Introduction
I was on the CrowdWise website and came across the top 10 Investment Crowdfunding portals by amount raised in 2020 and number 10 on the list was one of the only Black woman-owned portals Buy The Block. This statistic jumped out at me for another reason. It was the only Regulation Crowdfunding portal that was not venture funded. Black women face significant challenges in raising venture capital. They represent 42% of net new women-owned businesses, according to the American Express 2019 State of Women-Owned Businesses.* That’s three times their share of the female population (14%). Yet, they receive less than 0.5% of venture capital. This facet alone made Buy the Blocks accomplishment even more remarkable, but there is more.
Black Girl Magic Personified
Linda P Smith has been a real estate investor for over 20 years and she has seen the ups and downs of the business, so when she had the opportunity to create Buy the Block she jumped at the opportunity to provide a platform for her community to benefit from real estate investment. She was able to raise $110 thousand using rewards crowdfunding on BBNOMiCS another crowdfunding asset that she created to fund Buy the Block. Linda has also built an enormous social media following with her Buy Black Economics Facebook, Twitter, and Instagram with over 750,000 followers.
Why Real Estate Investment
Over the last 2 centuries, 9 out of 10 millionaires have been created through real estate investment. Real estate crowdfunding is an innovative way to increase the number of people that have the opportunity for inclusive real estate investment. Real estate crowdfunding is a type of Title III investment crowdfunding that allows non-accredited investors. It has the potential to create community-led economic development where communities and individuals can have an actual stake in their built-environment. We’ve known that real estate has made scores of people wealthy for generations and innovation is a key to unlock the gates to wealth for the Black community..
FinTech Meets Real Estate
Real estate crowdfunding has created a disruptive revolution in early-stage finance and is changing the way inner-city African-American communities relate to capital formation, real estate development, entrepreneurship, and job creation. Thanks to the passage of the JOBS Act of 2012, a new market is being created that will revolutionize how early-stage investing and community economic development works — It’s called Crowdfunding! Buy the Block has demonstrated its ability to facilitate these deals on a large scale. Since its inception developers have raised over $1.5 million on the platform. By offering good deal flow to a large and emerging group of Black retail investors, Buy the Block is on the cutting-edge of wealth-building through real estate development in the inner-city.
Buy The Blocks Unique Focus
May 16th, 2016 the rulings on crowdfunding intermediaries went into effect and today ordinary Americans (non-accredited investors) are able to collaborate in mass to invest small amounts of capital to fund startups, small businesses, and real estate developments online through investment crowdfunding, and become shareholders in the process. Linda P Smith being a visionary entrepreneur saw the value of investment crowdfunding in its infancy and raised $110,000 on her rewards crowdfunding platform BBNOMICS to build Buy the Block. Her vision was to create a real estate investment crowdfunding portal focused on non-accredited African American investors to help change the dynamic of investment, wealth, and the Black community. Investment crowdfunding has the power to change how African-Americans from all income levels make decisions about where to put their money and how to spend that money.
Key Takeaways
Buy The Block has ushered in a new era and a radical transformation forever redefining what it means for African-Americans to be a crowd investor in America. Buy the Block brings local crowdfunding into the homes of inner-city community members in the Internet Age. If African-Americans embrace the power of investment crowdfunding then the most socially transformative part of investment crowdfunding will come from the power of community-led investing. Using investment crowdfunding as the capital source combined with the research from prominent economists, sociologists, and other researchers find that small, local businesses are critical to overcoming many of the Black community’s challenges, from reducing economic inequality to building resilient communities. According to the Kauffman Foundation, new businesses account for nearly all net new job creation and almost 20 percent of gross job creation. Investment crowdfunding has the potential to transform investors into customers thereby solving the issue of buying Black by investing Black. Investment crowdfunding has the potential to generate wealth for both the investors and the developers/business owners in the African American community.