Real Estate Crowdfunding: Overview

By Vendula Macháčková, CrowdFunding Beat Guest Contributor,

The Real Estate crowdfunding industry (alternatively referred to as Property Crowdfunding) is moving quickly as awareness increases around the globe and favorable legislation is proposed and pushed forward. We put together a high level overview of recent activity including our thoughts, insights, and opinions and we encourage groups to reach out that would like to learn how we can assist them with their own initiatives.


 Industry Direction – like any sector that heats up, there is an abundance of misinformation, hype, and a sense of urgency in many cases. While early movers like (raised a $31 million Series A, lead by Renren, right around the time we spoke initially) and (raised a $9 million Series A, lead by Canaan Partners at the end of March) are disrupting the market and creating awareness for an efficient online offering/transaction model. They are ultimately what we call intermediary platforms, bringing investors and third party issuers together and there are many shortcomings in terms of the quality of the deals they have access to (it depends how many firms are willing to post deals and give a commission to the platform and then how many of those deals are good quality). That being said, these companies are doing a great job to help pioneer an emerging industry and while their exposure may be more impressive to some than the actual dollars transacted, they are young companies and that will likely change.

More established firms with existing investor networks and access to high quality investment offerings are entering the space or exploring how to enter. The common goal is to grow their institutional and accredited investor networks by leveraging the online model, and create efficiencies in their business via process automation (when possible). There won’t be one big winner in “Real Estate Crowdfunding”, the industry will remain fragmented but the ability for solicitation is game-changer for firms with strong track records.

US Regulation – a lot of people refer to crowdfunding only in the context of non-accredited investors but in our opinion any syndication is technically crowdfunding. For the non-accredited investors to benefit from the new legislation, accredited investors need to adopt the model. Angel List ( is a great example because many high profile and savvy tech investors actively use the platform. If they allow non-accredited investors in the future that would be great.

Title II – Rule 506 (b) and Rule 506 (c) are the compliance of interest to US groups. Rule 506 (c) allows for solicitation so if your legal team is OK with it, its great.

Title III – the compliance of interest to everyone with even a slight consideration to allow non-accredited investors. Many groups aren’t interested in $300 investments but many that don’t qualify for accredited status still have money i.e., $50,000 commitments. Depending on your deal sizes this may or may not be an interesting option.

Financial Transactions – all companies are different, the offerings are structured different, and how they monetize their investment opportunities are different. There is a lot of confusion whether groups need to be a broker-dealer to operate a platform and take transaction fees. Approaching your platform concept with the assistance of a securities lawyer can help determine the best methods to handle the financial transactions from the platform. Many groups are doing debt deals and not equity participation.

Depending on the structure of a deal and the company’s status with the SEC (for US based) there are different payment services available for very low transaction fees. Whether you require escrow or not presents other considerations.

International – international awareness and demand is growing. Many groups are looking at international growth by accessing investors looking for US assets. Platforms like in the Middle East are fairly well known and provide a good reference point to investors from those areas. Depending on your investor profiles (and compliance) the international aspect may or may not be of interest but it opens the possibilities.

The industry is dynamic, exciting, and disrupting an industry with more efficient processes, powerful investor tools, and the ability to leverage online exposure.

As a software provider for real estate crowdfunding platforms, we are fully entrenched in this space and hopefully we can educate others and contribute to the growth and success of many companies.

Stay tuned for more updates in the coming months!

Tags: , , ,


This RSS feed URL is deprecated, please update. New URLs can be found in the footers at [...]

NPRAfter Outcry, Crowdfunding Site Patreon Backs Off Plan To Raise ...NPRThe popular crowdfunding service Patreon has backed off plans to change its payment structure, after widespread, vocal and passionate opposition from creators and their fans. Last week, the site announced it woul [...]

ForbesCrowdfunding Do's And Dont's From iFundWomen's Karen CahnForbesDuring our conversation, she was transparent in sharing that her first software company, VProud, failed because she “did everything backwards” and spent too much time trying to perfect the product. “Pe [...]

TechCrunchHow hate speech crowdfunding outfit Hatreon crept back online ...TechCrunchIf you want to make a living creating white supremacist content, you're probably not going to do it via sites like Kickstarter and Patreon, which prohibit hate speech. Fortunately there's Ha [...]

Aberdeen Evening ExpressFierce Beer smash crowdfunding target in bid to open first bar in AberdeenAberdeen Evening ExpressAn Aberdeen brewery has hailed the “incredible” response to a crowdfunding campaign after it smashed the original £60,000 target in just 24 hours. The Evening Expr [...]

EntrepreneurWhy Some Small Business Owners Are Turning to Crowdfunding to Save Their CompanyEntrepreneurMany owners of beloved local businesses, especially in pricier cities, have been forced to swallow their pride and appeal to their customers in times of crisis -- a process streamli [...]

Japan TodayZoo starts crowdfunding campaign to protect endangered birdJapan TodayA Toyama zoo has launched a crowdfunding campaign to collect funds to protect an endangered Japanese bird designated as one the nation's special natural treasures. To supplement funding from the stat [...]

Crowdfunding For French CastlesNPRYou too can own a French chateau, in part, anyway. Romain Delaume, CEO of Dartagnans, tells NPR's Scott Simon about a crowdfunding effort underway to preserve La Mothe-Chandeniers. SCOTT SIMON, HOST: What if I told you that for about $60, you cou [...]

Born2InvestHere are the latest updates on the crowdfunding industryBorn2InvestWhen pressed for the reason behind the move, the company pointed to their charter which states that Kickstarter is committed to the arts and creative projects. Another provision in the charter shows that the [...]

TechCrunchFormer Gawker employees are crowdfunding an effort to buy Gawker.comTechCrunchWhile Univision acquired most of Gawker Media's sites last year (and renamed them as the Gizmodo Media Group), the deal didn't include Gawker itself. In fact, BuzzFeed reported last month [...]

CFB Finance


  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |