By Josef Holm, CrowdFundBeat Guest Editor
Joel G. Block is the managing director of a real estate hedge fund that acquires distressed assets nationwide, plus he has been a principal in over 40 syndicated transactions throughout his career. For much of the last 20 years, Joel was in the venture capital business – frequently on the entrepreneur side of the table.
Though he has conceptualized, capitalized, operated and sold several companies, his favorite was the development of a personalized financial product which he sold to a Fortune 500 company in 1995. In 2012, Joel formed a team to launch the Bullseye Capital Real Property Opportunity Fund, LLC, a real estate hedge fund that acquires distressed multi-family and commercial assets nationwide, adding value that is shared with investors. Joel is also a professional speaker and has delivered many lectures at university business schools, not to mention having produced and delivered hundreds of hours of paid programming to entrepreneurs all over the United States and beyond.
Q: How did you get into crowdfunding and what was it that attracted you to this industry?
I’ve been in the capital raising business for 25 years and one can no longer talk about raising capital without minimally discussing CrowdFunding. For that reason, I have been watching the development of the CrowdFunding industry since 2011. Further, I teach others about techniques related to raising capital and for that reason, I’d have to be on top of the developments in CrowdFunding. I’m attracted to this because CrowdFunding is a brilliant technique for attracting referrals and new leads into one’s investor pipeline.
Q: What’s the most common question people ask you about your job and how do you respond?
Most commonly people want to know how I got into my job as a fund manager and how other people can get into it as well. Raising capital is an art form, but it’s an art form that can be learned. Most critically though, one has to be able to answer several questions, mostly simple questions that investors ask. For example, if I give you my check “what do I get”? If you can’t answer that tiny question in a way that a client or prospective investor can take to their attorney or accountant, you will never get them to write you a check. You also have to understand exactly what you get in terms of compensation from the deals that you put together.
Q: Did you have a mentor or is there someone who inspires you as a leader? How did/do they impact on your career and life?
At the present time, I don’t have a mentor; however I have a strong network of peers and colleagues that help me. Our network is open between peers and we rely on each other for assistance. In fact, our group meets every six months and we discuss issues of common interest. The full day meeting that we have every twice annually is robust and there is never enough time for everyone to get all of the issues addressed that we want to put on the table.
Q: What is the biggest challenge facing crowdfunding as an industry today and what solutions would you suggest?
CrowdFunding is new, and like anything that’s new, it’s moving fast and changing rapidly. Several players who jumped in early are already going out of business because they were undercapitalized and simply do not have the resources to continue moving forward. Our approach has been to go a little slower, watch the market and make careful, calculated and accurate decisions so we don’t suffer the same fate.
Q: What advice would you give someone trying to get into crowdfunding right now?
First, understand the underlying business of raising capital. CrowdFunding is not a new business or a new industry. CrowdFunding is a technique for attracting prospective investors to your deal. You still have to be able to put a deal on the table that investors can say yes to and you have to put a deal on the table that you’re willing to say yes to. If you don’t understand the underlying business, the Securities and Exchange Commission rules and so forth, you will not succeed regardless of whether you receive the capital you want from your CrowdFunding campaign.
Q: What resources and events (blogs, books, conferences, podcasts, videos, etc) would you recommend to someone looking to become a crowdfunding expert and why?
There are several CrowdFunding conferences happening in every city around the country. A year or two ago there were only one or two big ones, but now there are dozens every month in nearly every city. But the CrowdFunding conferences do not go into the underlying process of raising capital and what the legalities are of being in the capital of raising business. Don’t overlook the importance of that part of the job.
Q: What are you doing to make sure you continue to grow and develop as an industry leader?
I attend conferences regularly; I speak at these conferences and create friendships and relationships with others who are speaking as do I. The thought leaders in these industries regularly work together and speak together, talking about strategies and issues that we notice and can impact.
Q: Can you tell us a little bit about how social networking and Web 2.0 have affected your organization or you personally?
I noticed early on that social networking would be critically important and therefore built a very substantial LinkedIn following, Twitter following, Facebook following, et cetera and now with the advent of CrowdFunding, those followings and the giant fanbase that I have is one of the greatest assets in my life. Everyone must build a fan base that can be identified and clearly pointed out using the social media tools at our disposal.
Q: What do you think the crowdfunding space will look like five years from now?
The CrowdFunding space will cease to exist in five years and instead will just meld into the normal way that we all raise capital. Electronic portals for getting investors to sign documents and facilitate their transactions will be the norm; identifying investors using portals and other tools will be the norm; and prospecting electronically will be the norm. What we consider now as CrowdFunding will simply just become part of the capital raising business and the word CrowdFunding will probably disappear altogether.
Q: What ultimate goal are you working towards?
I advocate for entrepreneurs and it’s my goal for every entrepreneur who wants to learn how to raise money to be able to do so. CrowdFunding is not the answer; the answer is understanding the way that the fund raising business works and understanding how deals get put together – as well as once you get the capital, you’ve got to make sure that you make money for the investors. Most people put much too little emphasis on the expertise required to be successful and much more emphasis on getting the money – especially by using the CrowdFunding technique. Put your emphasis on the deal and your own expertise and the money may follow. But without that expertise, no money will come your way. Remember, access to capital is not a constitutional right in the United States and most entrepreneurs will never get any. My goal is to get entrepreneurs to understand these concepts so they can ultimately be successful.