Earlier this month, Crowdfund Insider reported on NextSeed’s first Reg D offering for a real estate investment.
NextSeed started life as a platform acting as a bank replacement. Small businesses could raise debt capital, first under the Texas intrastate exemption (no longer in use) and then under Reg CF.
Reg CF is notoriously difficult to scale and turn into a profitable business thus NextSeed has been expanding its portfolio of offerings and securities exemptions available to issuers.
The first Reg real estate investment, “ARRIVE Albuquerque” is only available to accredited investors.
Earlier this week, NextSeed made an additional announcement sharing that ARRIVE Alburquerque will also be the platforms first offering where NextSeed has a significant stake in the game.
According to NextSeed CEO Youngro Lee:
“ARRIVE Albuquerque is not only the very first commercial real estate offering that we felt comfortable offering to our members, but it is also the first project where NextSeed is also a member of the sponsor group. Specifically, we formed a separate unit of NextSeed that focus[es] on direct private investments, and we partnered with the ARRIVE Hotel Group and other individuals with proven track records in successful real estate development to work on this project. I am personally involved in this project, as I will be acting as the President of Arrive ABQ GP LLC, the Manager of Arrive ABQ Community Fund LLC and all other related investment vehicles for the ARRIVE Albuquerque project.”
Since NextSeed will be the LLC manager, the platform will have skin in the game and interests are better aligned. Investors know that NextSeed will do all it can do to generate a positive return on the investment.
This move by NextSeed is something that is not available under Reg CF. There is a push to enabler special purpose vehicles (SPVs) and for platforms to take a “carry” similar to VCs, but, at least for now, Reg D is a better option for platforms that want to invest alongside smaller investors.
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