Crowdfunding startup Sharestates passes $100M mark

Institutional funds fueled platform’s growth

TRD New York /
Mar.March 16, 2016 02:45 PM

Sharestates said it crossed the $100 million threshold in capital raised through its online crowdfunding platform, marking a milestone for the year-old startup.

That the New York-based firm was able to reach the $100 million mark so quickly is largely due to its institutional partnerships.

Co-founder Allen Shayanfekr recently told The Real Deal that around 80 percent of the capital Sharestates raises through its online platform comes directly from investment funds, and only 20 percent from crowdfunding investors in the strictest sense.

In contrast, rival platforms like Prodigy Network, Patch of Land and Fundrise have raised most or all of their funds to-date from small-time investors – the so-called crowd.

Sharestates, founded by Atlantis Organization veterans Allen Shayanfekr, Radni Davoodi and Raymond Y. Davoodi, specializes in bridge funding for small commercial and residential real estate projects. Most investments offered on its platform come with a term of 12 months and a minimum individual investment of $1,000. The startup claims to have returned $21 million to its investors to-date, with an average annual return of 10.4 percent.

In May 2015, Texas-based Ranger Direct Lending Fund agreed to invest up to $30 million through Sharestates – a target it has since exceeded.  “It brings more validity, more traction to the platform,” said Sharestates’ co-founder Allen Shayanfekr of the agreement with Ranger.

As The Real Deal previously reported, Crowdfunding startups increasingly turn to institutional investors as a quick and relatively easy way to access capital. But while partnering with investment funds offers the chance to grow more quickly, it also raises questions over the appeal of the traditional crowdfunding model.


Related Articles

arrow_forward_ios
114 East 25th Street (Google Maps)

Troubled crowdfunding firm sells building at $10M loss

Troubled crowdfunding firm sells building at $10M loss
While the amount of crowdfunded real estate deals on offer has declined substantially in recent months, demand is strong for those investment opportunities that remain, such as the Renaissance Harborplace Hotel in Baltimore (iStock, Google Maps)

Small investors swarm crowdfunding real estate deals

Small investors swarm crowdfunding real estate deals
Rodrigo Niño (Credit: Prodigy Network)

Real estate crowdfunding pioneer Rodrigo Niño dies

Real estate crowdfunding pioneer Rodrigo Niño dies
Rodrigo Niño, 17 John Street and 85 West Broadway (Credit: Prodigy Network, Google Maps)

Crowdfunding firm seeks $30M bailout for second commercial building

Crowdfunding firm seeks $30M bailout for second commercial building
From left: 84 William Street, Rodrigo Niño and Larry Davis of Shorewood Property Group (Credit: Google Maps)

Crowdfunding firm to investors: Cough up $40M or lose it all

Crowdfunding firm to investors: Cough up $40M or lose it all
CrowdStreet CEO Tore Steen (Credit: iStock)

CrowdStreet hits $1B milestone, crowdfunding firm claims

CrowdStreet hits $1B milestone, crowdfunding firm claims
Rodrigo Nino, 84 William Street in Lower Manhattan and 1400 N. Orleans Street in Chicago (Credit: Facebook, Google Maps)

Prodigy Network investors say millions in limbo as company shuts them out

Prodigy Network investors say millions in limbo as company shuts them out
Cadre founder Ryan Williams and Allen Smith

Cadre brings on former Four Seasons CEO as president

Cadre brings on former Four Seasons CEO as president
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...