Q&A With VC Jeff Hinck On The CrowdStreet Deal

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http://50.87.221.211/wp/wp-content/uploads/2014/12/Jeff_thumb1.jpgIt was announced last week that Rally Ventures led a $3.5m round into Portland-based CrowdStreet, an online commercial real estate investment platform.

Local investor and Rally Ventures General Partner Jeff Hinck was the point-person on that deal so we reached out to him to learn more about his motives and thoughts on crowdfunding.

How much did Rally invest?

2.25m

How did you come in contact with them?

They had previously done a seed round with Seven Peaks Ventures in Oregon and I’ve known Dino Vendetti for a long time…we we’re catching up he had mentioned them and then put us in touch.

What about their business compelled you to fund them?

They had made strong progress since their seed stage and that’s important.  With their year of operating history, they showed some really good strides.

Do you have a broader interest in crowdfunding?

Yes, we definitely do — but it’s not a core focus.

Whether it’s crowdfunding per se, or means of bringing more institutional type asset classes to more investors, take angellist for example. Or commercial real estate, like in this deal…we think it’s a solid trend with three legs:  (1) disintermediating the middle men (2) simplifying the discovery process and (3) expanding the market.

As a VC, do you see crowdfunding changing the venture landscape?

It’s helpful for guys like us because it broadens the base of investors who can participate earlier in the seed rounds.  So yes, in terms of the venture impact at large, it’s positive.  In ten years it will be interesting to see what that looks like. There will always be a role for quality institutional capital.

Are you seeing any such impact in the market currently?

I think there’s more attention and interest in angel investing happening right now…it’s a factor…but the number of equity type seed financings based on crowdfunding is still incremental.

Do you look at deals differently if there’s a crowdfunding element?

Yes and no. Like in Angellist there are syndicates and they are trying to create a credibility or branding effect, but with Kickstarters and such, there’s no difference really in who the backers are.

Where is the fund at currently?

We’ve made 25 investments since 2013 and this was the fourth investment in Rally Fund II.

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