Rising StarRising Star: Tore Steen of CrowdStreet Brings Crowdfunding to Real Estate
Even if you don’t know much about commercial real estate, it should come as no surprise that building offices, malls, and the like costs a lot of money. So where does all that money come from?
Investors have long played a key role in financing commercial real estate projects, though typically these investment opportunities are available only in an offline, private marketplace open to select investors. Enter CrowdStreet, a just-launched crowdfunding platform that is on a mission to change the way real estate is financed.
Co-Founder Tore Steen tells us more:
The best thing about being an entrepreneur is not just building a product, but also building a team that will share in the success of company.” (Tweet this.)
The spark that inspired the birth of CrowdStreet: With the passage of the JOBS Act came the opportunity for investors and consumers to have access to investment opportunities in private companies, products, and other offerings. The use of crowdfunding for a space like commercial real estate struck us as a huge opportunity.
The problem you solve: Real estate is typically funded in an offline, private, closed marketplace. We’re bringing that online in a transparent, open internet channel and giving access to accredited investors who many times did not have access to those deals.
Why you’re the right person for the job: Building a crowdfunding marketplace takes depth in both consumer Internet & software, and the domain we’re involved in, which is commercial real estate. My background is Internet & software. While at EarthLink in the early 2000s, I managed an online marketplace for 4-5 million consumers and after that worked in the online software space at WebTrends and Janrain. My co-founder Darren Powderly is in commercial real estate and served as president of Compass Commercial for the past couple years.
Here’s CrowdStreet in five minutes. Tore presented at OEN’s Angel Oregon Spring 2014 Showcase.
Video produced by SpykerMedia.
The best thing about being an entrepreneur: I’d say the excitement of building something new, overcoming challenges to win at the end of the day, and the satisfaction you get of reaching some of your goals. Also, not just building a product or website or platform, but also building a team that will share in the success of company.
The hardest thing about being an entrepreneur: You’re faced with more tasks than you can potentially accomplish given time, resource, and monetary restraints. You have to effectively evaluate which of those opportunities to tackle, in the right sequence. It’s all part of the juggling act.
Your biggest success to date: We just launched our first project on our crowdfunding platform, and we oversubscribed the goal within less than 30 days. With the size of the raise, over 1.8 million, it was one of the largest commercial real estate crowdfunded deals to date.
The FOX Business Network interviewed the CEO of our first project’s sponsor, Mainstreet, and though we did a lot of targeted co-marketing in the area where the facility is being built—Bloomington, Indiana—we had investors coming from all over the place… San Francisco, New York, Florida. That’s the power of building a transparent online marketplace with high-quality product offerings.
A lesson you’ve learned the hard way: There’s a temptation to want to list as many projects as possible. But our business is equity crowdfunding, not Craigslist, where anything can go up. We’ve learned to maintain a high bar of quality as we look at our project sponsors, to vet them and to look at their track record. We’ve learned to say no to about 80% of leads that come in.
#1 piece of advice for a budding entrepreneur: Keep an eye to your long-term goals, but always recognize what’s going on in the moment. It’s easy to lose track of long-term vision and goal and focus on too many things in the near-term. Keep in mind your vision and strategy and recognize that it’s a long and windy road to get there.
What wild success looks like: We’re known as the one of the leaders in enabling high quality commercial real estate. The way we’ll define success is building one of the strongest investor networks that’s available for putting capital to work for high quality commercial investment.
When you were a child, what did you want to be when you grew up? I wanted to start a business and be president of a company.
Your thoughts on Oregon as a place to start a business: In the tech/software/Internet space, there’s a developer talent pool that’s here. People are passionate and loyal about the projects they’re working onhere, and feel a vested interest in success of those projects.
The challenge is keeping a pipeline of talent flowing as we grow as a business community, specifically in the software/Internet space. That means grooming and educating our own residents and bringing more people in.
Anything else to share? Speaking of talent, Crowdstreet is hiring! You can find more info here.
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