Crowdfunding, CrowdFunder of The Year, Jilliene Helman

CrowdFundBeat Honors Real Estate ‘Mogul’ with Crowdfunding Award,  

By Robert J. Mullins , CFB Senior Staff  Writer,

Jilliene Helman has discovered the power of using crowdfunding to open up the market for real estate investments. As the co-founder of Realty Mogul, along with partner Justin Hughes, she has already completed multiple deals across the country in just eight months of fulltime operation.

For her success and for her advocacy on the subject from appearances at several crowdfunding conferences, CrowdfundBeat is awarding Helman its CrowdFunder of the Year Award for 2013.

In an interview with CrowdFundBeat Senior Staff Writer Robert Mullins, Helman discusses the new U.S. Securities and Exchange Commission (SEC) rules on crowdfunding by accredited investors, coming new rules on non-accredited investors and the philosophy behind Realty Mogul:

Jilliene Helman: The hypothesis that we’ve been operating under is really twofold. On one side, there’s an economic opportunity for investors to invest in real estate and make money investing in real estate and generating income. So all of the transactions that we do generate cash flow for our investors. We’re looking for opportunities to get dividends back to our investors, directly back into their bank accounts. Then the other hypothesis for starting the company was the political rationale. The JOBS Act passed through Congress last year and while we still don’t have final regulations on Title III, which is for non-accredited crowdfunding, there is a huge market of accredited investors that has been largely untapped. You look at the number of accredited investors in private placement in 2012 and it was less than 40,000 accredited investors out of 7 or 8 million. So we thought that there’s this political opportunity where people are going to be more comfortable investing through the Internet and we took that economic opportunity and that political opportunity, put them together and out came Realty Mogul.

Robert Mullins: You said in an article that “crowdfunding was revolutionizing capital formation in real estate.” What changes with crowdfunding?

Helman: I think the biggest things are access to deal flow and access to capital. When it comes to deal flow, millions of investors have never had access to deal flow, historically. There’s been no simple way to get them access to that deal flow. Now that you have the Internet and have the ability to transact online, we can open that up to millions of investors all over the world. So the access to deal flow is huge. And the flip side is access to capital. You have these real estate companies who historically were working with the banks, investment banks or the other established players to get capital, but they didn’t have a base of thousands and thousands of investors that they could go to. And that’s where we are. We’re a conduit in the middle and that’s what I think revolutionizes this market.

Mullins: The SEC has approved regulations for accredited investors but the regulations for non-accredited investors won’t be finalized until sometime in 2014. What are your concerns about what the final rules on non-accredited investors will be?

Helman: The rules for accredited investors allow for general solicitation as long as the investors are validated. I think the SEC gave pretty decent guidance on how to accredit those investors.

It’ll be interesting to see with the Title III rules [on non-accredited investors] how they come down on doing simultaneous [fund] raises with accredited and non-accredited investors. It looks like they’re going to deal with that in a way that’s favorable and we’re looking at that very closely.

Mullins: What kind of deals have you done so far at Realty Mogul?

Helman: We crowdfunded what we think is the first shopping center in the country, maybe in the world, in Monterey, Calif. We have some top-tier tenants such as Safeway, CVS, Subway, Starbucks, McDonald’s and it was a great opportunity to allow investors, again going back to this nucleus of access to deal flow, many of whom never had access to that type of deal flow.

We own a 267-unit apartment building in Texas, we own a couple of assets in the Kansas market including a shopping center in Lenexa, Kansas, we own a host of single-family homes in the Tennessee market. We’ve done a variety of interesting transactions.

Mullins: Are you seeing competition from other crowdfunding real estate ventures?

Helman: Real estate is a really big space. Real estate alone is a $17 trillion business so there are going to be numerous people who will take to the Internet to raise capital for real estate.

At the end of the day I think it’s going to be about performance. We are really proud that eight months in business, we’ve already distributed over $600,000 back out to investors in distribution and principal payments. We really focus on cash flow. The need that we serve is generating income for investors, generating cash flow and also potentially investing for appreciation and longer term investments.

Mullins: How did you get into real estate in the first place?

Helman: I grew up talking real estate around the dinner table. My mom’s been in the real estate industry for decades, my father owned commercial and industrial projects. My grandfather built properties in the Los Angeles market, so I really learned my real estate chops from the dinner table.

Crowdfunding, CrowdFunder of The Year, Jilliene Helman

CrowdFundBeat Honors Real Estate ‘Mogul’ with Crowdfunding Award,  

By Robert J. Mullins , CFB Senior Staff  Writer,

Jilliene Helman has discovered the power of using crowdfunding to open up the market for real estate investments. As the co-founder of Realty Mogul, along with partner Justin Hughes, she has already completed multiple deals across the country in just eight months of fulltime operation.

For her success and for her advocacy on the subject from appearances at several crowdfunding conferences, CrowdfundBeat is awarding Helman its CrowdFunder of the Year Award for 2013.

In an interview with CrowdFundBeat Senior Staff Writer Robert Mullins, Helman discusses the new U.S. Securities and Exchange Commission (SEC) rules on crowdfunding by accredited investors, coming new rules on non-accredited investors and the philosophy behind Realty Mogul:

Jilliene Helman: The hypothesis that we’ve been operating under is really twofold. On one side, there’s an economic opportunity for investors to invest in real estate and make money investing in real estate and generating income. So all of the transactions that we do generate cash flow for our investors. We’re looking for opportunities to get dividends back to our investors, directly back into their bank accounts. Then the other hypothesis for starting the company was the political rationale. The JOBS Act passed through Congress last year and while we still don’t have final regulations on Title III, which is for non-accredited crowdfunding, there is a huge market of accredited investors that has been largely untapped. You look at the number of accredited investors in private placement in 2012 and it was less than 40,000 accredited investors out of 7 or 8 million. So we thought that there’s this political opportunity where people are going to be more comfortable investing through the Internet and we took that economic opportunity and that political opportunity, put them together and out came Realty Mogul.

Robert Mullins: You said in an article that “crowdfunding was revolutionizing capital formation in real estate.” What changes with crowdfunding?

Helman: I think the biggest things are access to deal flow and access to capital. When it comes to deal flow, millions of investors have never had access to deal flow, historically. There’s been no simple way to get them access to that deal flow. Now that you have the Internet and have the ability to transact online, we can open that up to millions of investors all over the world. So the access to deal flow is huge. And the flip side is access to capital. You have these real estate companies who historically were working with the banks, investment banks or the other established players to get capital, but they didn’t have a base of thousands and thousands of investors that they could go to. And that’s where we are. We’re a conduit in the middle and that’s what I think revolutionizes this market.

Mullins: The SEC has approved regulations for accredited investors but the regulations for non-accredited investors won’t be finalized until sometime in 2014. What are your concerns about what the final rules on non-accredited investors will be?

Helman: The rules for accredited investors allow for general solicitation as long as the investors are validated. I think the SEC gave pretty decent guidance on how to accredit those investors.

It’ll be interesting to see with the Title III rules [on non-accredited investors] how they come down on doing simultaneous [fund] raises with accredited and non-accredited investors. It looks like they’re going to deal with that in a way that’s favorable and we’re looking at that very closely.

Mullins: What kind of deals have you done so far at Realty Mogul?

Helman: We crowdfunded what we think is the first shopping center in the country, maybe in the world, in Monterey, Calif. We have some top-tier tenants such as Safeway, CVS, Subway, Starbucks, McDonald’s and it was a great opportunity to allow investors, again going back to this nucleus of access to deal flow, many of whom never had access to that type of deal flow.

We own a 267-unit apartment building in Texas, we own a couple of assets in the Kansas market including a shopping center in Lenexa, Kansas, we own a host of single-family homes in the Tennessee market. We’ve done a variety of interesting transactions.

Mullins: Are you seeing competition from other crowdfunding real estate ventures?

Helman: Real estate is a really big space. Real estate alone is a $17 trillion business so there are going to be numerous people who will take to the Internet to raise capital for real estate.

At the end of the day I think it’s going to be about performance. We are really proud that eight months in business, we’ve already distributed over $600,000 back out to investors in distribution and principal payments. We really focus on cash flow. The need that we serve is generating income for investors, generating cash flow and also potentially investing for appreciation and longer term investments.

Mullins: How did you get into real estate in the first place?

Helman: I grew up talking real estate around the dinner table. My mom’s been in the real estate industry for decades, my father owned commercial and industrial projects. My grandfather built properties in the Los Angeles market, so I really learned my real estate chops from the dinner table.

CrowdFunding Film society hosts film festivals in San Francisco, Vancouver

BY Robert Mullins, ICFFF.org hosted film festivals Dec. 5 in San Francisco and Vancouver, B.C. to highlight the role of crowdfunding as a way to raise capital for film projects.The International CrowdFunding Film Festival in San Francisco drew film fans to the Supper Club restaurant in the South of Market part of town. Simultaneously, the Vancouver event was held at a restaurant there.Film projects are among the most popular uses of crowdfunding, where individuals contribute money to a project just as a show of support for the entrepreneur.

One of the most successful crowdfunded film was a movie based on the TV series “Veronica Mars.” The “Veronica Mars Movie Project” raised $5.7 million from 91,000 people, both records for the Kickstarter film and video category. The movie, starring Kristen Bell, who also starred in the TV series, is scheduled for release March 14, 2014, one year and one day after the Kickstarter campaign began. Meanwhile, actor and director Zach Braff raised $3.1 million for his feature film “Wish I Was Here,” and directors Spike Lee and Joe Dante went to the crowd to fund their movie projects. Other notable film projects still seeking funds include a remake of the “Star Trek” TV series featuring some cast members from the original series, which raised $86,000 so far through Indiegogo, and a feature film starring Sylvester Stallone, Danny Aiello and Kyra Sedgwick that has raised $262,225 through Kickstarter, surpassing a goal of $250,000.

The International CrowdFunding Film Festival didn’t attract high-caliber celebrities like those, but it did draw people with more modest projects, many of them short films, documentaries, animated films and other productions. Sydney Armani, the publisher of CrowdFundBeat, hosted the San Francisco event.“I see in these directors, writers, and cinematographers, the same core passion for innovation. They are not only artists but more importantly, entrepreneurs – they are seeking to touch the world and make a difference through their films. We know of their struggle to find financial backing and I believe crowdfunding will be the answer,” says Armani. more on ICFFF,org @
http://crowdfundfilmsociety.com/

Crowdfunding Film is a Game Changer

CrowdFunding Film Society chapters in Los Angeles, San Francisco, New York, Toronto, London, Vancouver. Chicago, Rome

The International CrowdFunding Film Festival will be held December 5-7, 2013 in San Francisco. The Film Festival is designed to bring together artists, filmmakers, and video game creators to showcase their craft, network and get crowdfunded, as well as collaborate with film schools in San Francisco and other cities with upcoming festivals in Los Angeles, New York, Toronto, London, and Vancouver.

The Crowdfunding Society has been formed since both established filmmakers and film students from universities all around the U.S. and other countries are increasingly looking to crowdfunding to find backing for their projects. With over countless films successfully funded through crowdfunding portals such as Kickstarter and IndieGoGo, Hollywood is now actively using this approach to fund new films. For example, director/writer Rob Thomas raised over $5.7 million for "Veronica Mars" while Zach Braff’s feature "Wish I Was Here" raised $2.6 million in donations. Concurrently, newer filmmakers and students have funded films for as little as $5000-30,000.

Knowing what to do and not to do is critical, because as the CrowdFunding Society organizer Sydney Armani states: "I see in these directors, writers, and cinematographers, the same core passion for innovation. Many are not only filmmakers but entrepreneurs struggling to find financial backing, and crowdfunding done right can help them break through with enough funds to produce their film," says ICFFF's   Sydney Armani organizer and publisher of CrowdfundBeat.

Many newcomers to crowdfunding don’t know what to do in order to be successful, and the CrowdFunding Film Festival will feature a series of speakers to help filmmakers achieve success, since on average, only 40-50% of filmmakers do gain the necessary financing through crowdfunding. One such speaker based in San Francisco is independent screenplay writer and film producer who has produced over 60 short films, and has published over 50 books with major publishers. She will be speaking on "What It Takes to Succeed and Not Fail in Crowdfunding," drawing on her recent book: "Finding Funds for Your Film or TV Project," published by Hal Leonard, a publisher specializing in entertainment.

Scott, who is the co-chair for the San Francisco branch of the CrowdFunding society will also draw on her experience in creating and promoting her recently launched crowdfunding campaign for a very timely film. Scott will be using examples from the campaign to illustrate what to do and not do to prepare a crowdfunding website and promote it to others to get backing. On festival video showcase, Eckhart Tolle joins filmmaker Barnet Bain to discuss his new project "Milton’s Secret" based on Eckhart’s book by the same name.

Top 100 Crowdfunding Index by www.alexa.com

Top 100 Crowdfunding Index by www.alexa.com

PayPal Frozen Accounts Reveal Crowdfunding Growing Pains

PayPal Frozen Accounts Reveal Crowdfunding Growing Pains

Robert J. Mullins CFB Sr.Staff writer

The controversy over PayPal freezing funds of crowdfunded startups has given the payments processing site a black eye, but a closer look shows it’s just an indication of how existing financial institutions have to adapt to the nascent crowdfunding phenomenon.

PayPal is in the process of reviewing and revising its policies related to accepting funds from donors to projects that use crowdfunding platforms such as Kickstarter, Indiegogo and others to collect funds. When a donor gives money to a startup through those platforms, PayPal processes the payments that go into specific projects.

Payments processing firms like PayPal, which is owned by eBay, are subject to some of the same regulations that companies like Visa and MasterCard have to follow, which are designed to protect consumers. And like so many scams that proliferate on the Internet, sites like PayPal have to be on the lookout for fraud.

Lately, PayPal has frozen some of the accounts of crowdfunded projects because of questions about their validity. According to news reports, companies subject to their funds being frozen include the wearable glasses maker GlassUp, a gaming company call Red Thread Games and an e-mail tools company called Mailpile. Each of them had their funds frozen for a time over the last two months, generating plenty of criticism for PayPal.

In a blog post dated Sept. 11, Tomer Barel, vice president of risk management for PayPal, tried to explain PayPal’s position on the issue and that it is reviewing its policies.

“There are unique regulatory and risk aspects inherent to this new way to raise money from supporters around the world,” Barel wrote. “Because the model is so new, it is potentially open to abuse. PayPal has a responsibility to ensure that the system remains secure, in compliance … and that consumers who contribute to these campaigns understand where their money is going.”

Contacted this week by CrowdFundBeat, a spokeswoman for PayPal said the review is still underway.

Commenters to Barel’s post were not in a charitable mood.

“Perhaps it’s time to get your priorities straight and deal with issues that cause real harm to the community,” wrote one poster. Said another: “The problem … is that you collect tens of thousands of dollars of other people’s money, and THEN decide to just hold onto it. That’s exactly as bad as a completely fraudulent crowdfund.”

But even one of PayPal’s competitors says there are legitimate reasons why PayPal would have concerns. However, Bill Clerico, co-founder and CEO of WePay, said he thinks his company has a better approach to studying certain suspicious transactions and quickly letting the legitimate ones go through.

Payments processors are subject to state, U.S. and international regulations governing such transactions, said Clerico. In addition, these companies are subject to Payment Card Industry (PCI) compliance, an industry group headed by Visa, MasterCard and others.

Clerico understands why PayPal would be suspicious seeing

Bill Clerico, CEO of WePay

a crowdfund site suddenly have its funding skyrocket from zero to $1 million in just a few days and want to put the brakes on.

“Crowdfunding is sort of this new area of payment processing and it’s not really clear how it fits into the existing regulatory framework, and so they are still trying to figure that out,” he said.

Processing systems also have to be on the lookout for fraud, just as the public in general has to be wary of e-mail scams. In the wake of natural disasters like Hurricane Sandy and tragedies like the Boston Marathon bombing, Web scams proliferated online disguised as fundraisers for victims of those calamities. Frauds can exploit crowdfunding sites, too, said Clerico.

WePay offers an open application program interface (API) that crowdfunding platforms can use to set up a simple but secure way of accepting crowdfund payments and verifying their legitimacy. Clerico says WePay has been processing such payments securely for almost two years and that it gets more of its business from crowdfunding than does PayPal. Because a smaller percentage of PayPal’s processing is for crowdfunding sites, it may take it more time to support those payments securely.

WePay is to announce Oct. 21 that it processes $1.5 million in payments per day to crowdfunding platforms such as GoFundMe, CustomMade, Bookfresh and Soldsie.