An important step in the maturation of the crowdfunding industry took place Jan. 5 with the introduction CFX Markets, a secondary market for crowdfunded investments from real estate platforms.
The lack of liquidity has been seen as the major impediment to the growth of the crowdfunding industry. Larger investors were wary of needing to hold on to investments, even for two or three years.
CFX Managing Director Juan Hernandez said the combination of liquidity and the quality of participating platforms bodes well for CFX.
“The official opening of the CFX Markets platforms represents a landmark for the crowdfunding industry.”
“We’ve always felt that in order for equity crowdfunding to reach its full potential, investors would need the option of liquidity. CFX will provide crowdfunding investors with the much-needed option of liquidity, and we’re thrilled to partner with some of the leading real estate crowdfunding platforms in the industry.”
PeerRealty CEO Jordan Fishfeld explained how the added liquidity will also help his platform.
“There are a lot of real estate crowdfunding platforms in the market, but being able to give PeerRealty investors the ability to exit their positions if need be will make our investment offerings more appealing.”
Think of a secondary market as a crowdfunding stock exchange where investors can buy and sell shares from each other should they meet SEC resale restrictions. Such investors register on CFX either directly or via a participating portal and create a free account.
Once the investor’s identity is authenticated they can synchronize all of their assets from CFX partner portals. CFX collects the information from those portals and allows investors to state a selling price. Interested buyers can research assets before bidding.
CFX’s platform is in invitation-only mode. Investors and platforms can get more information at CFXinvesting.com.