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Beware of Platform Risk - How PeerStreet, a Real Estate Crowdfunding Firm, Went Bankrupt

2023/7/19

Money For the Rest of Us

This chapter introduces the concept of platform risk using PeerStreet, a real estate crowdfunding firm, as a case study. It explains what a platform is and how PeerStreet operated, highlighting the seemingly low-risk nature of its real estate-backed loans in its early years.

Introduction to platform economy and PeerStreet
PeerStreet's initial success and low default rates
Focus on hard money loans and their characteristics

Shownotes Transcript

How to mitigate the risk of investing on crowdfunding platforms where there is little transparency on the underlying financial health of the platform company.

Topics covered include:

What is the platform economy
How blitzscaling and an over-reliance on venture capital funding led to Peer Street's bankruptcy
What happens next for investors on Peer Street's platforms
How individuals and businesses can mitigate the risk of investing or conducting business on platforms

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Show Notes

Amazon: Independent Sellers In The U.S. Sold More Than 4.1 Billion Products in 2022 by SGB Media—SGB Media)

PeerStreet)

LinkedIn Post by Brett Crosby—LinkedIn)

Crowdfunding platform PeerStreet files for bankruptcy by Flávia Furlan Nunes—Housingwire)

AI Was Q2’s Big Hope To Reverse The Global Venture Funding Slowdown. It Wasn’t Enough by Gené Teare—Crunchbase)

VC finds its footing as headwinds weaken by James Thorn—PitchBook)