• Subscribe
  • Contact Us
  • About LendIt Fintech News
  • Home
  • Menu Item
  • Menu Item
  • Menu Item
  • Menu Item

Lend Academy

LendIt Fintech News: Daily Coverage of Fintech & Online Lending


  • Editorial
  • Daily News
  • Podcast
  • Investor Forum
  • Events

RealtyMogul.com Launches Real Estate Crowdfunding REIT

The RealtyMogul.com REIT is the latest in the growing number of opportunities for retail investors.

August 16, 2016 By Ryan Lichtenwald 5 Comments

Views: 1,037

RealtyMogul-Logo

Today, RealtyMogul.com announced its first REIT officially known as MogulREIT I. This deal is similar to deals we’ve seen in the past that are leveraging Regulation A+ in Title IV of the JOBS Act. They will be able to raise a total of $50 million for the new fund. What is especially interesting about these types of deals is that they allow access to non-accredited investors. We spoke to Jilliene Helman, CEO of RealtyMogul to learn more about the new REIT.

The benefit of a fund versus investing in individual deals is that investors are automatically diversified in a number of different projects. This significantly lowers the barrier to entry for smaller investors. The minimum investment in the fund is $2,500 with no maximum. They aren’t focusing on opening up the fund to retirement accounts yet due to compliance reasons.

Jilliene shared with us that they have a large base of non-accredited investors that they hope to tap into with the new offering.  They currently have over 80,000 investors on the platform, but only 30,000 are accredited investors. The remaining 50,000 investors have been prohibited from investing with RealtyMogul until now.

The fund is focused on income producing commercial real estate which means it will be invested in multifamily units, retail, self-storage and office buildings. With a deal like this one of the concerns is the ability to deploy capital quickly. If they were to raise the maximum amount of $50 million there is the potential of cash drag as they source new deals. To alleviate this, RealtyMogul.com has taken a unique approach, enlisting a sub advisor on the fund who can invest in publicly traded real estate related securities. This also provides some liquidity although Jilliene mentioned that investors should have a long-term investment horizon, ideally of at least 3 years. [Read more…]

Filed Under: Peer to Peer Lending Tagged With: Real Estate Crowdfunding, RealtyMogul, Regulation A+

Views: 1,037

StreetShares Announces SEC Approval for Regulation A+ Deal

Retail investors will soon have access to a new vertical in marketplace lending: Small Business Loans

March 15, 2016 By Ryan Lichtenwald 6 Comments

Views: 1,042

StreetSharesLogo

StreetShares, who recently closed a Series A round today announced that they have received SEC approval to offer a product to non-accredited investors through what is known as Regulation A+. The company currently operates a marketplace for small business loans, but is looking to expand their offering. This is the same route other companies have gone, namely Fundrise and GROUNDFLOOR, but StreetShares is the first small business lender to do so. StreetShares launched in 2014 with a focus on veterans funding loans to fellow veterans. We spoke to Mark Rockefeller, CEO and Co-Founder and Mickey Konson, COO and Co-Founder to learn more about why they chose to go this route.

Regulation A+ is part of Title IV of the JOBS Act which officially took effect on June 19, 2015. It increased the maximum raise from $5 million to $50 million and also provided an exemption from state blue sky laws. Mark Rockefeller and his team were waiting for this to happen and just a few days later, on June 23, 2015 StreetShares filed to begin the process of creating their new product. Since then they have been working closely with the SEC through several iterations to get the deal approved. Regulation A+ allows companies to raise up to $50 million in a 12 month period and Mark noted that StreetShares was the perfect size for the deal to make sense.

Since StreetShares had already raised a seed round they were able to withstand the process of getting approved which is resource intensive and includes audited financials. They also weren’t so large that raising $50 million in 12 months wouldn’t move the needle. Mark and Mickey said that going the Regulation A+ route is perfect for startups with traction and the timing worked well for them. This Regulation A+ process is much less resource intensive than the approach that Lending Club and Prosper took where they filed a S-1 and are required to file every loan as an individual security.

 The New StreetShares Regulation A+ Product

While some details remain to be seen we have an idea of how the product will function. Sign up is currently available at StreetShares.com, but the full technology launch will occur next month. Securities will be offered first to active duty military veterans and their families. Both Mark and Mickey are former military men and they believe strongly is serving this community. But they will offer this new investment product to all non-accredited investors in the near future.

While they wouldn’t share too many details about their new product they did say it was going to be a new approach that would make it simple for investors. Here is what they shared in their press release this morning.

The crowdlending product, created through Regulation A+ of the Jumpstart Our Business Startups (JOBS) Act, offers a fixed return to investors, a first for this type of investment. StreetShares uses the proceeds to generate loans to qualified small businesses. Unlike current “peer-to-peer” lending sites, repayment to investors is not tied to the performance of a particular underlying loan. StreetShares is the first company to apply this law to the $100 billion small business loan market. Until now, only wealthy “accredited investors” could invest in these popular securities.

The key point here is that investor returns are “not tied to the performance of a particular underlying loan”. StreetShares will provide a vehicle for investors to become diversified through some kind of fund. Details will be revealed when they launch in a few weeks.

An important piece to the StreetShares platform is the community and the affinity approach. They believe that opening up this product will help continue to drive more borrowers to them as investors spread the news of a StreetShares small business loan. With their focus on veterans they have learned that there is a benefit to receiving funding from people in the same social group. It touches on the ability to pay versus the willingness to pay where borrowers don’t want to let their investors down. Mark noted it is this positive peer pressure that de-risks the loans offered by StreetShares.

We were told by Mark and Mickey that they plan to officially announce the product at LendIt USA 2016 in San Francisco next month.

Conclusion

It seems as though Regulation A+ deals are becoming the new trend for marketplace lenders to access non-accredited investors. Retail investors are increasingly able to invest across verticals of the industry. It will interesting to see how these types of deals develop especially as companies like StreetShares continue to grow originations. Perhaps we will see Regulation A+ expanded to higher maximums if it continues to be successful.

Filed Under: Peer to Peer Lending Tagged With: Regulation A+, small business loans, StreetShares, veterans

Views: 1,042

Investor Intelligence

Peter Renton's Returns

Investor Forum

Lending Club Review

Prosper Review

Investor Resources

Most Popular Editorials

The Pure Marketplace Lending Model is Dead, the Hybrid Takes its Place

The 2018 Lending Club and Prosper Tax Guide

My Returns at Lending Club and Prosper

Map of Available States for Lending Club and Prosper Investors

Banks and Marketplace Lending Platforms: Ideal Partners?

Subscribe to the Podcast

Subscribe to the Lend Academy Podcast on iTunes
Subscribe to the Lend Academy Podcast
List of Podcast Episodes

Archives

Follow @LendAcademy Follow @LendIt

ABOUT LENDIT FINTECH NEWS

LendIt Fintech News, Powered by Lend Academy, has been bringing you all the news and information about fintech and online lending since 2010 when it was founded by Peter Renton. We not only have the industry’s most active news site, but also the largest investor forum and the first and most popular podcast.

We are a team of fintech enthusiasts who have been covering the industry for many years. With a deep knowledge of online lending, digital banking, blockchain, artificial intelligence and more our team covers the daily news and writes in-depth editorials.

Recent Editorials

  • LendIt Fintech USA is Just Two Weeks Away
  • Top 10 Fintech News Stories for the Week Ending April 10, 2021
  • Podcast 293: Atif Siddiqi of Branch
  • Caring Consumer Collections Policies Gain Traction
  • Top 10 Fintech News Stories for the Week Ending April 3, 2021

Copyright © 2021 · Metro Pro Theme on Genesis Framework · WordPress · Log in