Highlights
- Aaron McDaniel pitches TycoonRE, a real estate crowdfunding platform, on Shark Tank
- TycoonRE allows non-accredited investors to invest in real estate through an online platform
- Despite interest, the Sharks express concerns about the risk, and no deal is made
Overview
| Category | Details |
|---|---|
| Name | TycoonRE |
| Founder | Aaron McDaniel |
| Industry | Real Estate Crowdfunding |
| Product | Online platform for real estate investment |
| Funding | N/A |
| Investment Ask | $50,000 |
| Equity Offered | 5% |
| Valuation | $1,000,000 |
Serial entrepreneur Aaron McDaniel pitches TycoonRE, a real estate crowdfunding platform, in Shark Tank episode 620. McDaniel, formerly one of the youngest ever VP’s at AT&T, built the site after the passing of the JOBS Act in 2012 which allows non-accredited investors to fund small private companies online.
The crowdfunding process on TycoonRE is quite simple. Simply go to the TycoonRE website and browse the listings, which are rated with a risk factor from 1 to 5. Listings come with a projection of expected rate of return. Once you find a property you want to invest in, click on it, and a TycoonRE representative contacts you within 24 hours to complete the deal. All “paperwork” gets done online and funds are electronically transferred. Once a deal is complete, you become a “partner” in a limited liability corporation that owns the property. When a deal is completed, profits are distributed to the “shareholders.”
TycoonRE currently operates in San Francisco’s hot real estate market. McDaniel wants to grow into other markets and seeks to accelerate the process with the help of a Shark.
Will a Shark want to be a real estate tycoon?
TycoonRE Shark Tank Recap
Aaron enters seeking $50K for 5% of his company. He explains how TycoonRE and real estate crowdfunding works. Mark immediately says he hates it and goes out. He walks the Sharks through one of the deals on the site. He says it’s the brink of a new era.
Robert wants to know how he gets his money back; Aaron explains how each investment works. TycoonRE takes a 1.5% fee. TycoonRE has done two deals to prove concept. Kevin says he can go buy a REIT, Aaron says they aren’t sexy; he says people have more of a connection with a physical property. Robert thinks the people who’d invest in this should invest more conservatively. Mark says crowdfunding tempts people who can’t afford it.
Lori doesn’t like the idea, she thinks it’s risky and uncomfortable. Barbara thinks any real estate investment relies on the lead developer, she thinks it’s scary too; she’s out. Kevin says he knows the burden of managing other people’s money. Kevin offers $50K for 50%, but he wants to re-brand it under his own name. Aaron declines.
RESULT: NO DEAL
TycoonRE Shark Tank Update
The Shark Tank Blog constantly provides updates and follow-ups about entrepreneurs who have appeared on the Shark Tank TV show. The company was acquired by American Homeowner Preservation in November, 2015 for an undisclosed amount. Since the sale, Aaron has founded several businesses, and he teaches entrepreneurship at the University of California, Berkeley, Haas School of Business.
Posts About TycoonRE on Shark Tank Blog
TycoonRE Company Information
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