrency ecosystem. In addition to 1COS and startups, StartEngine is currently offering investors the opportunity to invest on StartEngine using RegA+.
Typically, investors receive common stock or convertible notes, but the exact type of security varies by investment. All offerings on crowdfunding platforms are direct investments, not through a special purpose vehicle such as a limited liability company (LLC).
SeedInvest
It is reported that StartEngine is currently applying for Reg A+ through Security Token Offering to raise $10 million for itself.
SeedInvest was founded in 2012 by Ryan Feit and James Han. They are a manifestation of the reform of the US securities law, which has included equity crowdfunding as a legal way to raise funds.
SeedInvest is the first crowdfunding platform that allows ordinary investors who do not qualify as accredited investors to invest in company equity on its platform. At the same time, Seedinvest also provides investment services for qualified investors.
Indiegogo
SeedInvest has low threshold for investors and strong adaptability. But for project parties that can carry out fundraising activities on their platforms, the requirements are more stringent. SeedInvest can only be used for corporate financing, a consumer-facing interface and technical services make up most of the platform's activities. SeedInvest conducts extensive due diligence on organizations applying to take advantage of its platform, and according to their own estimates, only 1% of startups are currently approved.
Indiegogo is a crowdfunding platform where individual promoters can raise funds for their creative projects as well as launch equity crowdfunding ventures for their businesses. When launching a fundraiser, they can choose between creative work, community projects, technology and innovation.
Indemand is a service offered by Indiegogo that you can sign up for after completing an initial reward campaign, whether your campaign is on Indiegogo or another site. With Indemand, you can continue fundraising without a fixed fundraising goal for a period of time after your initial campaign. If your initial campaign was run on Indiegogo, your fundraising page will be kept as background material for the project. Indiegogo also offers a service called Marketplace that allows projects to sell products online.
existexist"New York high-end apartments and real estate examples of St. Regis Aspen Resort｜8 Decimal View"
https://blockchain.indiegogo.com/projects/aspen/
MicroVentures
In the article, Aspen Digital is working hard to build a real estate ecology in the encrypted world, and Aspen Coin is endorsed by a high-end asset, and the value of Coin corresponds to the common equity of the real estate investment trust that owns the ownership of the St. Regis Aspen Resort. Aspen Coin is sold through the Indiegogo website.
Founded by Bill Clark in 2009 and headquartered in Austin, MicroVentures is an equity crowdfunding platform that provides accredited and non-accredited investors the opportunity to invest in early-stage equity projects. MicroVentures specializes in Regulation Crowdfunding, a term that refers to a form of equity crowdfunding that makes investing accessible to everyone, not just accredited investors.
Companies on this platform can also raise funds under the terms of Reg D 506, although these restrictions are limited to accredited investors. MicroVentures is one of the few equity crowdfunding sites registered with the Financial Industry Regulatory Authority (FINRA).
WeFunder
WeFunder provides an equity crowdfunding platform for US companies and LLCs, and as of November 2017, WeFunder has connected projects with nearly 150,000 registered investors. A business that needs to raise funds can set up a profile page on WeFunder, and when it starts fundraising, it must pay a fee of $195.
Summarize
Summarize
