Sharks Horrified at Entrepreneurs SHADY Property Development Startup | Shark Tank AUS

David Lovato, founder of ‘Crowd Property Capital’ entered the Tank only to infuriate the sharks with his get rich quick scheme – his business plan unveils red flags throughout! 🦈🚨

Next into the tank a financial entrepreneur hoping to bring the crowds to property development hi sharks my name’s dave levada i’ve come to the tank today to try and secure seed funding for my startup crowd property capital cpc i’m looking for $80,000 for a 20% stake in the business cpc is an innovative peer-to-peer lending platform that uses technology to

Allow investors to loan funds to borrowers on fixed terms the beauty of the cpc model is it cuts out the traditional middleman being the banks resulting in a better deal for both investors and borrowers peer-to-peer lending is a relatively new concept in australia however overseas markets are thriving in china the peer-to-peer lending market was a hundred

Million dollars in 2010 in this year alone that figure has ballooned to 20 billion i’ve come to the tank to try and get a shark on board with my business to provide it with a platform for legitimacy and trust i feel that’s very important in this type of market and space i’m also looking for one of one of you guys the sharks to be the lead investor in the first

Few loan offerings to provide trust and legitimacy in the business and allow the other smaller investors to come on board to the platform thanks for your time ok so dave that was 80,000 for 20 percent so you’re valuing your business of four hundred thousand that’s right can you just clarify are these loans for property only and property development or are they

Just general loans no so my expertise and background is in is in the property development sphere and it’s and it’s essentially a platform for property finance so developers can come to cpcc in seeking alternate forms of finance okay to develop their project go get’em steve baxter where are you from dave i currently work for a property developer in sydney brisbane

Melbourne at sydney sydney excellent so are the investors providing debt or like like getting equity in return what does it say instrument with the 20% of the business for 80,000 oh no no no and you’ll run your business as it is the person giving them money that investment is that coming in as an investment or is it it’s a debt investment so that is turn to that

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Investment so just like a part of a legislation you currently govern under then so at the moment we can commercialize this business by having sophisticated investors invest in the platform so so sophisticated investor if someone who owns more than $250,000 a year for last two years or has more than 2.5 million dollars in net assets is that correct that’s right and

Superannuation self-managed superfunds so basically people with a certain amount of asset above that level can lend and get involved in mezzanine finance you’re trying to create a platform so that the little guy with smaller amounts of money maybe one or five thousand dollars can group together and go alongside them is that what you’re trying to do correct let’s

Understand your business model sure walk me through why this is a great idea because this platform will give a yield around two percentage points higher than a term deposit in the bank they don’t have four percent return four to five percent and what security you’re gonna give the small investors on that loan they’ll be mezzanine finances when they say there won’t

Be first mortgage they’ll be second or third it will probably be second or third mortgage because we don’t have this or want to give someone four percent return on a mezzanine type line that’s terrible what are the most lenders getting they’re getting between 17 and 25 percent and you want to give four that’s what that is that’s shocking david lovato is looking

For a shark to invest in his platform offering crowd-funded property investment this platform will give a yield around two percentage points higher than a term deposit in the bank but the rate of return is under the spotlight you want to give someone four percent return on a mezzanine type line that’s terrible the reason it’s terrible they’re getting between 17

And 25 percent and you want to give four that’s that is that’s shocking the banks are you nothing going to go wrong there nothing’s moving there and then you get to mess which what bears is there’s a nice format is it mezzanine financing is that you’re the second person so you’re the highest risk so if that building falls down or they go broke the banks come in

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And go where the first mortgage we get all the security and then you basically got nothing so that’s why you get a better return on that because high risk and i don’t doubt that the investment is a higher risk and that’s why you get a higher interest rate no every set is not a higher interest rate i didn’t say 4% every every line will have a different structure

And some of those lines will be secured you said the sharks that invest you want them to come in there so not only do we put money into this deal but we have to put money into the first two or three property deals as well do it into the first few lines to get what returns what we get on those depending on the deal but it would be you know a six percent – it just

Depends on the last dive i’m a shark yeah but i’m starting to feel like a guppy because quite simply i am a sophisticated investor yeah i actually have back to developers intervention oates earning 14% this year if i said yes to today and i said i want to and so we’re gonna add all property tomorrow yeah you can’t do it unless it’s sophisticated investor you can’t

Do the model that you want to do is that correct right today correct so we haven’t reached commercialization yet so you’re pitching to us something but you can’t do legally right now we can can do it right now with us if you see no investor stop because what you’re pitching for us is a small investors you came out and said you want a whole lot of small investors

To invest with sophisticated investors right that’s what you want so that’s what you pitched so what you’re saying now is you can’t do it today what you pitched with the retail investors yes or no no not with the retail investors i just want to know do you need a financial services license you do right and have you got that license lab de onate where i’m at my

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Qu you would drive the biggest thing i wrote down here was legitimacy and trust you are towing for an absolute minefield and you want us on your back in fact you want to be on our backs that’s the worst part right and i think i just stood on a pressure plate i want to keep my foot i’m out thank you very much you’re playing in a world that is very dangerous people

Use their superannuation they use their life savings to invest it in property and you need to take this very very seriously i find this pitch quite frightening you have no license you’re pitching a business that you cannot legally start and you need to take people’s life savings and what they do very seriously my timeout today to pull this off we fundamentally

Got to be better than the market at picking the right property developments to invest in have you done a lot of property developments that have made a lot of money i work for a large property developer have you personally used your own judgment to pick and package property developments and made money not as my own business not as anything all right well i’m out too

So you’re not working in this business you’re working for someone else that’s right okay so this is a dream yeah no not me i’m really challenged by you requesting our reputations my reputation is worth too much amen what really concerns me about your model is you want the little guy to take a risk and that’s what really upsets me it’s what governments are for to

Protect the little guy so i map hey stay they felt that the the business was way too risky obviously i didn’t go for it but i strongly believe in in crowd investing and gonna try and continue on and and see where things end up you

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Sharks Horrified at Entrepreneur’s SHADY Property Development Startup | Shark Tank AUS By Shark Tank Australia