Over the past year we have seen real estate crowdfunding unfold into its own animal at an unprecedented rate. With the SEC Regulation lifting the General Solicitation Ban, private companies can now publicly advertise their investment offerings. Additionally, open fundraising is the catalyst for this past year’s whirlwind of changes. Not only should all companies understand how this affects their business and their competitors, but investors should understand the importance in the development of the Title II of the JOBs Act when vetting investments.
What has been known over the past 80 years as illegal by the SEC under Rule 506 of Regulation D and Rule 144A of the Securities Act of 1933, is now amended. Under the amendment, companies will be allowed to fundraise investment offerings to a larger audience of people who may or may not be Accredited Investors.
General solicitation has created impactful progress for investors. By increasing transparency to review detailed offering terms, this allows for investors to compare other offerings to make informed decisions that were otherwise difficult to do in the past. This has been vital for startups and investors that had little to no access to these investments prior to use of general solicitation. So much so, that on a global scale, the real estate crowdfunding industry should grow roughly “1.8 times the size of the global venture capital industry today by 2025,” stated at the UCLA Ziman Center for Real Estate on August 27th, 2014.
Under Rule 506 of Regulation D, there are two distinct exemptions that take place when raising funds:
|506 b||506 c|
In addition to the above rules, Regulation Crowdfunding through Title III of the JOBs Act is still under review two years later. Even more so, it likely won’t be adopted anytime soon. Regulation Crowdfunding covers how much an issuer can raise and how much unaccredited investors can put into deals.
Until approval of Title III, we can only speculate how this will influence real estate crowdfunding on a global scale. We are sure that it will be, increasingly, substantial. Especially since we continue to uncover even the recent amendments to the JOBs Act.
Since our last update, we’ve been busy focusing on making the ultimate user experience for our investors. Taking your feedback and optimizing our processes to develop a portal that delivers a seamless investing experience and provides the information YOU need, right on your dashboard. Not to mention, we’ve been steadily building out our team here…
Over the last few months here at DiversyFund we’ve been working hard to bring the best user experience to our investors. It’s been a long road, but we’ve given our website a facelift and optimized our customer journey! As the Director of Product Development I made it a point to make this my focus –…
In 2017, DiversyFund had many successes and achievements. We surpassed $100 million in completed value in commercial and residential real estate developments. Additionally, the public and media continue to recognize our unique approach to alternative investing. For example, our CEO & Founder, Craig Cecilio, was featured on the New York Stock Exchange’s Cheddar TV, Bloomberg…