Commonly Asked Questions
About Real Estate Crowdfunding.
What is MassVenture?
MassVenture is an online investment platform for investors to invest in real estate, often referred to as a crowdfunding platform.
MassVenture gives investors the ability to:
- Browse investment offerings based on investment preferences including location, asset type, risk and return profile;
- Transact entirely online, including digital legal documentation, and funds transfer;
- Manage and track investments easily through an online portfolio; receive automated distributions and/or interest payments, and regular financial reporting
The MassVenture platform allows you to obtain a beneficial interest in one or more real properties by buying Shares in holding company.
Will MassVenture Operate in states other than Texas?
MassVenture plans to operate in all 50 states in the future. If you are not a Texas resident but interested in investing on MassVenture, or you’re interested in raising capital, please feel free to email us at [email protected]
What are the benefits of using MassVenture.com?
MassVenture.com makes it easy for non-accredited and accredited investors to invest in real estate
We provide access that was historically limited investment in the marketplace. We spend countless hours sourcing real estate investments so you don’t have to. We also allow you to invest in real estate with dramatically smaller check sizes. Instead of $50,000 or $100,000 minimums, you can buy shares of investments with as little as $500. And we make the process frictionless – allowing you to screen investments online, sign legal documents online, and have access to all your documents in one place on your investor dashboard.
How is MassVenture regulated?
www.MassVenture.com is operated by MassVenture Inc, a Texas Crowdfunding portal registered with the Texas State Securities Board, for the purpose of offering and selling securities to the residents of the State of Texas in accordance with the exemption from securities requirements contained in Rule 139.25 promulgated by the Texas State securities registration and Rule 147 promulgated by the United States Securities and Exchange Commission.
MassVenture does not provide any investment advice or recommendation and does not provide any legal or tax advice with respect to any securities. Any target terms or financial projections on this site are illustrative examples only and may not reflect actual performance. are being offered by, and all information included on this site is the responsibility of, the applicable issuer of such securities.
ACCESS TO SECURITIES OFFERINGS ON THIS SITE IS LIMITED TO TEXAS RESIDENTS AND OFFERS AND SALES OF THE SECURITIES APPEARING ON THIS SITE ARE LIMITED TO PERSONS THAT ARE TEXAS RESIDENTS.
Is MassVenture.com secure?
MassVenture.com is committed to protecting the privacy and confidentiality of information. This includes but is not limited to physical and electronic procedures to protect information from loss, misuse, damage or modification by unauthorized access. Some of the central features of our security program are:
- Internal and external review of our public and non-public Internet sites and services;
- The use of specialized technologies such as firewalls and encryption;
- Rigorous multi-stage testing of the operability of products and features before they are exposed to the Internet as well as updates for known vulnerabilities;
- Monitoring of our systems infrastructure to detect weaknesses and potential intrusions.
How can I contact with MassVenture?
You would be able to get in touch with MassVenture by:
- Email [email protected]
- Phone +1 512-815-3075 Monday – Friday 9:00am to 5:00pm (CST)
- Twitter @massventure
- Facebook www.facebook.com/massventure
How does MassVenture work for investors?
There are two types of investors on MassVenture – Texas-based self-accredited investors and non-accredited investors. After registering to be an investor, you complete a simple form to indicate that you meet the requirements of Texas residency (via a Texas driver’s license verification) and, if applicable, accredited investor status verification. Upon certifying that you meet these guidelines, you will have access to full project profiles on MassVenture.
Who can invest in a project on MassVenture?
Now All Texans irrespective of income level can invest in a project on MassVenture.
Does MassVenture set up an escrow account?
MassVenture has partnered with an escrow service provider to ensure that investor funds are securely held in escrow until the developer’s minimum funding goal is met.
How do investors earn returns?
MassVenture screens real estate investment projects prior to listing them on the portal marketplace. The process includes background checks on the company and control persons offering the investment as well as a review of financials, return projections and other relevant criteria.
Once a project is listed, investors will have access to detailed information including financials, property information and photos/videos, legal and financial documents and company bios. Each investment has a target funding amount that must be met and investors who opt in for a specific investment will have their desired investment commitment held until the funding round has successfully closed. If the target funding amount is not met, a member’s investment allocation will be returned.
The MassVenture platform allows members to review and execute all applicable legal and investor documents online prior to transferring funds to escrow. Please note that MassVenture does not have discretion on how member funds are utilized by any given developer. Also, MassVenture does not guarantee the performance of any investment project listed on the marketplace.
How does the investment process work?
Investors who invest in an equity opportunity will receive periodic payments of cash flow from rents and/or a share of the proceeds when a property is eventually sold. Payments shall be deposited directly into a member’s MassVenture Investor Account managed by CrowdPay.
Is there a minimum/maximum investment amount?
Texas-based residents can invest in MassVenture offerings for as little as $500. Current state rules restrict non-accredited investors to a maximum investment of $5,000 per project. For accredited investors, there is no maximum limit and as such members can choose to invest as little as $500 or all the way up to the full target funding amount, depending on the criteria set forth by the issuer.
Do investor have to pay fees to invest?
No, There is no direct fees changed to the investor.
What kind of updates will I get about my investment?
Developers are responsible for communicating updates and project progress with their investors via the MassVenture marketplace. Additionally, developers will provide investors with the requisite tax documents for each calendar year in which they have a distribution from an investment.
Are these Investments liquid? When will I get my investment back?
Private real estate investments of the type listed on MassVenture are not traded on a public market and therefore ownership in these investments cannot be easily traded or sold. Each project may have a unique projected “hold period”. The hold period is the expected time investors will be involved with the project until it is sold. Please note that a “hold period” is an estimate and may differ from the actual hold period for an investment, which may range from less than 6 months to greater than 5 years. For additional information regarding the hold period of a specific project, please review the details provided by the developer.
How do you keep my personal information secure?
In order to protect personal information, MassVenture uses 128-bit encryption. Additionally, banking data is never stored on the portal servers and information is protected both in-transit and at rest.
Where are the funds transferred through MassVenture deposited?
All funds for an investment are deposited into a MassVenture partner FDIC-insured bank account. Funds are then transferred into the bank’s escrow account until the target funding amount is reached, after which funds are transferred for the sole purpose of the select investment. If the target funding amount is not met, 100% of invested funds are returned to the investor.
Is my investment guaranteed?
All investments made in projects listed on MassVenture are in no way guaranteed to generate a return or preserve investment capital. Real estate projects are not guaranteed to produce quick profits, provide liquidity, or guarantee a high return, and it is possible to lose an investment. It is important that investors understand these risks as MassVenture does not assume responsibility for any investments made. It is recommended that investors conduct their own due diligence before deciding to invest in a project.
What happens after I invest in a project on MassVenture?
Investments will be registered as part of the project’s fundraising efforts on MassVenture. The project developer will be responsible for communicating the project’s growth and development with you, which occur via updates on MassVenture or through other arrangements. We encourage developers to check in with their investors on a regular basis (monthly or quarterly).
What if the minimum funding goal is not met?
The developer sets up an escrow account with MassVenture, but funds will not be disbursed until a project reaches the minimum funding goal and by a particular date, both set by the developer. If the minimum funding goal is not reached within the allotted time period, the investments will be returned to all investors. MassVenture does not assume liability for any developer’s failure to attain the minimum required funding threshold for a project.
What does MassVenture do for me, and what am I responsible for?
MassVenture is responsible for:
- Verifying the identity of a developer with a listing on MassVenture
- Screening projects on the MassVenture platform
- Requiring developers to complete all sections of their profiles
- Verifying investor residency and accreditation status at the time of investment
As an individual investor on MassVenture, you are responsible for:
- Performing your own due diligence on the project
- Verifying residency and accreditation status
- Communicating with developers
I am an accredited investor. Which investments are available to me?
As an accredited investor, you may invest in any of MassVenture’s current offerings and there are no limits on the amount you may invest in select ventures. By Texas state securities rules, non-accredited investors are limited to a $5,000 max on investments.
When can I expect a return on my investment and how will it be distributed?
Projected returns and distributions, as well as a timetable for milestones and a distribution schedule, are specific to each offering and, when available, are noted in the offering documents for that investment.
What are the terms of a MassVenture investment?
The terms of each investment on the MassVenture marketplace are specific to that offering. Prospective investors should review in detail the offering documents provided for each investment opportunity.
What documents will I receive as an investor?
MassVenture investors may track investments in their portfolio, where they will find all the relevant deal documents, as well as receive periodic project updates, distribution notices, and tax documents.
What happens if there is more investment interest in a project than the funding needed?
All of the MassVenture marketplace offerings are funded on a first-come, first-served basis. Once an investment goal is reached, the offering is closed.
Why do you need my Texas driver’s license number, Social Security number and Date of Birth?
Shares sold through the MassVenture marketplace are a real investment in a real business. Texas’ new intrastate crowdfunding rules require that all investors investing in Texas-based real estate ventures be verified as Texas residents, hence the need for a Texas Driver’s License (TDL) number. Likewise, all income must be reported to the IRS. As a result, your social security number (SSN) and date of birth (DOB) must be submitted. MassVenture investors will be sent a year-end tax form by the project issuers.
How is MassVenture different than a Real Estate Investment Trust (REIT)?
MassVenture allows Texas-based investors to choose how, when, where and in what type of project or group of projects to invest their money in. A traditional REIT only allows investments into pools of capital that are limited by asset class or geography. REITs charge investors high fees (sometimes upwards of 15% of invested capital) and because they are publicly traded, REITs are also prone to stock market volatility.
Can I invest if I am a non-Texas resident?
Currently No. Current state crowdfunding rules restrict the ability of non-Texas residents to invest in ventures.
We are working on developing national platform.
What is a Self-Directed IRA?
A self-directed IRA allows the IRA owner to choose where and how their funds are invested, as opposed to a retirement plan administrator. Self-directed IRAs are common vehicles for alternative investments in privately offered stocks and equities, and real-estate. A key requirement for a self-directed IRA is that a fair market value must be able to be obtained by the IRA custodian, with certain exceptions for life insurance, art and other collectibles.
Most investors seeking to diversify a portion of their IRA portfolio with alternative investments will fund a self-directed IRA by rolling over a 401(k) from a previous employer or by transferring a dormant IRA from another firm.
The Wall Street Journal covered self-directed IRAs in its article: IRAs Get Sexier
Owning alternative assets in an IRA is easy to do if the custodian you choose specializes in holding the asset you’re interested in. Because different self-directed IRA custodians will accept different types of investments, the key is to find the right company to help you with the process. MassVenture currently partners with Goldstar Trust Company to provide crowdfunding IRAs for investors. If you have a self-directed IRA with another custodian, get in touch and our team will set up a call with your custodian help determine whether your self-directed IRA can be used directly on MassVenture.
How does MassVenture screen investments?
Before placing investment opportunities on the marketplace, the MassVenture team reviews various aspects of the proposed project, including but not limited to: geography, financials, property type, return projections, investment structure and entrepreneur experience. In order to mitigate fraud, MassVenture performs background and credit checks on entrepreneurs
What do we look for in projects at MassVenture?
Required Issuer Criteria:
Incorporated or formed within Texas
Not publicly listed
Identifiable track record and a viable project
Team credentials – experience in real estate developments
Have advisors & legal counsel (MassVenture can provide referrals)
Have at least 80% of the issuer’s gross revenues during its most recent fiscal year prior to the offering derived from operation of a business in Texas
Have at least 80% of the issuer’s assets at the end of its most recent semiannual period prior to the offering located in Texas
Will use at least 80% of the net proceeds of the offering in connection with the operation of business within Texas
Have principal office located in Texas
Positive traits looked for in an issuer:
Has viable revenue-generating project
Has prior project sales and development track-record
Can bring in own pool of investors/contacts
How long does it take to raise capital?
Offline, it can take up to 6 months for entrepreneurs with projects and a proven track record to raise capital. MassVenture aims to significantly reduce that time via the shorter lifecycle of online crowdfunding, with capital raise campaigns ranging from 30 to 90 days, depending on the entrepreneur’s duration choice.
As an Real Estate Developer seeking investment, what do I need to list my project on MassVenture?
As a issuer, you must have a project that is aligned with our guidelines above. In order to become listed on MassVenture and have a project profile that is listed on our portal, you must create a profile, apply to fundraise online, and be accepted. MassVenture is unable to accept every company that submits a fundraising request. Please contact us for more information.
Are there any transaction fees?
There is a non-refundable fee required to cover due diligence, documentation and administrative services provided. For funds successfully raised through the MassVenture marketplace, a variable % commission fee is charged. The administrative fee is deducted from any commission fees charged upon successful closing of a deal.
Once due diligence on a project is completed and approved, an escrow account will be opened and investors will be allowed to transfer funds into the account, where the capital will be held until the project reaches the specified investment goal. When the investment goal is met, a company will be able to withdraw the funds from escrow into their account for use on the specified real estate project.
Who can see my company information?
All detailed project documentation will only be visible to registered investors on the MassVenture platform.
Who sets the terms of my investment offering?
The issuer is responsible for setting the terms of the investment offering. MassVenture cannot provide any legal guidance on the terms that are best for an individual company. Therefore, it is recommended that issuers research the best terms for their project and consult their own advisors and counsel.
The minimum and maximum investment amounts provide the range of investments you are willing to accept from individual investors. The minimum and maximum investment amounts are typically higher for those who prefer to fill their funding round with fewer investors. Similarly, entrepreneurs who do not mind many investors participating in their round may set lower minimum and maximum investment amounts.
What does MassVentures do for me, and what am I responsible for?
MassVenture is responsible for:
Verifying the identity, residency and accreditation status of investors interested in investing in a project listed on MassVenture
Requiring issuers to complete all sections of their project profiles
Showcasing your project on the MassVenture marketplace platform
As an entrepreneur on MassVenture, you are responsible for:
Clearly and accurately representing your project, management team, and any other information related to your project
Keeping your MassVenture profile up to date and communicating with investors
Allocating scheduled disbursements and documentation
How much can an entrepreneur raise on MassVenture?
Under current state crowdfunding rules, entrepreneurs may raise up to $1 million from Texas-based accredited and non-accredited investors. Because the percentile capital costs are higher with lower raise targets, we encourage issuers to perform careful analysis of the funds needed for a project, so as streamline costs and provide investors a strong offering.
Will investors gain control over the real estate project?
No. Companies providing offerings on MassVenture remain in control of their operations. New shareholders remain as passive investors in a project, but may wish to contact you to ask questions or provide feedback.
What information will be listed on MassVenture marketplace?
Along with the offering itself, issuers will provide a general business plan related to the project, return projections, management bios, and a video and photos of the real estate venture alongside any other relevant information. For companies that require assistance in select financial, legal or marketing matters, we gladly provide solutions and referrals via our partners.
What is a K-1?
Similar to a 1099, a Form K-1 is an accounting of the tax income for the year. Each investor receives one per investment. Form K-1s are most commonly used in partnerships and in real estate ownership.
What is the difference between Accredited and Non-Accredited Investors?
The U.S. Securities and Exchange Commission (SEC) under Rule 501 of Regulation D. defines an individual as an accredited investor if they accomplish at least one of the following:
Earn an individual income of more than $200,000 per year, or a joint spousal income of more than $300,000 per year, in each of the last two years and expect to reasonably maintain the same level of income.
Have a net worth exceeding $1 million, either individually or jointly with his or her spouse.
Be a bank, insurance company, registered investment company, business development company, or small business investment company.
Be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
Be a business in which all the equity owners are accredited investors.
Be an employee benefit plan, a trust, charitable organization, partnership, or company with total assets in excess of $5 million.
Non-accredited investors are, by definition, those who do not qualify as accredited pursuant to the definitions above.
New Texas crowdfunding rules now allow Texas-based non-accredited individuals to invest in companies up to $5,000 per investment through registered online portals like MassVenture. Also as part of the new rules, Texas-based companies are allowed to raise up to $1 million per investment per 12-month period from Texas-based investors.
Can non-accredited investors invest in my company?
Newly enacted Texas State Securities Board crowdfunding rules predicated on Title III of the 2012 JOBS Act open the door for non-accredited Texas-based investors (the general public) to participate and invest in private offerings. For more information on the new rules, please visit this Texas SSB Intrastate Crowdfunding page.
Am I an investment company?
The definition of an investment company used in the JOBS Act and in Texas crowdfunding means a company primarily engaged in the business of investing, reinvesting, or trading in securities. Securities generally do not include the direct acquisition of property, so an entity that buys property for the purpose of development or resale may still raise funds from the crowd under our applicable rules. As you might expect, this does depend somewhat on the structure of your company and is one of the due diligence factors we review prior to accepting a project for funding on MassVenture.