CRE Benefits From Crowdfunding, by Crowdnetic

File Type: Free Content, Article
Release Date: April 2014
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Since the U.S. Securities and Exchange Commission (SEC) lifted its decades-long ban on general solicitation last September, fundamentally changing the way companies are allowed to raise money, the real estate development industry has benefited more than any other, raising almost $17.5 million from investors through crowdfunding efforts, according to a new report by Crowdnetic, a New York City-based firm that gathers data on the crowdfunding industry.

Its “Quarterly PIPR (‘Private Issuers Publicly Raising’) Data Analysis” for the period ending March 31, 2014, includes data from almost 3,600 PIPR companies, more than 2,800 of which currently are actively seeking funding. 

The rule change, enacted as part of the Jumpstart Our Business Startups (JOBS) Act, made it legal for entrepreneurs to publicly advertise their efforts to raise money, and for “non-accredited” investors (individuals or couples earning up to $100,000 or $300,000 a year, respectively) to pool their financial resources with up to 500 other individuals in a “crowdsourcing” investment fund.

Crowdnetic notes that while entrepreneurs are benefitting from the new regulation across the board, the top three industries by recorded capital commitments are real estate development ($17.43 million), e-commerce ($6.47 million) and “real estate investments-other” ($5.08 million).