AN INSIGHT ON REAL ESTATE VENTURE CAPITAL

With the global economy recovering from an overwhelming recession brought by the pandemic outbreak, entrepreneurs in almost every industry are excited about what the future holds.

Today, venture capitalists are compelled to function within the parameters of the world’s economy. Everyone must adjust to and comply with what the new markets dictate to be acceptable. Consequently, real estate venture capitalists are now more likely than ever to look for specific conditions before they consider investing their money.

How to Attract Real Estate Venture Capital

Attracting venture capital shouldn’t pose a big problem to real estate investors. Nonetheless, to stand the chance of succeeding, you must understand the present state of the market. The real estate sector hasn’t seen much innovation in the past several decades, but now it appears that this will change in the long run.

With the current state of the market and tech disruption, it isn’t easy for real estate investors to have a sound funding plan. As such, we must temper our expectations, or at least accept what the market is asking in business model terms. Venture capitalists are well aware of this and are looking for start-ups or established companies ready to bunker down and weather the storm. So, do not undermine the little things. Make sure you are accountable for every dollar and know how you can maximize its return on investment.

Ask yourself this question; “how much value am I creating for every dollar I raise?” Get creative with how you go about your business. Leave no stone unturned. Dedicate time to access the systems you have in place and try to improve them. Here, the goal is to refine each operating system until it is predictable and efficient. So, if you are to have any hope of receiving venture capital for your start-up, you need to know or predict the outcome before starting and it is best to have a pilot running smoothly with a few clients.

For no reason, you shouldn’t have a system to attract venture capitalists. Hone your skills and be ready for a potential funder that crosses your path. With a well-elaborated model in place, you won’t go unnoticed. To crown it all, you have to remain disciplined and practice sustainability as a real estate investor. With these, you’ll be able to capture the attention of those that can offer start-up venture capital.

Where Top Venture Capitalists Are Investing in Real Estate and Proptech

Today, most real estate technology start-ups are raising capital and are sealing deals at record levels. A trillion-dollar asset class is just starting to catch up. Over the past few years, real estate investors have been betting on an increasing set of real estate tech (proptech) categories, such as real estate analytics, virtual viewing tech, property and lease management platforms, and more.

Real estate tech has undoubtedly created more value and spawned positive energy than any other single industry sector in venture capital. Companies like Fifth Wall, and Metaprop, are fortunate to make early investments in many transformative businesses like Hippo, Blend, Clutter, Quikr, Loggi, Cadre, Cozy, Lime, Rebny, Rics, Eero, Housecannary, Breather, Modsy, Alpha’a, Aren, and many others. In 2020, the venture capital community invested over $23 billion into real estate technology. Many of these companies are investing in real estate tech because it is becoming one of the largest and most attractive categories of venture capital. With the real estate industry gaining ground in the U.S. and the world at large, almost every major real estate investor or owner now acknowledges that the implementation of new technology is existentially critical to the future of their businesses. This, however, explains the dramatic growth of real estate tech over the past few years.

To put it simply, you can expect a lot of value to be created when the world’s largest industry decides to adopt this technology. And yes, this is just the beginning!

Business model innovation, data accessibility, and the proliferation of mobile, SaaS, and other cloud-native software have already given rise to a cohort of tech unicorns that sit amongst the world’s most influential real estate companies. Emerging technologies and growing capabilities across machine learning, 5G, IoT, and more — coupled with fast-moving regulations and dramatic cost structure changes — have opened up opportunities for the next wave of innovation across a wide set of multi-billion dollar real estate verticals and sub-verticals.

Smart data analytics is giving real estate professionals and investors more insight into the factors impacting property value than ever before. From assessing risks to analyzing evolving trends, we’re now able to anticipate the success of a property more accurately thanks to the abundance of information available to us.

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