Is Crowdfunding a Viable Equity Source for Development?

Jonathan Genton

Crowdfunding platforms have soared into popularity in recent years as an alternative capital source—both for debt and equity. Crowdfunding platforms have been used largely for real estate investment of existing assets, but developers may be opening up to using crowdfunding as an equity source for ground-up development. Jonathan Genton of Genton Property Group has used crowdfunding platforms on ground-up construction, but says that the uncertainty of funding has been a challenge. Still, other developers are becoming more interested in crowdfunding as part of the construction capital stack.

“Crowdfunding is something that people are thinking about and it gets a lot of interest. For developers to access capital, I think that it is growing and it could be a sea change in how we do business. The way that we have done business for years is pretty durable,” Genton, founder and CEO of Genton Property Group, tells GlobeSt.com. “You have a broker network and a bank network. A lot of those people have a lot invested and a lot of focus on business development and accessing developers to solve their equity and or debt needs. It works really well, so when I looked at crowdfunding from that perspective, it was interesting. It is a tool that is powerful and interesting. I think that it will become more prevalent has times moves on.”