When we explain the process of raising capital online, we are quick to explain one simple tenet: this is not crowdfunding. Crowfunding is for charities, artists and people looking to raise small amounts of capital for either a product or something else of value, but not for an equity investment. Instead the tools used for equity investment are referred to as online capital formation platforms.
In recent years, online capital formation for private real estate equity investments has shown to be more than just a biproduct of JOBS Act regulatory changes. In 2018 and beyond, we believe the trajectory of online capital formation will continue upward with more platforms, more deals and more investors becoming involved for the reasons below.