One of the things I am waiting for, and I hope I don’t have to wait too long, is for the fledgling CRE tech space to attract its own group of Angel investors, similar to the way both Silicon Valley and Silicon Alley have in consumer tech, big tech, clean tech, energy and so on. Think Andreessen Horowitz, Google Ventures and Greylock Partners in Silicon Valley and First Round Capital, Bessemer Venture Partners and Union Square Ventures in New York. Granted, tech in CRE is only now starting to get some traction, and there obviously haven’t been many, if any, big exits yet. Personally, I am still somewhat bewildered by the lack of interest among industry professionals in helping get this sector off the ground.
I have been fortunate to have a pretty good network of real estate professionals, having built my own PR firm largely by servicing this sector as our niche. Therefore, when I went out to raise money for my new site, The News Funnel, my network was there to support me (even though most had no clue what they were investing in :) ). Of my first round, 90 percent of my investors were real estate professionals from across the country and from all sectors. Several of my investors have invested in other sites, like my friends Scott Landis, Steve Siegel, Jon Schultz and Jeremy Neuer.
And, of course, I have seen a few other individuals invest in some of the CRE tech startups, most notably Jared Kushner. But, why so few? Perhaps no other industry has created as much wealth as the real estate sector. In virtually every city or market, if you go to find out who the wealthiest folks in that community are, a great majority will undoubtedly have made their money in real estate.
So, where are they and why aren’t they investing more? I know it’s most likely because tech is so foreign to most of them and there just hasn’t been a lot of attention paid to the subject as of yet. A great many real estate professionals who I know put most of their money back into their business and doing more deals. I get it. But, for the industry as a whole to truly evolve into the 21st century, it needs leaders who have the vision to step out of their comfort zones and take the risk of supporting this new and incredibly exciting frontier.
For this sector to truly take off and create a vibrant ecosystem, we need these individuals to invest, incubate, mentor, etc. the startup community. There are so many amazing new sites and innovations taking place today, that it’s really an incredibly opportune time to get engaged and invest.
While there is a great deal of institutional and VC investment taking place, for the CRE tech space to really gain traction, it will take those from within the sector to begin to take ownership of it, both literally and figuratively.