LOS ANGELES—Goodwin Procter, acommercial real estate law firm, has launched acrowdfunding practice to handle the legal issuesassociated with the relatively new platform. LewFeldman, a partner in the firm's real estate capitalmarkets group, will lead the new practice. To learn more about thefirm's crowdfunding practice and the legal risks involved with theemerging crowdfunding industry, we sat down with Feldman. Here, heshares his legal take on the new industry.

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GlobeSt.com: What prompted Goodwin Procter to launcha crowdfunding practice?

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Lew Feldman: Goodwin Procter hasactually been addressing the needs of a growing number of ourclients participating in online debt and equity raises for realestate and venture finance for sometime now. We have a marketleading expertise advising both technology companies and realestate companies in accessing both debt and equity and navigatingfinancial institutions, private equity and the public capitalmarkets. Because of our clients' vision and pioneering entry intothe space, we were early to understand the industry. Now that realestate and venture sponsors and investors are interested inentering the space, we are able to introduce them to our networkwithin the crowdfunding industry and facilitate their ability toefficiently incorporate new technology into theiractivities—whether they want to launch proprietary portals or listor partner with existing multi operator marketplaces.

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GlobeSt.com: How is crowdfunding changing thecommercial real estate space?

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Feldman: Historically, individuals andinstitutions were the primary investors in commercial real estate.In the early 20th century, syndication of debt and equity fundedthe development of much of Manhattan, including the Empire StateBuilding. Over time, with the growth of the private equityindustry, real estate investment trusts (REITs) and otherinstitutional aggregators of capital, commercial real estate hasincreasingly become controlled by large funds. Whereas in the pastsmaller investors pooled money to purchase individual assets, thesenew larger investors commonly buy real estate in pools, often inmarkets far from investors, with which they have little or noconnection. By bringing off-line private equity funds online tomeet real estate sponsors, deals can get funded with efficienciesin time and lower fees. Investors again have the opportunity todirectly invest in projects both large and small throughout thenation with the click of a mouse.

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GlobeSt.com: What are the legal challenges ofcrowdfunding?

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Feldman: Crowdfunding, while offeringnew and exciting opportunities, also comes with a host of legalchallenges. Individuals must keep in mind the legal risks relatingto securities liability, company formation, fund formation,Regulations 506 (b) and (c), compliance under the JOBS Act,consumer protection, the public capital markets, M&Atransactions, investment management, the Investment Company Act andthe Investment Advisors Act.

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GlobeSt.com: What are your goals for thecrowdfunding practice?

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Feldman: Regardless of businesssector, our goals start with enabling clients to bring privateequity raises online so that they may efficiently, prudently andprofitably raise, deploy, manage and de-risk capital with greatertransactional efficiencies, financial transparency and costsavings. With leading practices in securities, venture capital,intellectual property, real estate, privacy and private equity, weare facilitating scope, scale and success for Goodwin clients.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.