Can Crowdfunding Cure Income Inequality?

CHICAGO—Crowdfunding has become one of the hot topics in commercial real estate, and while many people hope the technique can bring in needed dollars to help finance individual deals, Scott Picken hopes it can change the world. The founder and chief executive officer of Wealth Migrate, a global real estate platform with offices in London, Atlanta, Asia and South Africa, saw a great deal of poverty growing up in South Africa. But he predicts that in the near future at least one billion people, including many in developing countries, will gain access to real estate investments through crowdfunding and make a real dent in the problem of income inequality.   

“Right now, for the vast majority of people the system is set up for failure,” he tells GlobeSt.com. When the US Congress passed the JOBS Act three years ago, it limited the commercial real estate crowdfunding space to accredited investors, shutting out all but the wealthy. But it also included provisions that required the Securities and Exchange Commission to issue regulations that would open up the space. But although the agency last week issued new rules that make it easier for small- and mid-sized businesses to raise capital, it is still mulling over changes needed to bring non-accredited investors into the crowdfunding arena.