Born in the Triangle, Groundfloor isn’t able to do business in North Carolina.

Yet.

But the startup’s top exec vows that will change soon.

Groundfloor, the startup that hopes to revolutionize real estate investing and lending with a crowdfunding program that enables the general public to take a chance at making money, is expanding to five other states. It’s using $300,000 in recently raised capital to fuel the expansion.

But my first question to co-founder and CEO Brian Dally was: 

Why not North Carolina? What’s up here? Issues?

“Every state has its unique requirements to register a securities offering such as ours. In the case of North Carolina, there is one particular requirement that we are preparing to meet soon, but do not meet yet,” Dally explains.

Rather than get into the nitty gritty of that requirement, let’s focus on the bigger picture.

Groundfloor is announcing today its expansion to five states beyond Georgia, where it pulled off two startup deals. The company has to meet a variety of federal and state law since the registration and selling of securities is involved in financing the real estate deals. 

Groundfloor has competitors, but Dally insists that his firm is the one with a platform that opens “the market for real estate investment equally to everyone, regardless of wealth or income.” To make a deal through Groundfloor doesn’t require investors to be “accredited” – $200,000 in annual income or $1 million in net worth. 

Through today’s expansion, Dally and company are targeting “more than 43 million” potential investors in Arizona, Illinois, Massachusetts and Virginia with Pennsylvania expected to be added shortly.

“We started Groundfloor with a commitment to building a financial product with benefits available to everyone, not just the financial elite,” Dally said in announcing the expansion. “Today’s milestone is the result of that commitment, expressed through the support and unwavering focus of our visionary team of expert legal counsel, faithful angel investors and dedicated board of advisors.”

Going Inside the Announcement

Here’s our Q&A with Dally about this deal and future plans:

  • Why these particular states?

The requirements to register our offering were consistent among these states. That is especially important because all the states must to agree on their review of it. We also have good working relationships with the regulators and have confidence that we can meet their requirements in a timely fashion.

  • Do you have prospective deals already lined up in these additional states?

We have not yet announced the first deals to be funded this summer, but continue to receive proposals at http://www.groundfloor.us/developers

  • Will you have to open additional offices and/or hire additional personnel as a result? If so, where and how many people? What skillsets are you seeking?

Near term, we’re planning to add to our team in Raleigh in the areas of software development (Ruby / Rails) and marketing.

  • What is driving the demand or do you see opportunities to exploit?

Being a micro-lender in real estate is a consistent, stable way to build wealth — and soon it’s going to be available to everyone, regardless of how much money you earn or already have. Aside from investors, there are also a lot of people who watch house flipping shows who love the idea of putting their money into that, for the fun of and the profit in it.

  • Any target in terms of dollars you hope that these deals will raise?

This offering will be limited by federal law to raising $5 million.

  • Is the ultimate goal all 50 states and territories?

Yes. That has been the plan from the very beginning. As a startup, we know we have to build traction to attract enough venture capital to achieve that goal–and today is an important step on that path.