March 16, 2015
I’m just returning from a major CrowdFunding conference sponsored by IMN in New York City where I was the opening speaker on the opening day. It was a fantastic gathering with 350 highly sophisticated financial people. I knew many people from the CrowdFunding industry and a lot of people who are promoters, developers, and DealMakers that want to raise capital through CrowdFunding.
It was painfully obvious, that most of the people who are running the Funding Platforms (originally known as portals) are technology people who have very little background in real estate. It’s ironic that they are “curating” deals but that would explain why they are picking simple, cash flowing opportunities while ignoring more complex, value-added transactions.
It makes you wonder how in an Internet world, which is based on disintermediation, these venture capital-backed Platform companies are inserting themselves into transactions as a new intermediary in a form of reintermediation. They are trying to kick out money brokers and insert themselves instead. But only if they pick your deal to CrowdFund, which is probably a long-shot.
What’s also clear to me is that this industry is ready to explode. It reminds me tremendously of 1995 to 2000 when the Internet was on fire and still in its infancy. Companies were rushing to get eyeballs, customers and deal flow. And the same thing is happening in the new CrowdFunding business. People are cutting rates and acting stupid so that they can be on the cutting edge of the industry. That certainly is not sustainable and there will be a revolution. But many of these companies already are getting astronomical valuations for very little activity.
One company that I spoke with did a total of 40 deals with 15 sponsors and just closed a round at a $20M valuation. I believe they’re going out now for more at an even higher valuation. The bottom line is that it’s a race to the finish line – meaning selling out to larger companies. This industry is real and it’s on fire. I’m on fire too. As someone who comes from the Venture Capital business, I am all in – and very bullish about what it happening.
This is a space that I know well and I am not missing out on this one.
People ask why the hedge funds want to be in the CrowdFunding Business. At a conference like this, it’s clear and obvious. Not only is it a new source of potential investors but it’s actually turning out to be a new tranche of capital much like debt or equity, there are certain rounds that are specifically dedicated to CrowdFunding. People are doing unique and amazing things and it was a fascinating experience.
It always excites and invigorates me to go to New York and it winds me up being with these thought leaders and super aggressive entrepreneurs. And it motivates me to continue building the high quality Super-Platform that we are developing with dozens of our colleagues. This Platform is rolling out now to the partners in the Bullseye Capital Fund, then to alumni of our Syndication and Hedge Fund Symposium program who have already built funds – almost all of which have joined the Platform.
Shortly, we will announce the Platform to the wider audience of alumni of our program. And finally we’ll be opening invitations to other people. Our roll-out will position us as one of the most active and most powerful Platform companies in the country.
Every promoter should develop a database of investors and begin using Platform technology. Whether you build your own (a pricey endeavor) or join the Bullseye Capital team, get moving because first movers always get an advantage – in this case, a venture capital-backed, Wall Street style mega advantage.
I know I want and entrepreneurial home run. The question is how badly you want it.
If you have any questions, reach out and let’s talk, but let’s talk fast because the opportunity is racing toward the finish line.
The Bullseye Capital Fund is an opportunistic buyer of multi-family and commercial real estate that partners with accredited investors who participate in profits. Using our expertise, vast network of resources and experience, we select, fix and profit from distressed assets nationwide. The Fund generates revenue in three ways. Our Value-Add Group optimizes, renovates or otherwise adds value to real estate projects where profit can be realized within one year; our Arbitrage Group uses technology to find and flip parcels for small, but frequent and immediate profits; and our non-performing loan group buys, modifies or repositions non-performing loans for resale. These strategies, combined with our property picking and negotiating skills enable us to produce strong and consistent returns for our investors and partners. For more information, please go to: www.bullseyecapfund.com.