I have read many “how to” and “best practices” articles for crowdfunding in general. No one, however, has taken the time to apply these tips to the real estate industry, which has its own quirks. So, for the first time, after many interviews with investors, and based on what we have observed other successful sponsors (i.e. the ones that operate their own platforms) do, here are my top 10 picks:
- Allocate Resources. Crowdfunding takes time. You are now bypassing the broker (i.e. placement agent) and saving money in the process. That does not mean you can just hang your hammock, mix a mojito, and chill until your money is in the bank. You will need to work hard at selling your deal and your company, as well as building lasting relationships with your investors. This is 21st century real estate fundraising at its prime. It will take time and resources. But if you play your cards right, you will have a large pool of investors to back your projects.
- Build a personal connection. People don’t just invest in “deals.” People invest in you and your team. Make sure they get to know you. You should schedule periodic video calls, investor meetings, etc. (don’t worry: we handle the logistics) and give your investors a chance to meet the people behind the deals.
- Be thorough. Whenever we ask you to complete a form or add additional information about you, your partners, or your company, it is because we know those are things investors want to see. Make sure you present everything that is relevant to your deal. This not only minimizes back-and-forth but also shows that you know what you are doing.
- Have backup. This does not only make sense to cover your behind, but will also help you look good in the eyes of potential investors: have backup for everything you say and have it readily available for those who request additional information. This is particularly important for comparables, market, and financials.
- Presentation matters. Boy, this one is a biggie: don’t use that old prom photo from the 80’s (with those perms, crazy makeup, and ill-fitting tuxedoes). Upload high quality pictures and logos. Make sure you proof everything that gets posted. You, your team, and your project should look professional and presentable at all times.
Stay tuned for more tips next week!