- Differentiators in offering refer to the regulatory offering types (accredited vs non-accredited investor offerings), which are of the utmost importance to real estate sponsors thinking about raising capital online.
- Differentiators in platform refer to both the purpose (marketplace vs captive) and the incentives behind the platform, which is a critical investment due diligence item for anyone intending to invest through crowdfunding.
To date, the most successful real estate crowdfunding websites tend to be crowdfunding marketplaces focused on accredited investor offerings. These include CrowdStreet.com, RealCrowd.com, and EquityMultiple.com. Because these sites attract multiple sponsors (a marketplace) and can bring more money to real estate transactions (no fundraising cap), they garner the highest quality deals and attract the greatest quality and quantity of investors. In addition, they protect their brand by vetting the deals and sponsors before permitting them to market their offerings on their platform.
There has been a glut of crowdfunding platforms erected with the hopes of emerging as the real estate crowdfunding market leader. However, this glut has outpaced user-adoption. As a result, numerous crowdfunding companies have closed down or consolidated as they have struggled to generate the fee income required to outpace their large overhead.