CrowdStreet crowdfunds real estate

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Articles - October 2013
Monday, September 30, 2013


1013 FOB CrowdStreet
Darren Powderly, CEO of CrowdStreet
// Photo by Joe Kline

Founders of a Bend-based crowdfunding company are betting that the online masses will be as hungry to invest in old-school commercial real estate as they have been to back Spike Lee movies and premium hooded sweatshirts. CEO Darren Powderly and his two partners launched CrowdStreet in September, offering for as little as $5,000 shares in six commercial real estate projects in California and Oregon. CrowdStreet will eventually list commercial real estate investments in other Western states. “We’re taking that whole concept of real estate syndication, and we’re applying today’s technology,” Powderly says. For now, only “accredited” investors with a net worth of at least $1 million or earnings over $200,000 can invest through CrowdStreet. But Powderly expects the pending Securities and Exchange Commission rules and regulations for the Jumpstart Our Business Startups Act will “democratize” commercial real estate investing. “When the JOBS Act was announced, we knew immediately that the crowdfunding concept could be applied to investment real estate, and we just went for it,” he says. “There’s a whole bunch of up-and-coming Gen Xers and younger folks who are comfortable with this behavior of transacting online.” CrowdStreet caters to hands-off investors not interested in the day-to-day management of shopping centers, apartment complexes and office parks. Investors pay nothing to CrowdStreet, which makes money by charging fees to property owners with projects listed on the site, says Powderly, who has sold commercial real estate for 10 years.

COMPANY: CrowdStreet

PRODUCT: Commercial real estate crowdfunding investment platform

CEO: Darren Powderly



MONEY TRAIL: “We have not gone out and raised $1 million worth of [venture capital] money just to see if we have a good idea,” Powderly says. “We’ve bootstrapped this with very conservative resources. At some point in time, we will have to raise a lot more capital and expand and hire 15 to 20 people to grow the business, but at this point, we’re lean and mean.”

FRAUD CONTROL: CrowdStreet vets investments and the people behind them through criminal background and reference checks. “We really want to, maybe more so than anything else, prevent any bad actors from participating in our site,” Powderly says.


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Old power works like a currency. It is held by few. Once gained, it is jealously guarded, and the powerful have a substantial store of it to spend. It is closed, inaccessible, and leader-driven. It downloads, and it captures.

New power operates differently, like a current. It is made by many. It is open, participatory, and peer-driven. It uploads, and it distributes. Like water or electricity, it’s most forceful when it surges. The goal with new power is not to hoard it but to channel it.

The authors, Henry Timms and Jeremy Heimans, don’t necessarily favor one form of power over another but merely outline how power is transitioning, and how companies can take advantage of these changes to strengthen their positions in the marketplace. 

Our Powerbook issue might be viewed as a case study in the new-power transition. This annual book of lists provides information on leading businesses, nonprofits and universities in the state. Most of the featured companies are entrenched power players now pursuing more flexible and less hierarchical approaches to doing business. Law firms, for example, are adopting new technologies and fee structures to make legal services more accessible and affordable.

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That sounds like a call to arms. Or a New Year’s resolution. Old power or new, the goals are the same: to be a force for positive change in the world. Happy 2015!

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