With growth in angel investing among a larger percentage of accredited investors, one of the biggest worries is that a lack of liquidity will cause many non-experienced investors to lose more money than they expect. This concern is amplified due to the emergence of crowdfunding platforms that now provide easier access for both accredited and non-accredited investors to participate in real estate deals, P2P lending and equity crowdfunding.
Nonetheless, solutions appear to be around the corner, and some having arrived already. Launched last year was a quarterly secondary market by CircleUp for shares sold on their platform.
Continuing this trend is CFX Markets which has launched a secondary market for crowdfunding assets. The market opens with initial participation of two dozen real estate crowdfunding sites, including PeerRealty, PropertyStake and CrowdFranchise. Members of those sites will now be able to list assets they have purchased on CFX Markets for sale.
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In regard to being a launch partner, Jordan Fishfeld, PeerRealty CEO stated: “There are a lot of real estate crowdfunding platforms in the market, but being able to give PeerRealty investors the ability to exit their positions if need be will make our investment offerings more appealing.”
Commenting on the process, Daniel Kelly, Head of Operations at CFX Markets, explained to Finance Magnates that customers create an account with CFX Markets. Upon being authenticated and verified with the platform’s partners, eligible investment assets are connected to the users CFX Markets account and can be listed on the exchange.
Similar to other exchanges, CFX Markets will provide historical pricing of assets that have been listed for reference for ongoing deals. According to Kelly, assets are able to sell assets “subject to SEC resale restrictions” which he stated “generally require a 1-year waiting period”.
Currently, CFX Markets is only being integrated with US based crowdfunding platforms. However, Kelly stated that international investors are welcome to open accounts and purchase shares on the platform.