Real Estate Crowdfunding Platform to Unite Investors & Issuers Globally
By Erick Caceres - Community Partner - Santo Domingo & FinTech Connector Member
The NEXGENCROWD vision was born out of a long-time passion for disrupting legacy financial services industries and identifying the real estate space as one that still suffers from a black hole. I envisioned a way to provide broader access and participation in real estate investment to everyday individuals. When the vision was evident to me, I began to explore ways to solve the problem by creating a prototype to help envision NEXGENCROWD.
The past eight years of my career have been some of the most educational and exciting times of my professional life. I have a first-hand view of Fintech startups as they discover value and create growth by disrupting financial services globally across various ecosystems. These disruptors are creating significant opportunities for businesses to connect directly with consumers without middle-tier services.
As a migrant to "all things tech," I segued from the payment product development space to fintech innovation that has disrupted that industry in many ways, my journey can only be described as a 'rollercoaster of innovation' set in a fintech theme park.
Enter FinTech Connector
My transformative journey from advising innovative startups to financial services (finserv) companies, brought me to the doorstep of FinTech Connector. I loved Angel Lorente’s vision of a real-world and online member networking and FinTech platform for the next-gen of financial services innovation. I became one of the very early evangelists, collaborating with Angel Lorente and Mary Olson.
I helped shape the vision by serving as Chief Operating Officer through the pre-launch phase. During which time and up until now, I was able to CONNECT, COLLABORATE and CULTIVATE ideas that have led me to where I am today as the Community Partner for the Dominican Republic and on the verge of launching NEXGENCROWD.
The JOBS ACT is passed into law and unlocked opportunities for NEXTGENCROWD. The JOBS Act is a law intended to encourage funding of small businesses in the United States by easing many of the country's securities regulations. It passed with bipartisan support and was signed into law by President Barack Obama on April 5, 2012. Paving the way for Crowdfunding, which generally refers to the use of the internet by small businesses to raise capital through limited investments from a large number of (individual and or accredited) investors.
From that point forward, the REAL ESTATE industry became positively affected by the introduction and implementation of technology, changing the way investors and issuers view and participate in real estate deals.
The REAL ESTATE CROWDFUNDING Gold Rush
It was off to the races as several real estate crowdfunding platforms began to emerge, both in the US and abroad. Most are serving local issuers looking to raise capital for their local projects. Some international platforms looking to serve their local markets are now also operating in the space.
MARKET STATS - Illustration #1
As we were setting the stage, the market continued to report favorably about real estate crowdfunding. It was clear to me that this is where I needed to concentrate my efforts. However, I faced the same issues that startups face when attempting to enter a space that has been trail-blazed by others before them.
The start-up process required taking an analytic approach to the existing real estate crowdfunding platforms that provided deal offerings, under Title III of the JOBS Act and that established crowdfunding provisions for early-stage businesses to offer and sell securities. Those operating under the SEC subsequently adopted “Regulation Crowdfunding” and they implemented crowdfunding provisions of the JOBS Act. We thoroughly educated ourselves about the regulatory framework of this new real estate crowdfunding industry.
NEXGENCROWD’S Competitive Advantage
The general concept was formed with an infinite list of tasks outlined on the whiteboard. We concentrated on one question written in red at the center. WHAT SETS US APART?
I had a period of clarity while examining existing platforms. They all seemed exclusively focused on their local markets and I had solved the problem.
The solution was building a CROSS BORDER crowdfunding marketplace dedicated to providing casual and accredited investors the opportunity to invest in diverse asset classes such as Commercial, Residential, Hospitality and Infrastructure projects in emerging, established and frontier markets around the globe.
Foreign real estate is a tangible hard asset with diversification benefits for a traditional portfolio of stocks, bonds, and precious metals. It has the potential for capital appreciation and the ability to generate rental income in a foreign or local currency.
The international real estate markets behave differently then the EU and US. Managers can mitigate the risk of an overall portfolio by investing in multiple markets (ESTABLISHED, EMERGING, and FRONTIER) that are categorized by order of likelihood.
The TEAM is the secret sauce for SCALABILITY
One of the many lessons I’ve learned since embarking on my fintech journey and subsequent involvement with the FinTech Connector community is the importance of gathering a team that not only shares my vision but also has tools at their disposal to succeed.
After a long search, I was fortunate to engage co-founder and CTO, Vince Pitetti. Vince not only had crowdfunding platform development experience but shared my vision to develop a platform that offered investors an opportunity to manage a real estate investment portfolio with a global scope. While simultaneously giving issuers and their projects visibility and the ability to raise funds from a more extensive and diversely-international investor base.
Our penetration and scalability plan is composed of two pillars, online and real-world engagement. FinTech Connector’s success has inspired our model in building a growing community of connected professionals. By implementing our model, NEXGENCROWD will rely on a network of “Market Advisors” to serve as ambassadors for the NEXGENCROWD platform. We will be hosting live events and connecting investors with issuers while also providing our underwriting team with insights on real estate deals in their respective markets.
Currently, there are several LATAM countries represented as we get closer to our launch date. The market advisors leading these efforts are (Miguel Basurto) in Central America and (Felipe Montoya and Gustavo Palacios) in South America. Each is laser-focused on cultivating and bringing the NEXGENCROWD vision into fruition.
We are at the ten-yard line and ready to score!! The plans include key components to facilitate a successful go-live for the platform. We are opening up the lines of communication to members of FinTech Connector that are interested in participating as:
1- Market advisors with real estate investment experience in a particular country;
2- Enablers that can attract investors;
3- Attorneys with a specialty in the crowdfunding space.
For additional information or to schedule a site demo, please feel free to contact me directly.