On my previous blog post, I gave a brief overview of the new general solicitation rules for 506 private placements and concluded by saying that GroundBreaker will be introducing a new service for real estate entrepreneurs of all types. I trust none of our readers have lost any sleep after that last week’s cliffhanger finale. Now, let’s get to business.
We originally conceived GroundBreaker as an online marketplace where real estate investors could meet real estate entrepreneurs, see what they’re up to, and invest in their projects. This original idea was meant to solve a two-sided problem: on the one hand, the average investor has limited access to direct investment opportunities in real estate and, on the other hand, real estate entrepreneurs have a limited source of equity capital to fund their projects. By creating this marketplace, we thought, the inner wheels of democracy and capitalism would ensure that the best projects get funded.
We decided, however, to soft-launch GroundBreaker using a private equity model, where GroundBreaker would cherry-pick and sponsor the best projects and work closely with entrepreneurs to get these projects funded. For those of you who follow this industry, this is the same business model that the folks at Fundrise and RealCrowd, to name a couple, have adopted. There are two main reasons why we adopted this model at launch. First, we wanted to test the technology ourselves before making it available to others. Second, we wanted the new rules for general solicitation to be effective, so that our full set of features could actually be used.
Now that we have tested our platform and the new rules are effective, we have gone full circle and are opening our tried-and-tested platform to every real estate entrepreneur who wants to use the best technology to streamline the entire fundraising and deal-management process throughout a project’s lifecycle. And, in case you are wondering, we will not be making a penny for listing a project or raising funds through our platform (at least not for now).
It’s nice to say that we are “creating real estate as an asset class” or that we are “democratizing real estate ownership.” However, these are empty words unless we give access to both investors and entrepreneurs to an online marketplace where they can meet, exchange ideas, and use the best tools to communicate and act on these ideas.
Now, don’t get me wrong: we still plan to follow our initial model and bring to life what in our opinion are the finest and most innovative projects. But cherry-picking and democracy are not compatible concepts. As much as we’d like to impose our architectural and design preferences on society, we think that the marketplace is better-suited to choose what gets built and what doesn’t; what gets torn down and what gets preserved. That’s the beauty of the marketplace: the people can vote with their dollars. Finally, the end-users can now also be the financiers of the projects around them.
And so it is here: The Premier Open Marketplace for Real Estate Investments. This is GroundBreaker.