crowd funding

[Anton De Vries]

I am starting a new project of a multifamily building. New ground up construction. Im still in the development phase, but I am curious about how crowd funding works. I have a few questions and Im hoping the BP community can help.

How do I start a crowd fund?

Is this the best route to go to raise capital? Im looking in the range of 600k

How does it work?

thanks for any help or direction you can offer

Anton

[Bryan Hancock]

A lot depends on your track record and experience.  Most of the platforms that exist today take the approach that they're going to screen out 99.9% of the applicants and select the best ones to list on their platform.  They are also looking to intermediate the relationship with investors in your project.  

There are new tools forming that give promoters the ability to directly bypass the marketplaces and give sponsors the tools they need to control their own capital formation process.  These include:

1.  Software that is compliant with the securities laws, builds the workflows needed, has tools to track the efficacy of marketing campaigns, handles back office functions, etc.  A good platform can wrap around your existing website to provide these tools

2.  Legal referrals to attorneys knowledgeable with crowdfunding.  These are hard to find if you don't know much about the industry.  A good crowdfunding attorney will save you a lot of time and money

3.  Marketing assistance that helps you get the word out about your site and targets accredited investors.  It generally takes 3-5% of the amount you raise in marketing spend to develop the relationships needed.  This cost can be thought of as an investment though.  If you do a good job you can harvest these investor relationships over the course of your investing career

4.  A marketplace to help you sell your securities for deals that qualify

Hope this helps some....happy to help in any way I can.