RealtyShares Comments on Recent SEC No-Action Letter

Agency’s Response to Citizen VC Indicates That “Cooling-Off” Period May be Avoided

SAN FRANCISCO – RealtyShares, the online marketplace that is transforming the real estate investment landscape by connecting accredited investors to real estate investment opportunities nationwide, today commented on a recent no-action letter issued by the Securities and Exchange Commission (SEC) in response to an inquiry by Citizen VC, Inc. as to that company’s method of onboarding new investors.    

Citizen VC outlined several policies and procedures aimed at ensuring that the company develops “substantive relationships” with prospective investors it meets online before offering them investment opportunities on its site.  The steps essentially call for several levels of interaction between the firm and the prospective investor, all designed to let the firm understand investors’ sophistication and financial circumstances so that it is in a position to evaluate their suitability for complex and risky private securities transactions.  The SEC did not disagree with Citizen VC’s approach.

“This no-action letter appears to recognize that online capital marketplaces have effectively changed the way people do business,” said Nav Athwal, RealtyShares’ CEO and co-founder.  “In it, the SEC specifically agrees that the quality of the relationship between an issuer and an investor is the most important factor in determining whether a ‘substantive relationship’ exists — that is to say, where an issuer has sufficient information to evaluate a prospective investor’s financial circumstances and sophistication in determining his or her status as an accredited investor.  The SEC also clearly agreed that there is no specific duration of time that can be relied upon solely to create such a relationship.”

“We will be studying this development closely with our advisors,” continued Mr. Athwal.  “It seems to indicate, however, that the “cooling-off period” that new investors have to endure on sites like ours may no longer be necessary if we institute certain procedures at the beginning of the process that establish an investor’s suitability and financial circumstances.   In our opinion, this approach will remove some legal uncertainty that existed in this area, and is likely to eliminate some of the friction in these private placement transactions.  RealtyShares commends the SEC for having given clear guidance in this area, and believes that this development will launch a new growth stage in platforms like ours that remain focused on privately-placed security offerings.”

About RealtyShares
RealtyShares is transforming the real estate investment landscape by connecting borrowers and sponsors to debt and equity capital from accredited and institutional investors, across an array of financing products.  Through the RealtyShares website, these investors can browse investment opportunities, perform due diligence, invest online and have 24/7 access to an investor dashboard to watch how their investments are performing.

 RealtyShares offers equity securities through WealthForge, LLC, member FINRA/SIPC.  WealthForge adheres to best industry practices for the administration of online private placements by a broker-dealer.  For more information on how to become a real estate investor or to seek capital through the RealtyShares marketplace, please visit

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