NexusCrowd announced last week that it had closed its first online investment offering, a crowdfunding initiative providing accredited investors with the opportunity to invest alongside institutional investors at the bargain basement minimum of $10,000.
“We are an online investment platform that partners with institutional investors. More specifically, private equity and real estate developers,” Hitesh Rathod, co-founder and CEO of NexusCrowd told WP. “We enter into long-term partnerships with these institutional investors who have their own regular deal flow and we get access to that deal flow.”
Its first deal raised $500,000 from accredited investors who were investing alongside Terracap Investments Inc., a commercial real estate developer with over 30 years’ experience across North America.
The project in question -- a $100 million, 238,000 square foot two-storey mall in Mississauga, Ontario, that will be anchored by a tier 1 bank and a large supermarket.
There’s no question this type of opportunity – a $10,000 minimum investment – doesn’t come around every day. Typically, an accredited investor might be required to invest as much as 10 times that amount in order to participate in the very same deal.
As an exempt market dealer in the province of Ontario, Alberta and B.C., NexusCrowd’s platform provides accredited investors with greater diversification in the alternative space to a much greater extent than was previously available.
“Our investors invest alongside our partners so every deal that goes on to our platform will have reached at least 50% of the funding target before we put it on our platform,” said Rathod. “The reason for that is we want to make sure that our partners have significant skin in the game and their interests are aligned with ours.”
Currently, however, advisors are on the outside looking in.
That’s because unless their firm puts the NexusCrowd product on the list of approved products, advisors are out of luck should the client invest off-book.
But that’s expected to change.
“We’ve spoken to several advisors who are very keen on what we’re doing. They essentially want us to put it on to their [firms] shelves. They’re in the process of making introductions to the right people so that we can put it on to their shelves.”
Real estate crowdfunding is on the rise; advisors who like this concept and want to benefit might want to let those responsible for new product exactly how you feel.