RG 227 – The Evolution of Crowdfunding: The Successes & The Failures w/ Matthew Sullivan
Matt has been on the show previously in 2016 on episode 24. Matt is an expat from the UK and is founder and CEO of Quantum RE. He is also the founder of crowdventure.com and cofounder of two real estate funds. He spent time working with Richard Branson at Virgin Corp in the financing team in London where he was director and trustee of Virgin London’s Air Ambulance. He his also the author of a book Roadmap for Entrepreneurs and he has a private helicopter license. Since the last time he was on the show he came across a new real estate asset class with a $18trillion untapped market and it’s the equity in single family homes. This asset class became his business Quantum RE, where he helps home owners unlock home equity without getting into more debt.
Matt says that the Jobs Act has been a resounding success and this isn’t a political opinion, this is because of the amount of capital raised since the changes in regulations; billions have been invested. Regulation 506C enables a person to publicly adverts private placements whereas you used to only be able to discuss these placements with people whom you had a prior relationship. The next big change was regulation A+ which allows you to raise up to $50million each year from an unlimited number of accredited and non accredited investors. Regulation CF was a crowdfunding regulation which allowed these funding sites to pop up. These changes have stimulated capital and democratised investment.
Matt set up Quantum RE 2.5 years ago to enable home owners to unlock large amounts of capital from the equity in their home without having to borrow money. They don’t have to be the home occupier because Matt isn’t going to go on the title or become a co-owner. Matt pays a lump sum in exchange for the appreciation in the property. This is a good option for people who can’t get a traditional loan but have equity in their home. He will invest up to 20% of the value of the home and after the investment the home owner will always be left with 30% or more of the equity in the home.
Top tips
- Most important habit – getting out of the office for a walk in the morning
- Most influential person – Stephen Partridge-Hicks – banker friend
- Most important tool – a book to write things down and checking them off
- Most important failure – saying no when should have said yes
- Contact – quantmre.com