The COVID-19 pandemic changed the world in numerous ways. Among the most significant was an explosion in the use of web-based communication platforms, which extended to the finance sector. As investment management firms ushered in a “new paradigm” of hybrid and remote work and moved significant parts of their business operations online (through Zoom, Google Meet, and other platforms), building trust and maintaining strong relationships with investors became more important than ever. In the real estate crowdfunding space, where personal connections and trust power everything, companies are looking for a delicate balance between embracing financial technology (a.k.a. “fintech”) and preserving the human touch that has led the industry to its biggest successes.
EquityMultiple has been a leader in this regard, finding tech-enabled solutions to a historically common problem. In fact, the inception of EquityMultiple was inspired by the challenges its co-founder and CEO faced seeking an investment in a large-scale commercial real estate property. Charles Clinton realized that securing such an investment would be a daunting challenge for a typical individual investor lacking high-powered institutional connections. After the JOBS Act of 2012 eased access to real estate investments for accredited investors and other members of the general public, EquityMultiple was born. Previously hard-to-find commercial real estate opportunities became syndicated on EquityMultiple’s platform, allowing accredited investors to invest passively while keeping their personalized diversification needs top-of-mind (the platform offers a wide range of investment products to meet investors’ diverse needs, including different risk/return profiles, hold periods, and other attributes.)
This personalized approach to investing requires a personalized approach to investor relations, and indeed, EquityMultiple upholds a commitment to transparency in all its communications with investors. In-depth information about an investment is contained within its offering documents, allowing an investor to weigh the details that matter to them and assess the track record of an investment’s sponsor. To that end, the company’s investor relations team stands by to answer any questions an investor may have about any offering on the platform.
Although EquityMultiple was launched in 2015 prior to the pandemic, it has lent itself extremely well to our virtual present. Investors can make investments from the comfort of their own home (or anywhere with an internet connection), and no longer need to hold in-person meetings—or even go to the post office to send a check. This virtual approach to investing has proven to be incredibly valuable in the face of the pandemic, as it has allowed our investors to continue participating in real estate opportunities without putting their health or safety at risk.
While many traditional real estate investment firms struggled to adapt to the new reality of social distancing and remote work, EquityMultiple was already well-positioned to thrive in this environment. Let’s dive into the importance of high-touch communication, and what that means for investors.
The Virtual Shift and the Importance of Human Connection
The COVID-19 pandemic forced businesses to embrace virtual communication to maintain operations, forever changing human interaction as we know it in the relationship-driven world of real estate investing. Even so, human touch still remains a critical component of building trust and fostering long-term working relationships. The shift towards virtual communication has also brought about new challenges. These have required a significant investment in technology, as well as a willingness to adapt and innovate in order to meet the changing needs and expectations of investors.
Transparency in the Virtual World
Transparency extends to the way we present investment opportunities and communicate potential risks. In a virtual environment, it can be tempting to present investments in an overly optimistic way, focusing solely on potential returns while downplaying risks. At EquityMultiple, however, we believe in providing a balanced and honest assessment of each investment opportunity. We present a clear and comprehensive picture of the potential risks and rewards associated with each investment, using data-driven analysis and expert insights. By being transparent about risk, we build trust with our investors and demonstrate our commitment to ethical and responsible investing practices. Furthermore, transparency also means being open and responsive to investor questions and concerns. With the lack of face-to-face interactions, it is essential for fintech companies to provide multiple channels for investors to reach out and have their questions addressed promptly—we make it easy for investors to reach us via email, phone, or using a chat button on the bottom-right-hand corner of our website.
Our investor relations team recognizes that technology is a tool to enhance, rather than replace, human interaction; while we leverage digital platforms to provide investors with seamless access to information and investment opportunities, we also prioritize personal connections and direct communication. During my time here, I’ve seen firsthand how the team goes above and beyond to provide personalized attention to each investor, whether that be through one-on-one phone calls, virtual meetings, chats, or prompt email responses. By maintaining a high level of personal engagement, we’ve built and strengthened relationships with our investors. This has been particularly important post-pandemic, as investors seek reassurance and guidance in navigating market conditions.
We also commit ourselves to providing investors with comprehensive and accurate information about investment products. In doing so, we leverage webinars, quarterly updates, and one-on-one communication with investors. All necessary information—track records, glossary definitions, and so on—are readily available on the homepage of our platform.
To adapt to the virtual shift, EquityMultiple has implemented various strategies that ensure consistent and meaningful investor engagement. This includes leveraging advanced communication tools, hosting virtual webinars and Q&A sessions, and providing real-time updates through digital platforms. These initiatives provide ample opportunities for investors to interact with our team, ask questions, and receive timely responses.
One such initiative is our Monthly New Investor Orientation, which I have had the privilege of creating and conducting monthly. These webinars are designed to provide potential investors with an in-depth look at our platform, our investment philosophy, and our approach to risk management. I walk investors through our due diligence process, explaining how we evaluate potential investments and what criteria we use to select properties for our platform. I also provide an overview of our technology platform, highlighting the tools and resources available to investors for tracking their investments and accessing key information. Through this webinar and others like it we aim to demystify the real estate investing process and arm investors with the information they need to make informed decisions.
Despite the challenges posed by the lack of physical interactions, EquityMultiple places a strong emphasis on building a sense of community among our investors. Through interactive webinars and other events, we enable investors to connect with each other, share insights, and build interpersonal relationships. We aim to ensure that investors feel valued, and an integral part of a network of like-minded people.
The Role of Technology in Enhancing the Investor Experience
In addition to the technologies previously mentioned, features such as real-time portfolio tracking, detailed investment performance reports, and secure document sharing contribute to a world-class investor experience. By integrating technology with personalized service, we feel that we set ourselves apart from similar platforms.
We recognize that technology is constantly evolving, and investor expectations are always changing. That’s why we’re also committed to continuous improvement and innovation. We actively solicit feedback from our investors and stay attuned to industry trends to identify areas where we can improve our platform. By embracing new technologies and consistently refining our offerings, we aim to meet investors’ ever-evolving needs as the years go by.
Conclusion
The shift towards virtual interactions presents both challenges and advantages to the real estate crowdfunding industry. At EquityMultiple, we embraced this new reality by leveraging technology to enhance, rather than replace, human connection. Through transparent communication, personalized engagement, and a commitment to innovation, we continue to build trust and strong relationships with our investors.