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Patch of Land’s Perspective on Title III of the JOBS Act

For those in the world of Equity Crowdfunding, today is the real “May Day” -- Monday May 16th, where after many long years of waiting, Title III of the JOBS Act finally goes “live,” allowing the retail, non-accredited investor to participate in private placement equity offerings from startups and small businesses. For example, now a local business can raise equity from its own community members.

This will open new landscape to raise capital-- where everyone can be a part of a “Sand Hill Road” without having to match a typically much larger and more exclusive angel investor threshold of financial investment. Instead, they can participate in smaller increments, say $1000 or $5,000. This also means that companies seeking funding don’t necessarily have to make the trek to the actual Sand Hill Road in Silicon Valley to find their venture capital.

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As we raise our own glass with those celebrating today, we want to point out that Patch of Land  will be doing business the same way we did it this past Friday the 13th -- which is to say, we will not be adopting the provisions of Title III ourselves, but rather, staying with Title II Regulation D 506(c), which maintains that our investors must be accredited.

With Title III, a company soliciting investors is limited to raising $1,000,000 in a 12-month period. Patch of Land routinely funds loans to borrowers in 4-10 business days, and our average loan size is around $440,000.  We also recently broke our platform funding speed record when $1.5 million was funded on the platform in one hour. Our business is about speed, consistency and financing large asset-backed real estate investment loans.

While it may be disappointing to some that Patch of Land is not adopting Title III, it simply does not give us the flexibility to raise capital for our projects and our borrowers. The limitations in Title III are not conducive to our business model and the strong value propositions that we’re known for, and have carefully developed. These include, among other things:

  • Short duration real estate debt investments.
  • Lending only to established, experienced real estate professionals.
  • Repeat borrowers who come back several times per year for their financing needs.
  • Loans secured by real assets with a 1st position lien.
  • A best-in-class legal note structure with added investor protection: http://landing.patchofland.com/legal.
  • An asset management team led by a veteran with 30+ years of experience, that can take over the property and complete the investment objectives if, for some reason, the borrower becomes unable to do so.
  • Redundant and diversified sources of capital including over 90% of funding by the crowd.
  • Diversification of investments across property types (residential, multifamily, commercial), loan duration, yield curve, geography, and loan type (fix and flip, purchase, refi, rental).

Patch of Land’s co-founder Jason Fritton was heavily involved in early JOBS Act activities to help push the legislation through congress and we celebrate this expansion of investment opportunities through Title III-- with its ongoing emphasis on innovation, transparency, and accessibility for both investors and new businesses.

For those whom Title III’s model fits, and for those million-dollar start-ups that will continue to grow after finding their financing, we applaud you and welcome you to the paradigm-changing world of crowdfunding!



If you want to learn more, take a look at some of the most commonly asked questions we receive about real estate crowdfunding on a daily basis and find out why so many people are crowdfunding real estate projects across the country with Patch of Land.
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If you still want to know how Patch of Land works for professional real estate developers and accredited investors, please visit Patch of Land’s FAQ section and learn more today.

4 thoughts on “Patch of Land’s Perspective on Title III of the JOBS Act”

  • Jonathan Beatty

    Jonathan Beatty commented May 21, 2016

    Im very disappointed to hear that patch of land wont adopt title III i really like your transparency and business model and was hoping that the small investor would get the chance to expand their portfolio using your secure and sound businrss model

    Patch of Land

    Patch of Land reply May 26, 2016

    Thanks so much for your comment and we're sorry that this is disappointing news. We are looking into the best possible way for retail investors to participate in our offerings. Stay tuned and thank you for your support!

  • Cathi

    Cathi commented May 22, 2016

    I'm so disappointed!

    Do you think non-accredited investors will EVER be able to participate in Patch of Land offerings?

    Patch of Land

    Patch of Land reply May 26, 2016

    We are also disappointed that Title III does not provide the structure to allow retail investors to invest with Patch of Land. We are looking into various options that could allow us to include the retail investor, but we do not know yet when that will be possible.

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