Real Estate Connect: How crowdfunding will change real estate

When the Securities and Exchange Commission finally gets around to fully implementing it, the Jumpstart Our Business Startups Act (JOBS Act) will make it legal for companies to sell equity stakes to anyone over crowdfunding platforms.

Giving startup companies a new way to raise capital — from small investors on the Internet — could fund new ideas and change the way we buy real estate.

Companies like indiegogo, CrowdFunder and Realty Mogul are already inventing new platforms for investors to pool their resources to make new companies — and new real estate deals — come to life.

It’s been more than a year since President Obama signed the JOBS Act into law, but the SEC has struggled to draft some of the rules required to implement the act.

One critic, Steven Rattner, worries that small, unsophisticated investors will be easy prey. He calls the JOBS Act the “greatest loosening of securities regulation in modern history,” and says it’s no wonder that the SEC has taken its time writing the regulations that would implement the act’s crowdfunding provision.

Some House Republicans who are worried that the SEC will be too cautious in implementing the JOBS Act are reportedly working on follow-up legislation that would also address what some business leaders see as the shortcomings of the original bill.

A section of the JOBS Act that eases the regulatory burden for companies with less than $1 billion in annual revenue to undertake an initial public offering is already in effect.

Although Trulia reportedly used provisions of the JOBS Act to make the company’s initial IPO filing confidentially, it bypassed most of the exemptions for small companies in order “to be just like every other public company,” CFO Sean Aggarwal told the Wall Street Journal in January.

To learn more about crowdfunding and the changing capital landscape, hear what leading experts have to say at Real Estate Connect San Francisco. Participating in a Wednesday, July 10 panel discussion, “Crowdfunding. A New Way to Buy. A New Way to Raise Capital,” will be Jilliene Helman, founder and CEO, Realty Mogul (@Realty_Mogul); Brandon Jenkins, director of product development, Fundrise, Popularise; Lou Doctor, CEO, Crowd Supply (@crowd_supply); and Nav Athwal, founder, RealtyShares (@navathwal).