New/Updated Platform Reviews
First National Realty Partners (FNRP) is a commercial real estate private equity firm that focuses on grocery-anchored commercial shopping centers, offering both investments in individual properties and an Opportunity Fund across all of their offerings. FNRP is vertically integrated, handling things like property management, leasing, and financing internally, which they say allows them to leverage a strong network of tenant relationships with major retail brands, such as Whole Foods, Kroger, and Shop-Rite. The target IRR on most offerings is 12-18%, open to accredited investors. Our rating: Excellent.
Title3Funds is an investment crowdfunding platform using Reg CF to offer investments in startups and small businesses to anyone, and with relatively low minimums (as low as $50). Selection is relatively limited, but spans a diverse range of industries. Our rating: Very Good.
CrowdStreet (read our review) has launched their third Opportunity Zone Fund, and investments in qualified opportunity zone funds completed by December 31st of this year not only defer capital gains tax already due, but also reduce the amount due by 10%. Investors also have the potential to eliminate all future capital gains taxes due from the appreciation of the new investment into a Qualified Opportunity Zone Fund. Open only to accredited investors. Find out more at CrowdStreet. 👈
Moro is an e-commerce platform that established the power of social search in the home furnishings category. Applaudable is a social media platform (in beta) that allows users to share their greatest experiences across any area of their life. Applaudable then distributes these experiences through a content feed. Together, both business lines make up Moro & Applaudable, combining a social platform and e-commerce business, and they are raising up to $10M at a $35M valuation on Republic (read our review). Minimum investment is $266, open to all investors. Find out more at Republic. 👈
YieldStreet (read our review) has launched Single Family Rental Diversified Fund I, which will own a portfolio of single family rental (SFR) properties primarily located in key U.S. geographies including Atlanta, GA, Dallas, TX and Charlotte, NC, among others, with a target annualized return of 12-14% and a 30-month term. Open only to accredited investors. Find out more at YieldStreet. 👈
🎉 As a reminder, Hedonova is still offering YieldTalk readers a $50 sign-up bonus for new investments in their alternatives hedge fund, which is effectively an immediate 5% return on a $1,000 investment 📈. Click here to claim your $50 bonus 👈
Worth Reading this Week
A roundup of insights and interesting links from around the investment crowdfunding ecosystem.
At this point, the transitory view has been wrong. That includes recent estimates of CapitalSpectator.com’s Inflation Trend Index (ITI), which has been estimating that inflation pressures would peak. Like many other attempts to forecast near-term pricing pressure, ITI has underestimated the upside bias.
🏘️ There’s an emerging narrative that millennials (many of whom are now smack in the middle of the prime home-buying decade of their 30s) have been driving much of the recent demand in residential real estate. BUT if all those millennials were moving out of apartments as they bought homes, we’d expect to see a decline in rental demand (since the US overall population isn’t really growing). Instead rental demand is also increasing, and Bill McBride makes the case that more households are forming with fewer people in them:
[S]some of those additional households are from young adults moving out of their parent’s homes … There is also probably demand from roommates separating as their incomes increase (think Friends Joey and Chandler moving into their own apartments). And possible demand from more separations and divorces in 2021 (divorce data is released with a lag).
According to Wealth Management, large investors like family offices are pouring money into private equity real estate funds:
According to Preqin, capital raising is now exceeding 2020 levels, but still trailing volumes seen in 2019. Year-to-date fundraising through mid-October stood at $152.2 billion, which is above the $146.4 billion raised in full year 2020 and below the $186.1 billion annual raise for 2019. Preqin also noted that funds in market are at record levels, both by number and aggregate capital targeted. At the end of third quarter, there were 1,284 funds targeting $365 billion in capital compared to the 794 funds in the market targeting $251.1 billion in capital at the start of third quarter 2019.
Startups & Venture
🩸 The Verge has published the first in a 3-part series about Elizabeth Holmes and the spectacular implosion of Theranos, which had raised nearly $1B in venture funding from prominent investors like the Walton family and Rupert Murdoch. A fascinating cautionary tale, with plenty of blame to go around, including a fawning tech media desperate to retain their access to celebrity CEOs.
The startup world is full of incredibly advanced technology like artificial intelligence and micro-satellites, yet the detailed ownership record for most startups (known as the Cap Table) is still tracked in … an Excel spreadsheet. A group of 37 companies, including AngelList and Fidelity, are banding together to try and change that:
Prior to a company going public, there really is no standardized means of tracking ownership. Particularly as a company scales and starts adding things like convertible notes, employee stock options, and full ratchet dilution clauses, cap tables can get complex and sometimes a little disorganized. Since there’s an array of templates or formats out there, cap tables can be a headache for prospective investors to parse through, or even for employees who may need to pull equity data to apply for a mortgage.
strategy+business reviewed “The Power Law”, a new book on venture capital from economic historian Sebastian Mallaby, tracing the arc of influence of VCs, including the shifting power dynamics between founders and funders (a trend that continues in the equity crowdfunding, where investors will likely never even meet the founders):
Three decades of growth in the industry would result in the number of venture capital firms mushrooming, granting founders more options. In 1999, Sergey Brin and Larry Page of Google met John Doerr, one of the most highly regarded VCs of the age. The presentation they gave was 17 slides long and illustrated with cartoons. Five years later, Mark Zuckerberg wore pajamas to a meeting with one of Doerr’s rivals. Neither VC was dissuaded. But while [OG VC Arthur] Rock used to demand up to half of the company for his involvement, Doerr and his contemporaries were glad to own an eighth.
Ray Dalio, founder of Bridgewater Associates, the world’s biggest hedge fund, says he’s changed his mind about Bitcoin and other digital assets, calling them an attractive alternative to cash – especially with inflation on the rise:
The billionaire, who’s previously compared cash to trash, reiterated his dislike for fiat money by calling it the poorest investment. The debasement of fiat money — a result of governments’ unprecedented fiscal stimulus to help economies through the pandemic — has made assets like bitcoin look more inflation-resistant, he argued.
Meanwhile, the SEC remains skeptical, pushing a long-expected decision about two Bitcoin ETFs into next year:
On Wednesday, the SEC postponed two major Bitcoin exchange-traded offering proposals, including NYSE Arca’s “actual” Bitcoin ETF, named Bitwise Bitcoin ETP Trust, and Grayscale Bitcoin Trust’s Bitcoin ETF. The SEC now expects to decide whether to approve or disapprove, or “institute proceedings to determine whether to disapprove” Bitwise’s BTC ETF and Grayscale’s BTC ETF on Feb. 1 and Feb. 6, respectively.
Odds & Ends
- For a limited time Personal Capital is offering 6 months of free wealth management services
- Real estate platform Fundrise (read our review) is consolidating six separate income-focused eREITs into one larger fund, the Fundrise Income Real Estate Fund
- Sherwood Neiss at Crowdfund Capital Advisors is looking for respondents to their Annual Online Investment Survey. The survey deadline is December 31, natch
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