Crowdfunding Moves Toward Mainstream

LOS ANGELES—Over just the last few months, crowdfunding has moved away from the frontier toward the mainstream, according to Adam Hooper, founder and CEO of the crowdfunding platform RealCrowd and a panelist on the Opportunities in Crowdfunding platform at the upcoming RealShare Investment and Finance conference. Hooper will join panelists, including Christopher Rising, president and COO of Rising Realty Partners, and Elizabeth Braman, chief production officer at Realty Mogul, at the California Club on June 25 to discuss the current crowdfunding sector.

“The most exciting thing with our business and the industry in general is the change in attitude over the last two to four months,” Hooper tells GlobeSt.com. “This method of raising capital has gone from being on the fringe to a legitimate source of capital. I think that is reflective in the operators that we are dealing with and the interest that we are getting.” For Hooper, the platform is about providing investors and sponsors access to opportunities across the country that they wouldn't otherwise have.

The platform will only move closer to the mainstream as the regulatory environment continues to evolve. “The biggest thing for us is in Title 2 of the Jobs Act that made the change to allow for general solicitations,” says Hooper. “Before September, you couldn't advertise the specific deals that you were raising capital for. Since that change, you can leverage anything you want, from newspapers to television, to tell that story. We think that is a transformative shift in how real estate can be capitalized.”

Of course, the regulatory environment is continuing to shift and adapt to this new, technologically driven platform. That includes changes around Title 3 to the Jobs Act as well as potential changes later in the year that could open investment opportunities to unaccredited investors. “There are enough moving pieces in the Title 3 regulation where we are really unsure about how that is going to come to a practical use when that is put in place. For our particular business, we are relying on that general solicitation,” says Hooper, who has concerns about the possibility of unaccredited investors entering the space. “Once you open it up to unaccredited investors, the auditing requirements are going to be pretty onerous if you raise more than $500,000. You'll have to have audited financials, and that is cost prohibitive. I think there is, in that space, a need for some change. It sounds great from an altruistic standpoint, but the practical standpoint will need to be addressed.

While getting ready for the conference, Hooper also discussed how retail is in the early stages of a transformation. To hear more about Hooper's thoughts on the crowdfunding sector and the regulatory environment, attended the RealShare Investment and Finance conference on June 25.