Jilliene Helman changed the entire real estate landscape when she founded RealtyMogul.com with her co-founder Justin Hughes in 2013. Today, the company is a thriving platform boasting the leading online, crowdfunding destination within the real estate industry. We sat down with Helman, to uncover the strategies she utilized in making her business one with prominent name recognition, a growing user base as well as one that has attained large overall success.
How were you able to determine that RealtyMogul.com satisfied a real need? Enough that it would be able to grow into a successful business?
After graduating from undergraduate business school, I went into banking and had the opportunity to get exposure to many different aspects of the banking world, including wealth management, finance and strategy. One of the clear trends from my banking days is that many of the wealthy clients we were servicing in wealth management made their money in real estate.
When the JOBS Act passed in April 2012, I knew that the time was right to develop a platform for individual investors to access the real estate markets online. In 2013, RealtyMogul.com was born.
Which funding strategies have you employed in growing the company and which have been the most successful?
Generally, I’ve always tried to find investors that not only have capital, but can also bring value to the table, whether it’s in technology, real estate, or FinTech.
When we started the company we raised money from friends and family and a few strategic partners. After we launched the platform and gained momentum, we raised a Series A, led Canaan Partners, which was a great strategic partner for us with their experience investing in Lending Club and understanding FinTech. Following our Series A, we raised a $35 million Series B a year ago led by Rob Rueckert at Sorenson Capital, who brings a lot of great technology experience to the table.
What elements of RealtyMogul.com allow it to compete with more “traditional” options and how did you make use of these differences in promoting the company?
Our core purpose here at RealtyMogul.com is “Access through Innovation,” and our value proposition to both sides of the market is built upon that core purpose. What allows us to compete is innovation – we leverage technology, big data, and changes in regulation to do things differently and simplify real estate investing.
Our online platform connects borrowers and sponsors to retail and institutional investors to facilitate equity and debt transactions. For these sponsors and borrowers that are seeking to raise capital, we’re a one-stop shop for commercial real estate financing by allowing them access to a network of institutional and retail investors they couldn’t reach before, while saving them time and resources since we handle all ongoing operating and tax reporting, distributions, and relationships. We operate as a fast, efficient, and transparent platform, all while being able to offer competitive pricing due to our cost structure.
Investors use our platform to gain access to real estate investments nationwide – which in turn can help diversify their investment portfolio. We also save them time and resources that are generally involved with real estate investing because we offer convenient online presentations of full due diligence packages.
How has the crowdfunding aspect of RealtyMogul.com been utilized to help the company grow in terms of marketing and gaining visibility?
The concept of a shared economy, and cutting the middlemen is getting a lot of attention across various industries in the last few years, and investing is no different. Crowdfunding real estate definitely has a lot of interest and people are excited about it. They’re looking to diversify into real estate and so there has been a lot of adoption.
Was there a breakthrough moment in getting RealtyMogul.com off the ground? What was it and why did it work?
RealtyMogul.com launched with a single mission: to simplify real estate investing by connecting real estate entrepreneurs and investors through cutting-edge technology.
I realized several years ago that the highest net-worth clients had made their money in real estate, but it’s a hard asset class to get into in a simple way. The passage of the JOBS Act was a real moment of inspiration. My cofounder, Justin, and I wanted to seize on this mix of regulatory opportunity and advancing technology to make the real estate market more accessible to more people.
What pushback was there in bringing your company into the mainstream and how did you overcome this?
Change is always difficult, and there’s always resistance. The real estate investment market hasn’t seen much innovation in the last few decades, so there was and still is definitely pushback from both entrepreneurs and investors, who are used to operating in a very specific, primarily offline manner. The way we are overcoming that pushback is by building an excellent online user experience, continuously adding new features and functionality and looking to protect our investors at every turn.
Who is your initial targeted demographic and how do you go about reaching them?
Our first investors were ones that were very tech savvy and felt comfortable investing completely online, while doing their own research using the due diligence tools we provide them. But we’ve come a long way since, and today, it’s really mixed - we have over 80,000 members and they range from 24 to 80-years old. We attract a lot of self-employed, retired, and individuals in the tech and/or financial services sector. We have investors that bring a ton of real estate investing experience to the table, as well as ones that invest for the first time on our platform. It’s a very diverse investor base.
Are there new innovations we can expect to see in the near future from RealtyMogul.com?
We are always looking for new ways to bring value to our investors, and always looking towards our next offering. The recent regulatory developments have opened the doors to more opportunities so we’re exploring that avenue.
What do you know now about growing your business that you wish you knew when you were first starting out?
It’s ok to be patient. Building category defining companies take a very long time and a lot of sweat and tears.