Invest in fractionalized rental properties
Buy pre-IPO stock in private companies
Investments
$10,000
The minimum investment on EquityZen is $10,000, though this may vary by offering.
Moderate Risk
3/5
Investing with Lofty carries typical real estate investment risks, including market volatility, economic changes, and property management challenges. Additionally, the use of cryptocurrency and tokenization presents legal and regulatory uncertainties.
High Risk
4/5
Investing in private companies via EquityZen involves risks such as limited liquidity, market volatility, company performance uncertainties, regulatory changes, less available information, and potential lack of diversification, which could impact investment returns.
Moderate Liquidity
2/5
Lofty provides liquidity by allowing investors to list their property tokens for sale on the marketplace at any time, with a 2.5% transaction fee. Orders are held in escrow and have a 30-day expiration.
Minimum Liquidity
1/5
EquityZen offers liquidity for vested shares only. It does not provide liquidity for unvested shares, unvested RSUs, or options directly.
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Low Return
5 %
Lofty offers a 5% cash on cash return, with token values updating monthly based on HouseCanary's Automated Valuation Model (AVM).
Not Predictable Return
N/P
Unlike public market investments, private investments carry higher risks and unpredictability. Consequently, it's challenging to define a standard return rate for EquityZen investments.
Short-term Investment
1 year
Investment time horizon on Lofty is not fixed and is determined by property owners' collective decision on when to sell through the governance system.
Long-term Investment
2-5 years
Typically, companies on EquityZen have received late-stage funding, suggesting an expected investment horizon of 2-5 years, but outcomes can vary widely.
Who can invest
International
Investors from the US and abroad can invest with Lofty, excluding those from OFAC-sanctioned countries.
Moderate Volatility
3/5
The value of assets on Lofty's platform can be volatile, influenced by economic trends, interest rates, and real estate market conditions, potentially leading to variable financial outcomes for investors.
Moderate Volatility
3/5
Assets on EquityZen, which are shares in private companies, can be highly volatile due to limited public information, sensitivity to market conditions, low liquidity, and company-specific events, leading to significant price fluctuations.
Regulation and audits
Audited
Lofty's marketplace transactions are executed using a smart contract on the Algorand blockchain, which has been audited by CertiK for security.
Regulation and audits
SEC Regulated
EquityZen Securities is registered with the SEC and is a member of FINRA/SIPC, ensuring it adheres to regulatory standards and practices for investor protection and undergoes regular audits.
Insurance
No
Lofty's specific insurance details are not provided, but properties on investment platforms are usually insured against physical damage.
Insurance
No
EquityZen is a FINRA/SIPC member firm, offering account protection up to $500,000 (including $250,000 for cash claims) through SIPC in case of brokerage failure, not covering market value losses.
Payouts
Rental Income
Lofty provides daily rental income to investors, which can be withdrawn at any time through various methods including ACH, PayPal, and cryptocurrency options.
Payouts
No Recurring Payouts
Investors in private companies on EquityZen typically do not receive dividends, as these companies often reinvest profits to fuel growth.
Withdrawals
Investors on Lofty can sell tokens anytime on the marketplace and withdraw proceeds using methods like bank transfer, PayPal, or cryptocurrency.
Withdrawals
Investors can get their money back from investments on EquityZen mainly through an IPO, acquisition of the company, or secondary market sales on the platform. However, returns depend on market demand and timing of these liquidity events, with no guaranteed timeline.
Extra Fees
Yes
EquityZen charges a 5% fee to sellers upon transaction closure. For investors, a one-time sales fee applies: 5% for investments up to $500,000, 4% for $500,000 to $1 million, and 3% for over $1 million.
Taxes
Tax Form
Lofty provides US residents with pre-filled 1099 tax forms for income and capital gains reporting. Non-US residents may reduce withholding taxes with forms W-8BEN or W-8BEN-E if they have a US SSN or ITIN.
Taxes
Tax Form
EquityZen issues a Schedule K-1 for taxable events and provides vetted tax documentation to investors. Upon investment, individuals complete necessary tax forms (W-9 or W8-BEN) and receive annual tax updates.