Groundfloor, a real estate crowdfunding startup has closed its first round of funding led by investors Bandwidth Labs and the American Underground. The company connects independent real estate entrepreneurs with early-stage loans funded online by mass-market savers and investors. The seed capital will allow Groundfloor to bring a series of pilot projects to market in late 2013 and early 2014.
“The Web has a message for Wall Street,” says Brian Dally, Co-Founder and CEO of GROUNDFLOOR. “Real estate innovators and doers frustrated with the bank underwriting status quo are ready to be unleashed. Banding together, depositors and self-directed investors can do everything traditional lenders do, but better—to the benefit of a broader base of people well beyond accredited investors and powerful incumbent financial institutions.”
Groundfloor was Co-founded by Dally and Nick Bhargava who share a common interest in commercializing radical technologies designed to disrupt entrenched incumbents. John Austin introduced the duo in October 2012 through NC IDEA’s Groundwork Labs. Dally, a 15-year veteran of technology startups based in Silicon Valley, Boston and London, most recently engineered the launch of Bandwidth.com’s Republic Wireless, a provider that successfully battled the big four cellphone carriers to enter the smartphone service market. Bhargava lends expertise in securities law innovation earned during his role in developing Title III of the JOBS Act, in which he fought to ease securities regulations for unaccredited investors and bring the concept of equity crowdfunding to the mainstream.
The company also announces the addition of new advisory board members including Michael Goodmon, Vice President of Real Estate for Capitol Broadcasting; Jason Widen, a real estate developer and Executive Director and Co-Founder of HQ Raleigh; and Chris Matton, a prominent figure in the Triangle angel investor community and General Counsel at Bandwidth.com.
“Bandwidth has a culture of taking on big challenges and supporting people we believe in,” says Scott Barstow, Head of Bandwidth Labs. “GROUNDFLOOR is a huge idea and we are proud to back Brian and his team, as well as creating opportunities for entrepreneurship to grow here in the North Carolina Triangle.”