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The Cap Raise, Chapter 1: Introduction

U.S. Companies in multiple industries seek private capital to kindle a startup or fuel growth. Most entrepreneurs are aware of venture capital and angel investors as target sources of funds. Pop culture shows such as Shark Tank and Dragon’s Den, as well as press-earning “unicorn” valuations, have earned ‘Venture Capital’ a spot in layman’s language. Far less understood is the work of investment bankers – particularly those raising capital in the private market.

This blog, “The Cap Raise”, is a collaboration between Cairn Cross of FreshTracks Capital and Diane Abruzzini of Holdings, Inc. We discuss here the differences between raising funding from venture capital firms and raising funding via broker-dealers. We’ll start with some general definitions.

A Venture Capital firm is most often a Limited Partnership (LP), managed by a team of General Partners (GPs). General Partners first obtain committed capital from accredited investors or qualified purchasers – Limited Partners – and use these commitments to form a fund. Each fund usually has a defined lifespan and specific industry or geographical focus. Typically, General Partners have full investment decision-making discretion over their Limited Partner funds, the funds have a defined life (typically 10 years) and investments in portfolio companies are made during the “investment period”, which is usually the first two or three years of the fund’s life. VC fund returns are reliant upon the sale of the fund’s stake in portfolio companies to private equity firms, strategic acquirers, or occasionally via an Initial Public Offering (IPO).

The number of U.S. Venture Capital deals per annum (post the economic recession of 2008) increased from 4,458 in 2009 to a peak of 10,444 deals in 2014 before slipping to 8,637 deals in 2017.  But despite the decrease in the number of VC deals per year fromVC 2014 through 2017, there has been a marked increase in the dollar size of individual deals. This growth, in terms of investment and capital deployment, came alongside a rise of disruptors: technology-enabled companies whose business models cut long-standing, high-profit industries off at the knees.

A broker-dealer is in the business of buying and selling securities on behalf of its customer (as a broker), for its own account (as a dealer), or both. One aspect of a broker-dealer’s business is often the raising of funds for corporate clients in the capital markets–”investment banking.” Broker-dealers are registered with the Financial Industry Regulation Authority (FINRA), and there are currently fewer than 4,000 registered firms in the United States. Investment Bankers are Registered Representatives associated with a broker-dealer, are also licensed by FINRA, and engage in activities around sourcing, vetting, marketing, syndicating and selling securities.

Any firm raising funds for the private sale of an unregistered (non-traded) security must use a broker-dealer, unless the issuer is seeking exemption from registration as a Self-Issuer. “The issuer exemption was meant to provide a safe harbor for employees or directors of the issuer, so that small businesses could raise money more easily and inexpensively. This safe harbor would allow the issuer to avoid registering as a broker-dealer, as they are acting on behalf of their company, not buying and remarketing the securities of a third party”. VC General Partners either use the Issuer Exemption or employ a broker-dealer when they raise funds from their investors. Most, but certainly not all, companies seeking funding directly from VC funds use an Issuer Exemption to do so.

Investment Bankers must pass one or more securities exams that qualify them to engage in certain types of securities transactions. Investment Bankers are also bound to know-your-customer (KYC) standards. They have a responsibility[1] under FINRA Rule 2211 and Regulatory Notice 10-22 to  “have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the [firm] or associated person to ascertain the customer’s investment profile.”

At present, venture capital funds and broker-dealers are rarely considered simultaneously for a specific raise, in part because of historical trends. Prior to the JOBS Act of 2012, employing a broker-dealer was largely cost prohibitive for offerings of less than $25 million. Legacy model broker-dealers charge high fees, but only or primarily based upon success: a business model that works best when applied to large offerings. These “wirehouses” or “bulge bracket firms,” as they are called, were crucial for large offerings to remain compliant and to expand distribution to their representative’s Rolodex of investors.

Post-JOBS Act, securities regulations now enable the investment banking process to move online under the conditions specified by Regulation D, Section 506(c). Like many other industries, technology-enabled disruptors have been able develop efficient ways to distribute smaller offerings at lower fees than legacy model broker-dealers.

Both venture capital funds and broker-dealer offerings are marketed to institutional investors such as pension funds, Registered Investment Advisers (RIAs), and endowments, as well as high net worth individuals. In many cases, VC funds (as with private equity and hedge funds) work with licensed broker-dealers as “third party capital raise” partners, in order to increase the breadth of their distribution.

            This blog series, The Cap Raise, will take a deep dive into a variety of capital raising topics. From corporate structure, to governance, to business stage, to industry, there are a number of factors entrepreneurs and investors should consider before raising or investing in private equity or debt. Have a question? Respond in the comments below to request a blog topic or ask a question.

Cairn Cross co-founded FreshTracks in 2000, and has worked as Managing Partner of the firm since that time. Notable FreshTracks VC investments include SunCommon, Mamava, and Eating Well. Cairn has helped to build a true Vermont entrepreneurial ecosystem by hosting pitch events, accelerator programs, workshops, and teaching at multiple Vermont universities and colleges.

Diane Abruzzini has built her career as a food and agriculture entrepreneur and business consultant. She was a student of Cairn Cross during her time at UVM’s Sustainable Entrepreneurship MBA program. After completing her degree, she spent time working for FreshTracks partners as an analyst. She currently works in marketing and communications at Holdings Inc, whose wholly owned subsidiary Brokerage Services LLC is a FINRA-licensed broker-dealer.

[1] The extent for “fiduciary duty” for broker-dealers is a legal gray area. Even more controversial is the fiduciary duty of registered representatives with respect to retail investors. See

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Limitations of General Solicitation


by Greg Brown, Head of Real Estate

General Solicitation has created a new and exciting avenue to raising capital.  Issuers can now, under the provisions of SEC Rule 506(c), offer private investment opportunities directly to investors without the prerequisite of the issuer having an existing relationship with that investor.  This has enabled issuers and third-party platforms to create portals and websites to attract new, untapped capital.  So, “Build it and they will come,” right?

Wrong.  General solicitation is not magic.  And it cannot make a marginal deal better.

Here are some of the limitations of General Solicitation:

Accredited investors are not likely to surf the web to find your offering. So the premise that building a website and uploading deal documents will alone source the capital you need for your next deal is largely false.  Exposure and ultimately access to investors takes time and money dedicated to education and outreach to investors.  Please remember that this access to investments is very new to most.  Most accredited investors have not had the opportunity to invest in private alternative securities like real estate by way of General Solicitation, or at all.

General solicitation is not magic.  And it cannot make a marginal deal better.

General Solicitation still has plenty of compliance requirements for offerings, regardless if the issuer is using the Issuer Exemption or a broker-dealer.  Communications need to be archived, document version controls need to be in place, and a number of compliance deficits can put both issuers and investors at risk.  Make no mistake, when raising capital using General Solicitation you are selling securities.  And selling securities is a highly regulated activity.

General Solicitation also does not make a marginal deal better.  It is true that expanding your base of investors as an issuer is often a good thing: that generally drives the cost of capital down.  However, what issuers cannot do is hope the internet is full of unsophisticated investors who will invest in a deal that experienced investors would not consider (not to mention the issue of suitability that such an assumption implies).  This attitude tends to be more typical of Issuer Exemption securities rather than those offered through a broker-dealer.

Looking to better understand General Solicitation? Download this free ebook.


An Intro to General Solicitation: Best practices for marketing private securities compliantly under the 506(c) exemption.

Free Download:


Using the Issuer Exemption vs a Broker-Dealer: A Pragmatic View

By Greg Brown, Head of Real Estate, Originally Published by Investor Management Services

I am not a lawyer.  And there are plenty of lawyers that will argue both sides of the question that issuers ask themselves when raising capital for investment real estate:  Do I need a broker-dealer (BD)?

In short, you don’t NEED a broker-dealer to raise private capital.  There are ways to use the Issuer Exemption (detailed ad nauseum here).  And historically speaking, prior to the JOBS Act of 2012, it was usually cost prohibitive to hire a broker-dealer if you were raising less than $25 million.  And clearly there has been plenty of capital raised without one. So, rather than bore you with pages of securities regulations (but found here if you’re into that sort of thing) I want to spell out the business case  for using a BD.


So can you use the Issuer Exemption? There are limitations. In summary (full details here), you likely cannot use the Exemption if:

  • You are a serial issuer, raising capital more than once in a 12 month period.
  • You employ somebody to sell securities/raise the capital as their primary role.
  • You want to pay people commissions to raise money for you.

An obvious red flag is when persons participate in several securities transactions as a serial issuer, especially if these occur within a twelve month time period.  Even if they occur outside the twelve-month time frame, the SEC expects people who continuously participate in securities offerings of different issuers to be registered, which entails being affiliated with a licensed BD.

“When regulators come calling, the burden often falls on the individual to convince regulators as to why they do not need to be registered with a BD.”

While the second and third bullets seem pretty straight forward, the first one is where people can potentially get in trouble.  They (and their attorneys) believe that since most real estate raises are for Single Purpose Entities (SPE) or Special Purpose Vehicles (SPV), that by their very nature they aren’t serial raisers – because that entity only raises capital once.  Convenient, right?

Well, what happens when a principal sponsor of those SPE/SPVs shows up in several real estate raises?  Do we not think regulators are going to potentially look at that? As my friend Scott Andersen ( says “When regulators come calling, the burden often falls on the individual to convince regulators as to why they do not need to be registered with a BD.”  And the penalties for such non-compliant behavior? Small things like: injunctive relief (including that you get shut down), disgorgement (return all ill-gotten gains) and civil penalties.


Many CRE Issuers underestimate everything that goes into making sure a securities offering is compliant.  They usually leave the work for their attorneys. But what if you don’t have a good securities attorney? Do you leave that with your real estate attorney?  The importance of securities law expertise cannot be underestimated, and here is why: if something does go wrong and an offering was found to be non-compliant, you may have very little recourse to your attorney, assuming he does not hold out expertise in securities law as a specialty.  

But with a broker-dealer, quite literally, their licensure is on the line. The broker-dealer of record is responsible for many levels of securities compliance, for due diligence regarding the offering, and for judging the suitability of an investment to particular investors. They have communicated to the marketplace that this offering is compliant.

This vetting is particularly important with what I call ‘professional money’.  Registered Investment Advisors (RIAs), Family Offices, or others with fiduciary responsibility appreciate the gravitas behind a broker-dealer offering and might not be as quick to recommend or invest in an Issuer Exemption offering.  They know broker-dealers have performed Bad Actor checks, Anti Money Laundering (AML), Office of Foreign Asset Control (OFAC), Financial Crimes Enforcement Network (FinCen), and are required to make all the necessary disclosures and filings on both the Federal and State level – in every state the offering is available.

“The JOBS Act is the marriage of the securities and the real estate industries.”


It is frequently argued by non-broker-dealer affiliated platforms that registering with a BD is both unnecessary and expensive.  With the issues laid out above, issuers can decide if using a BD is necessary.

What I can speak to is that it is often NOT cost prohibitive.  By using a BD you send a strong and committed message to investors that your offering is worthy of their attention – you have welcomed the vetting of a BD and offer full transparency into you and your offering.  This is much more valuable than a spot on a non-registered crowdfunding platform.

Scott also said recently in a recent IMS webinar that part of “The JOBS Act is the marriage of the securities and the real estate industries.”  The JOBS Act has disrupted the broker-dealer industry in a way that now makes that value of using a BD available and cost effective to all issuers, including those with multiple real estate offerings.  

Three Things to Know About the Fastest Growing Segment of the US Housing Market: Single Family Homes for Rent

By Laurent Bouzelmat and Diane Abruzzini

In the decade that followed the 2008 recession, multifamily real estate development exploded in popularity. 2018 is the first year since 2011 where the US will see fewer multifamily units built than in the year prior, according to a Yardi Matrix study (summarized here). This was due to a number of factors, from rural-urban migration to loss of consumer confidence in the housing market. Now, in 2018, the supply of new single-family homes has not matched demand; that competition continues to drive single-family home values higher. According to US Census Bureau data, the number of Americans living in all  rentals  has dramatically increased to almost 37%. During that same period, the number of owner-occupied properties decreased.

Marketwatch explains single-family rental investing in an effective way:

“It is like an inflation-adjusting bond with an equity kicker. The rental income less operating expenses generates current distributions – like the coupon on a bond – and rents can be adjusted annually [as most leases are for one year], providing inflation protection.”

  1. Low Supply, High Demand

Today, the number of Americans living in a rental unit is at an all-time high since 1965. A research study by NAREIT shows a 30% annual growth rate in SFR over the past three years – about double that of multifamily –  making it the fastest growing sector of the US housing market. You’ve heard it before: millennials, the largest generation in the US, are not buying housing at the same rates as their predecessors. Student debt, entering the job market during the recession, and loss of confidence in housing markets all drive this trend among young adults. Retirees and empty nesters contribute as well, liquidating their homes in order to downsize and fund retirement.

Developers over the last decade have largely focused on multifamily development. More than half of owner-occupied US housing stock was built before 1980, and the median age of that housing is 37 years old, according to the 2017 American Community Survey. The Wall Street Journal attests that this housing shortage is also due to a “decades long push for young people to go to college”, whereas fewer attend vocational schools and enter such blue collar professions as the construction trades.  The trend toward higher rates of college education has not only attributed to a decrease in skilled construction labor, but has also contributed to increased debt load on the younger generations, restricting their ability to purchase single-family homes. In addition to heavier debt burdens, the cost of housing has been rising at higher rates than wages. In 2017, the S&P CoreLogic Case-Shiller US National Home Price NSA Index rose 6.3%, two times the rate of income growth.

Home construction, specifically for single-family “starter homes” has slowed to nearly the lowest level in 60 years. Multifamily has gained popularity as US residents become increasingly concentrated in urban areas, making land in these areas rise in value. The National Association of Home Builders estimates construction of 900,000 new homes in 2018, which represents only 70% of demand based on population growth. This low supply coupled with increasingly high tenant demand has contributed to the growth of the single family homes for rent asset class over the past decade.

  1. Operating Margin Potential

Fix-and-flip is a process that many Americans are aware of: to purchase an undervalued property, put in some updates, improve curb appeal, and sell, hopefully at a profit. Single family homes for rent (SFR) as an asset class is fairly new and small compared to, say, multifamily, which provides more potential for large scale efficiencies of scale. However, single-family homes, especially detached housing, offer some values not always available in multi-family rentals, including (generally) basement and attic space, garage, personal laundry room and privacy.

Commercial real estate technology advancements have really boomed lately, leading to new types of smart home technology, on-demand maintenance, drone property tours and more. Many of these technologies help SFR managers and fund managers to achieve better operating margins. This creates a dual strategy: fix-and-flip for quick appreciation potential, coupled with improving margins for rental cash flow.

Some innovative commercial real estate technologies to keep an eye on:

  • 3D, interactive and virtual property tours, e.g.. Smarter Listings by EveryScape
  • Virtual reality 3D models for prototyping, e.g. Realnex
  • Automated post-close services, making investor management more efficient, ex Investor Management Services.
  • Automatic rental payments, e.g. Schedule My Rent, Appfolio.
  • The “Ubers” of property management, connecting service providers with properties in need of service, e.g. Servus.
  1. Diversification and Inflation Protection

When an investor places funds in a multifamily unit, the location and infrastructure are crucially important. Local employers and schools, occupancy rates, and access to amenities all affect the value of a multifamily investment. When an investor invests in a fund of single-family homes for rent, there is slightly more diversification. These properties often (but not always) span across multiple geographic regions, vary in proximity to urban locations and large employers, and require differing amounts of updates. While all real estate investments are risky and most are illiquid, SFR funds do offer extra diversification, which can absorb poor performance of certain components of the portfolio.

Unlike many other non-real estate asset classes, SFRs and multifamily rentals are more protected against the risk related to rising interest rates. An increase in rates is often correlated with inflation for ‘useful assets’, which is a category that real estate falls into. There is a strong correlation between rents, interest rates, and inflation. When interest rates rise, an SFR manager can adjust rental rates annually, while experiencing higher appreciation on the asset itself.

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Biotech Investment Opportunity on the Platform

Funding BioEclipseTherapeutics and its cancer immunotherapy

BioEclipse Logo.png

San Francisco, CA | Originally published on PR Newswire.

BioEclipse Therapeutics Inc. (“BioEclipse”) announced today that Brokerage Services has launched marketing for “Revelis BioEclipse SPV, LLC”, a Single Purpose Vehicle that will invest in convertible preferred stock of BioEclipse.

BioEclipse is developing pathbreaking approaches to eradication of solid and liquid tumor cancers, using a proprietary multi-mechanistic immunotherapy. Preclinical studies indicate approximately a thousand-fold increase in cytotoxicity versus preclinical studies of FDA-approved immunotherapies–without evident side effects.

Joe Ventresca, Managing Director of Investment Banking at, declared, “We’re proud to be selected as Placement Agent in this important transaction. continues to bring to market highly innovative approaches in life sciences that hold great promise for human beings.”

Oliver Hopkinson, Co-Founder of Revelis Capital Group, stated, “As founding venture capital investor in BioEclipse, and as Manager of the SPV, we’ll enthusiastically join this funding to help initiate human clinical trials of the CRX-100 cancer therapy. We have full confidence in CEO and co-founder Pamela Contag Ph.D., a successful serial entrepreneur, and her talented team. We hope through our active efforts to turn the promise of BioEclipse into reality.”

Dr. Contag commented: “CRX-100 is only one of many potentially effective combinations within our proprietary platform. Essentially, CRX-100 wraps a cancer-killing virus inside activated immune cells derived from the patient. In animal studies, we are seeing impressive cytotoxicity without measurable side effects. We also expect formation of a long-term cytotoxic response from the patient’s active immune system, ​due ​to lysed cells expressing tumor-specific biomarkers.”  She added, “Our first clinical trial target is ovarian cancer, where patient morbidity is high and therapeutic resistance common. All xenograft models show tumor killing and no observable toxicities, as to ovarian SKOV-3 and UCI 101, prostate and the rare cancers glioblastoma and neuroblastoma. Furthermore, CRX-100 demonstrated excellent tumor-killing capabilities and safety profile, with long-term immune protection from recurrence of the targeted tumor, in these immune-competent mouse models: Non-Hodgkin’s Lymphoma OCI-Ly8 (B-cell), hepatocellular carcinoma, breast 4T1, lung metastatic 4T1-L, and colorectal MC-38.”

BioEclipse Therapeutics Inc. is a venture-stage cancer immunotherapy company, with headquarters in South San Francisco. Brokerage Services, LLC is a fifty-state registered broker-dealer (Member: FINRA, SIPC) that specializes in private market equity and debt transactions using its proprietary general solicitation platform.  Revelis Capital Group, LLC is a family office-related investor in venture capital and private equity, with offices in Colorado.

For further information and risk disclosure (available exclusively to verified accredited investors under the 506(c) exemption), contact Joseph Ventresca,

Disclosure: This release contains “forward-looking statements.” There can be no assurance of their accuracy. For a full disclosure of risks, accredited investors should request the offering circular.

Get In Touch and Mick Law Set the Bar Higher for Private Placement Due Diligence


Boutique investment bank partners with top-tier law firm to increase quality and distribution of private placement investment offerings.

New York, NY and Omaha, NE

mick law Holdings, Inc. and Mick Law P.C, LLO have entered into a partnership agreement to bring greater transparency to company and offering diligence.  In addition, Bryan Mick, President of Mick Law, will join’s Board of Advisors.

Investment banking is a highly regulated industry. Regulations around private placement securities are constantly evolving to create new opportunities but are also becoming increasingly more complex. In part because of regulatory changes, the number of private placement security offerings have significantly increased throughout the past decade, all with differing levels of risk.

“As private companies and partnerships are subject to limited oversight when sharing company information connected to a private securities offering, it’s the role of a licensed broker-dealer to bring the greatest level of transparency.  Brokers have a responsibility to investors and should have a high bar when it comes to evaluation of a private offering,” said Aaron Pollak, CEO of “Well-vetted offerings also need to stand out among the numerous private placements of varying quality. Our investment bankers, financial analysts and lawyers give each of our offerings a high level of scrutiny. Registered Investment Advisors (RIAs) can look to a Mick Law due diligence and underwriting opinion as a seal of certification that the offering has been vetted as to legal compliance and financial structure to the highest standard, no matter the offering size”.

Mick Law is known nationwide as a leading expert in due diligence; RIAs and broker-dealers frequently call on the firm to issue legal opinions regarding securities offerings. Mick Law has established its reputation as an expert in securities offerings, winning Finance Monthly’s Due Diligence Law Firm of the Year Award for three years in a row (2015-2017). This expertise comes from thoughtful inclusion of business professionals among the legal team–as well as real estate underwriters, petroleum engineers, and asset class researchers. issuers will have the option to request a legal opinion from Mick Law. By doing so, issuers open their deal and their principals up to the highest standard of transparency.’s investment platform provides for verification of accredited status, access to all offering documents, suitability and bad actor checks, and management of investor subscription and payments. The due diligence opinion will be an interactive button on the investment’s offering page on the portal, specifically for FINRA-licensed broker-dealers, RIAs, and syndication partners.

“Mick Law legal opinions analyze all material facts about the structure of the investment, economic trends, and prospective asset performance, plus full legal vetting of principals, deal documents, and disclosures.” said Bryan Mick. “This effort by to standardize the most rigorous due diligence efforts goes above and beyond expected fidelity; we hope to see others follow their lead.”

Originally published on PR Newswire.

Get in Touch Reports on First Half of 2018

From our CEO

Our growth through the first half of 2018 brought several new opportunities for our network to access offerings, increase compliance efficiency, and manage investments with technology.

We have significantly increased our team size, including introducing new roles in compliance, investment banking, technology, and marketing.  Because of our dedicated team members, the offerings on our platform continue to increase with regularity. In the first two quarters of 2018, we have already seen 150% growth of the total funds raised on the platform over the aggregated two years prior.

We are excited about our growth and ability to continue to bring vetted offerings through quality technology out to our network.  Whether you’re a broker-dealer, registered rep, advisor, or investor – we strive to source suitable products and to develop the most streamlined process and technology for evaluating and subscribing to private placements.

Commitment to People and Place

As we look back on these past six months, and plot the months ahead, we remind ourselves that our growth and success are due to many factors, both internal and external. People are at the core of everything we do.

As a Vermont-based technology company and investment bank, we are subjected to a competitive labor pool. Yet we are committed to the state of Vermont, Burlington’s growing tech economy, and allowing our employees and their families a quality of life for which Vermont has recently been ranked #1 in the US.  We are proud to build our foundation right here, and it’s an unbeatable place to welcome our clients and partners.

We have opened our second office in Midtown Manhattan, which places us in the heart of the financial economy. We have representatives in New Jersey, and are looking outward towards a West Coast presence as well.

This year, we have welcomed a number of very important clients and partners into our firm.

We have completed our largest white label integration of our TXACT software with Chalice Wealth Partners, an independent RIA and broker-dealer. This project gives their independent reps access to private placements, while increasing distribution for issuers and brokers. has also developed a strategic partnership with Investor Management Services (IMS), a  provider of post-close investor technology solutions such as automated waterfall distributions, specifically for real estate issuers. This partnership helps and IMS issuers and sponsors streamline the investor management process, from pre- to post-close.

Learning is a Lifelong Endeavor

Our company sprang to life after changing regulations enabled a portion of the capital raising process to move online. As we entered this uncharted territory, we have had to adjust and adapt to natural feedback, and continue to grow as a company. We strive to incorporate new features when appropriate, as well as to specialize in areas that our clients help direct us to. Our heightened focus on commercial real estate, as well as private equity investments in the life sciences and technology sectors, are prime examples of this.

We want to thank you for being part of our professional network, we look forward to hearing from you as we strive to develop the ecosystem to seamlessly and securely show, find, and complete private placement investments.


Aaron Pollak

Top Trends

The industry stand-out this year is commercial real estate (CRE). CRE offerings have only made up 8% of our offerings and 2% of total capital raised thus far. However, our newly minted Head of Real Estate, Greg Brown, as well as our partnership with NAI Dileo Bram have positioned CRE as the fastest growing industry on the platform.


Private Offerings sold through by Industry, by number of offerings. All offerings have been sold by Brokerage Services, LLC.

Top Trends of 2018:

  1. Growing number of commercial real estate offerings
  2. RIA partnerships have expanded our distribution network
  3. Enhanced electronic signature capabilitiesEsigheader

“The newly enhanced eSignature feature solves the pain point of having to email multiple parties (often many times each) to sign, scan, upload and re-send these documents. Our solution prioritizes security for all parties, and enables issuers to countersign and appropriately store documents”.                                                Christa Ferrari, Chief of Solutions

Growing Team

GregGreyBackgroundHeadshotsGreg Brown has taken the lead in’s Real Estate sector. Through Greg’sexperience, we have been able to onboard a number of new CRE offerings. His weathered perspective has contributed valuable informational resources to the blog, helping issuers and investors understand the many nuances around CRE investments. 


Joe Ventresca has more than 20 years of experience in investment banking and financial services. A previous partner to in his role as founding partner at Asgard, Joe will now be working with our team directly as Managing Director of Investment Banking.


Diane Abruzzini has worked as an entrepreneur, consultant, and analyst with food and agriculture businesses as well as nonprofits. Since joining the team, she has been building out the firm’s marketing and communications programs. News Stories 

  1. RIA Biz Profiles Chalice’s Growing Success with Partnership
  2. Press Release Announcing Chalice and Partnership
  3. Press Release Announcing IMS and Partnership

New Private Placements on the Platform


Cambrian Rise
Opportunity to invest in one phase of a sustainable, mixed-use, multifamily community on the Burlington, Vermont waterfront.


BioEclipse Therapeutics, Inc.
(“BioEclipse” or “OpCo”) is a biotech company pursuing powerful, highly targeted immunotherapy strategies to attack and potentially cure certain types of cancer.


5003 Industrial Road, Wall, NJ
From our partners at NAI Dileo Bram, this industrial commercial property in Wall, New Jersey has housed a single tenant for more than 30 years.

Best Read Blogs

  1. Why do Deal Sponsors Charge Fees? by Greg Brown, Head of Real Estate
  2. Pitfalls of the Issuer Exemption, by Andy Szabo, Chief Compliance Officer
  3. How to Exceed Investor Expectations, BLOG SWAP by IMS
Forward-Looking Statements
This content may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of said safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “seek,” “strive,” “try,” or future or conditional verbs such as “could,” “may,” “should,” “will,” “would,” or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Except as required by applicable law or regulation, undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
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The Illiquidity Issue

by Greg Brown, Head of Real Estate

Investopedia defines illiquid as such, “the state of a security or other asset that cannot easily be sold or exchanged for cash without a substantial loss in value”.

Please understand, before investing in private real estate deals, that they are indeed illiquid. Let’s talk about how this fundamental characteristic of private real estate equity investments should impact your decision making process.

First–be able to do without the money you’re considering investing for AT LEAST the duration of the projected hold period. In most offerings, the deal sponsor will project a hold period for the asset. That could be as short as a projected 18 months for a turnaround or flip deal. Or it could be as long as ten years. You need to assume the investment cannot be liquidated into cash in a timely manner during your investment period. Caveat: some well capitalized deal sponsors will include provisions for them to buy back your investment should you need to liquidate. However, that buyback is usually at a very significant discount and not an obligation on the sponsor.

Deal sponsors are well aware they are asking investors to commit their capital with the inability to get it back. And for that, investors are usually able to command higher returns.

Second–read the offering documentation thoroughly to ensure you understand any restrictions on resale of your investment. Some deal sponsors restrict your ability to transfer your ownership interests to a third party. Most deal sponsors will allow for you to transfer your interests but withhold the right to approve to whom you are selling to. This protects deal sponsors and the other investors from your selling to bad actors like terrorists or money launderers.

Third–illiquid is not all bad. There is almost always a risk premium in total return projected for illiquid assets. Deal sponsors are well aware they are asking investors to commit their capital with the inability to get it back. And for that, investors are usually able to command higher returns. This premium is a big factor in why private real estate deals offer higher projected returns than publicly traded equities, even publicly traded REITs.  But, of course, the risk premium is a projected higher rate of return, not a guarantee of such results.

Lastly, I will say there are platforms out there chasing the goal of being efficient exchanges or marketplaces for private securities, many focusing on real estate. This is a noble goal. But we are YEARS away from there being the depth and breadth of both product and capital necessary to create highly liquid auction marketplaces for “alternative” investments like real estate.  

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Newly enhanced digital signatures added to the platform

We are pleased to show you our newest software feature: enhanced eSignatures. This new development adds efficiencies for investors, brokers, and advisors to execute documents. The eSignatures are compliant with USIGN and UETA laws granting eSignatures the same legal status as written signatures.*

New features include:

  • 100% in-app completion of subscription and placing funds

  • Auto-populated subscription agreement is customized to your template

  • In-app countersigning for issuers, advisors, and brokers

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The Assumptions In Real Estate Investment Modeling

by Greg Brown, Head of Real Estate

Assumptions are a necessary evil of projecting and attempting to predict the performance of real estate investments. If anybody had the ability to predict the future, they wouldn’t be in real estate….they would BE real estate. And not reading this piece.

When evaluating an investment it is important to understand where the income/revenue comes from. Not just what is contracted for today or at the time of investment, but where it is coming from in the future. This is where things can get tricky because many leases can be for five years or longer. Again, predicting or projecting what will happen beyond five years is still more of an art than a science.

Below are assumption characteristics of which to be mindful:

  1. Make sure returns are not dependent on overly aggressive future assumptions.

Is the deal sponsor projecting they will be able to lease space for two times current rent when the current tenant(s) vacate? Are they projecting that the asset will be worth 50% more in three years? Remember the assumed Internal Rate of Return (IRR) is NOT the same as annual cash flow. Do not assume that if a deal is predicting a 20% IRR that you’ll be receiving annual checks for 20% of your investment.

  1. Understand the sources of revenue.

Most projections include revenue from two places: cash flow and proceeds from sale. If you are looking for a stable cash flow investment, make sure the investment return projections are not heavily dependent on exit proceeds.

  1. Understand how many different assumptions are going into the model.

Below are some assumption examples:

  • Lease renewal probabilities of existing tenants: what is the likelihood a tenant will stay and at what rental rates?
  • Lease-up probabilities for new developments: how long is the sponsor projecting for a deal to reach projected occupancy hurdles? And at what rental rates relative to the market?
  • Exit sale assumptions/appreciation: most models project a hold period, and during this time it is likely assumed that the asset will go up in value. If the sponsor is projecting the asset to appreciate significantly over the hold period, there needs to be well-founded reasons for that projection.

Broker-dealer issued securities must be transparent regarding all of the assumptions included in a projection model. However, it is still the duty of the investor and (and the investor’s advisors) to understand the impact of the assumptions in order to identify opportunities, understand the risks, and mitigate them.  

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