The RealCrowd Portal is No More

The platform was once one of the largest and most popular in the industry. But in recent years, investor satisfaction plummeted, along with volume. And disappointing decisions to stop showing key due-diligence info and refusing to remove an offering that made impossible claims (and which ended up defrauding investors of millions of dollars)...probably didn't help.

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The RealCrowd crowdfunding portal has been shut down. And the company says it was acquired by a firm called Trinity Investors.

Many years ago (when this site was first launched), RealCrowd was one of the top two largest and most popular platforms with investors.

But in the following years, things deteriorated.

1. Investors complained that volume dropped substantially (until it was virtually nothing by the end).
   

2. Many sponsors stopped providing a full track record in the pitch materials. This made it much slower (at best) or impossible (at worst) for a sophisticated investor to conduct an adequate due diligence on most or all of the RealCrowd deals.
   

3. In 2020, this site alerted RealCrowd that an offering on their site made the impossible claim that investor money was "100% protected from loss." And financial regulators like the SEC, FINRA and others say such claims are an immediate red-flag sign of fraud. But RealCrowd repeatedly refused to fully remove it. After this, RealCrowd was downgraded to a 3 out of 10 and placed it "on probation". And on March 15, 2022, the SEC confirmed that the fund had stolen millions from investors and the fund manager was jailed for fraud.
   

4. Finally, in our last poll, a very large percent of previous RealCrowd investors (33.3%) said they wouldn't recommend Real Crowd to others.

The announcement

Here's the announcement that investors say they received:

RealCrowd Investor, We have some big news to report! RealCrowd is joining the Trinity Investors family as part of a strategic acquisition! We’re excited to roll out more information in the coming weeks, but wanted to make sure you’re the first to know the news!

Who is Trinity Investors? Trinity is a Dallas-based asset manager and private equity investor who has been in operation for over 20 years. From our first conversation, we had a hunch they were going to play an important role in the future of RealCrowd. Trinity’s motto is Hunting Alpha, something they’ve done for over 3,000 of their investors and have delivered an average Net IRR in excess of 24% with an Equity Multiple of over 1.9X in their real estate portfolio since they started in 1999. They’ve returned over $1.25B to their investors and have co-invested over $200M of their own capital in those very same deals. The Trinity Investors team has grown to over 50 professionals who share the Trinity ethos of partnership, trust, alignment with investors, and complete transparency. Be sure to sign up for the webinar below to hear more from their founding team and key principals directly. What does this mean for me? How do I benefit? Put simply: access, transparency and control. Both Trinity and RealCrowd have missions centered around providing investors with access to private investments they would not otherwise be able to participate in. While real estate is a key investment category, Trinity takes RealCrowd’s access even further by including traditional private equity investments in operating companies as part of their business model. For investors, this will mean more options, more diversification, and a broader look at your allocation to alternative investments. Trinity also provides the transparency and control that we know investors seek in private investments. As the asset manager, operator and co-invested Sponsor of their investment activity, they have the ultimate insight into real-time performance of the assets and the transparency of institutional-grade reporting standards. Trinity and RealCrowd have even shared relationships with real estate sponsors that have utilized the RealCrowd Marketplace. Trinity works with a close network of stellar investment managers to provide deal flow that will very closely mirror what you’ve grown accustomed to on RealCrowd. What to expect? First off, we want to make it clear that your current investments that have been made through the RealCrowd Marketplace will remain unchanged; one of the benefits of the direct investment model we’ve always followed at RealCrowd. We have also created an FAQ page that can be found at realcrowd.com/faq . Over the next few weeks expect to hear more about how we will implement the transition and begin the process of joining the Trinity family. We will be sending out regular email communications to our investors and will strive for total transparency throughout the process as we work diligently behind the scenes to provide a seamless transition to our new platform. We will be hosting a webinar on April 20th at 3pm Central Time to introduce all of our Investors to the founders of Trinity, which we will be sending more information about shortly. Be sure to mark your calendars and keep an eye out for the announcement! Also be on the lookout for a personal note from our CEO, Adam Hooper, on the path that RealCrowd has taken over the past decade, what he’s excited about in this next phase of the journey and an invite to connect to learn more about the next stages of this transition. Thank you from the entire RealCrowd Team!

Trinity Investors

I'm not personally familiar with Trinity Investors. So I'll be very interested to see what offerings they come up with. And I hope they choose to be more strict than Real Crowd was about removing blatantly fraudulent sponsors and also including full and complete due diligence documents with the pitch. A few investors have claimed that Trinity Investors typically takes an exceptionally large cut from sponsors (around 7%). At this early point, I don't know if this is accurate or not.

But if it is, then in comparison, the typical crowdfunding platform might charge only 2-3%. So it's possible that the most experienced and best sponsors might not be willing to pay this and will stay away. But, I hope that isn't the case and this won't be a problem with the platform. And we'll see what they truly are about, once they get up and running.