How Does Crowdfunding Affect You

NEW YORK CITY-When I learned I had to write a series of articles on “real estate crowdfunding” for Globest.com, I called my business partner to brainstorm ideas. We approached this the same way we approach our company’s blog content. Then we came to realize something that most people in a small and emerging space have difficulty coping with: we are in an irrelevant niche and the world has managed without us ever since real estate finance was invented (roughly when mortgages first appeared). A basic Google Adwords query tells the whole story: 720 Google users searched for “real estate crowdfunding” last month. That, Dear Watson, puts us deep into the realms of “niche.”

So, we decided I should start from the beginning. What the heck is real estate crowdfunding? You may have heard of crowdfunding. It is the collection of funds, typically through the Internet, from multiple parties in order to finance a particular project or venture. There are two flavors of crowdfunding: donation crowdfunding and investment crowdfunding. The former seeks to fund charitable, artistic, or other worthy projects in exchange for personal satisfaction or non-financial rewards. The latter… yeah, you guessed it: it is just another form of online investing. While there are many worthy causes out there, we will only focus on investment crowdfunding, which is my field of expertise and an increasingly relevant subject for Globest.com readers (and I will explain why on later articles).