“Every building can make a small change in the landscape of a city,” says Eve Picker, ”no matter how small or big that building is. We are building a technology platform that will allow people to vote on the buildings they want to see developed in their community and city by investing in them. In this way, they will be able to vote on the change that they believe is most important.”

Picker, a pioneer in urban development in Pittsburgh, is now the president and co-founder of Small Change, a real estate equity crowdfunding platform focusing on transformational real estate projects.

The Jobs Act of 2012 has opened the way for additional crowdfunding opportunities, beyond the rewards-based platform made popular by Kickstarter, by allowing a crowd of people to become investors in a company.

“There are already operational equity-based platforms, some of which focus on businesses, some of which focus on startups and some of which focus on lending. We’ve chosen to focus on real estate,” says Picker.

Want to invest in development you deem meaningful in your city? Small Change offers a way.

“On our portal, you will be able to invest as little as $100 to become an owner in a real estate project. After the project is developed and once it is operational, if all goes as planned for the project, you will receive a return on your investment.”

But Picker is interested in making Small Change more than just a real estate investment portal. While there are already a number of other equity-based real estate platforms, she says, each has its own distinct brand and none as yet has focused on the social impact of their projects as well as the financial return.

“This is so exciting to me. I think this is really going to shake things up. It’s difficult to raise funds for real estate projects like this in Pittsburgh and many other cities as well. Banks unfortunately tend to lend to the past, not the future. If the project is a new idea or in a neighborhood that does not yet have a strong market, it is difficult for developers to find sufficient financing. This in turn means that it is difficult to progress with new real estate projects or to support the neighborhoods in most need,” says Picker. “It’s important to have a tool for people to support neighborhoods they really believe in. I hope that Small Change can somehow contribute to changing this unfortunate dynamic.

Small Change will focus on a niche of real estate that Picker refers to as “transformational” which can mean many things.

“Will the real estate provide affordable housing? Are there neighborhood-serving businesses housed in the building? Is it a historically important building and will that building be restored? Does it have LEED certification? Is it near a park? Will it house a new business or help to create jobs? There are so many ways that real estate can influence a city’s landscape” says Picker. “We’ve chosen to focus on real-estate projects that will really make a change.”

Picker says that some projects will focus more heavily on this idea than others, but ultimately, it will be up to the investor, or the crowd, to decide what they choose to invest in. Once the site is up and running, each offering will show potential investors both sides of the return—the social and the financial.

The site will operate similarly to other crowd-funding sites we’re familiar with. Potential investors will be able to search based on features that are most important to them such as projected financial return, a neighborhood or zip code, the team or the social impact score of a project. Each offering will provide investors with a detailed account of the project, its location, the neighborhood, its budget and timeline.

“A developer will come to us and say, I have this building that we want to turn into apartments. I’ve raised some equity and borrowed money, but I need to raise a little more equity. Can we use your site? We’ll provide a way for the developer to raise funds by enlarging her pool of investors. That’s what crowdfunding does,” says Picker.

Their biggest task to date, says Picker, has been to wade through the regulations put in place by the Securities and Exchange Commission (SEC), which regulates offerings in the US. Picker explains that the SEC has for decades separated those with a low net worth, unaccredited investors, and a high net worth. There are currently two ways to make an offering: Regulation D is the easier of the two but requires the investor to have a personal net worth of at least $1 million or income of at least $200,000 for two consecutive years. This excludes a large percentage of the population from investing.

Regulation A provides a way to make an offering which would include unaccredited investors. Picker hopes that Regulation A offerings will be available on the Small Change portal, ideally for each and every equity raise. But she also recognizes that the legal landscape is uncertain, and Regulation A filings are time-consuming and burdensome to make.

Still, she says Small Change is working hard within the confines of the law to build a template to make such offerings available. In her eyes, these offerings are important for building communities. The website will also be highly explanatory, so that people on any investment level can enter and understand how real estate works, the process behind the regulations and the potential upside and downside of investing in real estate.

“We’re very committed to permitting investors on any level. Even as low as $100. We want the point of entry to be very small.”

Again, small change.

Picker plans to expand the company nationally with an anticipated local launch in early 2015. She is already in discussions with developers in Michigan, Ohio and Nevada.

“It’s untested territory,” says Picker who has carved out a career in that terrain, from her downtown lofts to her current Tiny Houses in Garfield. “We’re exploring it as fast as we can.”
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