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Called Sponsor Direct, it lets real estate sponsors raise capital on their own sites
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Crowdfunding marketplace solution CrowdStreet has found a way to open up one of the most closed off marketplaces, the commercial real estate marketplace, by bringing together accredited investors and real estate developers online.
Now it has found a way to expand its reach even further: the company announced on Tuesday that is has unveiled a new product platform, one that enables commercial real estate sponsors to raise capital on their own sites, rather than having to list on the CrowdStreet platform alone.
The new platform, called Sponsor Direct, lets enterprise-level real estate sponsors to deliver a fully branded experience accessible from their own website. This enables their investors to view offer information, complete offer transactions, receive post-funding updates and track investment performance.
The idea for this new service came from the real estate developers themselves, Tore Steen, CEO of CrowdStreet, told me in an interview.
"This was born out of having been in the marketplace for over a year now, and working with high quality sponsors and commercial real estate companies. They were excited about bringing investment opportunities to the marketplace. This was the first time they could go direct to the individual investor, in an efficient and scalable manner," he said.
"They used to have to do it in offline way, meet in one-on-one environment. Here they can go one to many, and t allows them to do that in an efficient way."
And now that their eyes are opened to the opportunity, and what tech solutions can enable, they want to enable their own sites to get investors into their projects.
"I liken it to, having been in the software space, back in the days when Amazon created a marketplace and proved to world that you could buy and sell something online. Large retailers, over time, also recognized that they have to have own website with their own capabilities," said Steen. "These are quality sponsors, and there is great power to posting on the marketplace, and they want to also post themselves. We learned a lot from investors and sponsors to fine tune the platform and create a private label version."
The portal leverages the same technology infrastructure that powers the CrowdStreet Marketplace, the company’s flagship product. It also has easy implementation, which the company purposely made as simple as possible.
Real estate sites usually have a page called "properties," with pictures, and description deals they completed. With Sponsor Direct, they can include a link to open investment opportunities. CrowdStreet hosts those pages and even helps them with the placement of the button.
With CrowdStreet Sponsor Direct, sponsors can market investment offerings directly to the public or their private network, track investor engagement, and manage ongoing investor relations using tools that allow for scalable communications, investment performance monitoring and document archival.
Features include a posting platform for posting content, images, videos and documents; a transaction center for managing the transactional workflow of investors; an investor room where investors can review signed closing documents, receive investment updates, obtain distribution notices and track investment performance; and a management portal and dashboard, used by real estate sponsors to manage postings, leads, investors, closings, project updates and performance metrics.
"From day one, wen we got started, what we were passionate about was the core opportunity to to bring the third largest asset class, right behind stocks and bonds, to individual investors," said Steen.
"We are helping to propagate that opportunity further beyond our own marketplace, bring more consumers in market . We know that not all consumers are going to end up on CrowdStreet, and investors might have affinity, or direct correlation, to that sponsor. In addition sponsors have network of investor, between 50 and 150 individual high net worth investors, where they have created relationships, and participated in projects."
Founded in 2013, CrowdStreet has participated in over $40 million in capital formation since April 2014. It currently has 8 listings on the site, and thousands of investors on its platform.
The company has raised $1.5 million in venture funding, from investors hat include Green Visor Capital, Seven Peaks Ventures and Portland Seed Fund.
CrowdStreet will be one of the participating companies at Vator's startup competition during Splash Oakland on Thursday.
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CrowdStreet provides real estate operators, funds and private equity companies a full-service marketplace solution for presenting investments online, marketing opportunities publicly, managing the offer process and maintaining ongoing investor relationships. The CrowdStreet solution is enriched by services and business partnerships that empower real estate sponsors to modernize their fundraising processes and embrace online capital formation. Accredited investors, institutional investors and family offices access an intuitively-designed platform to find institutional-quality real estate investments, complete an online offer workflow, track investment performance and build a commercial real estate portfolio. Based in Portland, Oregon, CrowdStreet was founded in 2013 by a team with deep experience in commercial real estate, securities and finance, marketing, consumer Internet and software development.