Sponsor syndication efforts can be faster and more efficient than traditional syndication by exploiting new technology—making your capital raising process smarter and potentially more rewarding than ever before. By using subscription and syndicate management technology, a sponsor can effectively leverage the same tools a crowdfunding site uses to get in front of a much broader and larger audience of suitable investors. Many real estate managers have an issue in getting their offerings in front of due diligence officers and tracking the process of review when approaching the broker-dealer, registered investment advisor (RIA) and family office space.

Here are three reasons real estate firms should leverage technology to raise money.

1. Greater diversity of broker-dealer and advisory firms

As technology platforms work on simplifying investing by making it faster and easier, they've managed to attract and retain a large audience of broker-dealers and advisory groups from all over the country. The “general solicitation” feature offered under Reg. D exemption 506(c) provides real estate groups this opportunity. Similar to traditional syndicate management in public markets, a technology-enabled private placement syndicate can leverage the investor networks of selling broker-dealer and RIA firms. Only by leveraging technology can an invitation be sent to hundreds of broker/dealer decision makers at once, across a wide variety of industry, geography, and market focus.

That interest can be tracked and reported back to the real estate sponsor in real time. By exposing your offerings to a broader audience, the sponsor or manager may get introduced to new firms they may not have had a prior existing relationship with – or may not have known existed before. New introductions lead to new selling relationships, and in today's world of institutional investment specialization, the process of general solicitation can help to create suitable channels for new products.

2. Greater diversity of products for the selling broker-dealer to review

A complement to the benefit to syndicate managers is that selling brokerages now have access to greater diversity and quantity of products to sell. Selling brokerage due diligence officers and executives can review a wide range of products by sorting through debt or equity, corporate structure, industry, geography, sponsor tract record, minimum investment size, and more. As selling brokerage and RIA firms become more specialized to offer higher relational services to their specific clients, they look for products in line with their investment goals, whether they be high growth, income producing, environmental, social and governance (ESG) focused or regional.

3. Efficiency without sacrificing relationship-building activities

On the registered rep side, advisors can choose a deal they want to discuss with a client, evaluate offering materials, and subscribe to the opportunity — and do it all online, 24/7. Traditional paper processing of subscription docs is eliminated, meaning client social security numbers and personal information are safely delivered and stored from one encrypted entry point. As a sponsor, you can expect a smoother, faster, safer process, because technology can streamline both the fundraising and reporting aspects of your deal, not to mention long-term organized retention and retrieval in the event of litigation or audit.

In conclusion, leveraging technology has undoubtedly changed the way sponsors can raise capital. By exposing an offering to selling broker-dealers and inviting them to view the due diligence materials in a virtual data room, sponsors can reduce administrative time, thereby lowering costs, accelerating the raise, and building a larger and more far-reaching selling group.

As director of national accounts, Brad Blazar leads the wholesale and syndication efforts for Venture.co brokerage services. In this capacity, he establishes relationships with managers, broker/dealers and RIA firms. He also has experience in national sales manager positions with multiple firms in the industry focused on real estate and private equity. The views expressed in this article are the author's and not those of ALM's Real Estate Media Group.