GE 209: How Jilliene Helman Raised $45M of Venture Capital and Built a Real Estate Crowdfunding Business (podcast) With Jilliene Helman

Jilliene Helman Headshot

Hey everyone, today I share the mic with Jilliene Helman, CEO of Realty Mogul who was included in Forbes’ 30 Under 30 list in 2015.

Tune in to hear Jilliene share how the JOBS Act inspired her to take the leap from her bank job to starting her own online investing company, her struggles of being a CEO, how she got their first 1,000 customers through Angel pitch competitions, and why she does a micronutrient test once every quarter.

Download podcast transcript [PDF] here: How Jilliene Helman Raised $45M of Venture Capital and Built a Real Estate Crowdfunding Business TRANSCRIPT

Time-Stamped Show Notes:

  • 00:37 – Leave a review and rating and subscribe to the Growth Everywhere Podcast
  • 00:56 – Eric welcomes Jilliene Helman, CEO of Realty Mogul, an online marketplace offering crowdfunding for real estate investing opportunities and she is included in the 2015 Forbes 30 Under 30 list
  • 01:23 – Jilliene always knew that she wanted to be an entrepreneur
  • 01:45 – Realty Mogul allows investors to do all their transactions online
  • 02:06 – Jilliene was working at the bank and her boss asked her to look into the Jobs Act that legalized crowdfunding for investments
  • 02:36 – Jilliene quit her job after a few months and started her own business
  • 02:54 – Jilliene says there is always an element of fear, but you just have to get over it
  • 03:27 – The company offers different types of transactions – for investors focused on income, they offer REAT or real estate investment trust
    • 03:45 – For REAT, they just declared their 9th consecutive 8% annualized distribution
  • 04:24 – The returns depend on how much risk the investors are willing to take
  • 04:35 – The company raised $45 million of venture capital which was used to operate their day-to-day business; for real estate, the investors gave $265 million with 110,000 registered investors on the platform
    • 05:10 – The worth of the $265 million investment in properties is a billion dollars and the return was $60 million dollars in capital
    • 05:21 – The goal is to quickly return the money back to investors so they have 0 principal loss
  • 05:51 – The company is not liquid and investors are in it for the long haul
  • 06:27 – Jilliene got their first thousand customers through press in blogs and pitch competitions
  • 07:05 – In terms of customer acquisition, the company does Google, Bing, Facebook, digital advertising, SEO and offline events
    • 07:30 – The goal with SEO is to educate the consumer about real estate and to drive SEO
  • 08:12 – What’s one big struggle you faced while growing the business? – Needing more time and money. Jilliene did not realize at first how long it would take and how much money she would need. They had to build the infrastructure and had to comply with the regulations
    • 09:06 – They learned to make tough decisions in different aspects of their business
  • 09:49 – Jilliene says you evolve as a CEO and the company has grown astronomically over the years
  • 10:22 – Personally, Jilliene grew as a CEO because she had to—as the company grew, she had to become more relaxed and trust people more
  • 11:43 – Jilliene loves learning from books and from others and believes that there is always room for improvement and the goal is to be the best version of herself
  • 12:57 – What’s one big change you did in the past year that either impacted yourself or your business? – For Jilliene, family is always number one, health is second and third is the company.
    • 13:34 – Her biggest change regarding her health is optimizing micronutrient levels
    • 14:14 – Jilliene does a micronutrient test once every quarter and changes her diet depending on her needs, but most of what she eats is green, leafy vegetables
    • 14:46 – Jilliene gets her tests done at Next Health
  • 15:35 – Meeting interesting people is a source of energy for Jilliene
    • 16:05 – She likes that she is learning from other CEOs about their best practices and how to face challenges
  • 16:44 – What’s one new tool that you’ve used in the past year that has added a lot of value? – Journaling
  • 17:48 Eric says you can start with the Five Minute Journal
  • 18:36 – Journaling gives Jilliene rest from her busy day
  • 18:52 – What’s one book that you’d recommend to everyone? – The Everything Store, Hatching Twitter and other company biographies
    • 19:28 – Jilliene thinks it depends on what stage your company is in, when she was still starting out she liked Do More Faster
  • 20:36 – What podcasts do you listen to? – Jilliene is more of a visual learner rather than auditory and enjoys reading more
  • 21:49 – Email Jilliene and check out their website
  • 22:00 – End of today’s episode

3 Key Points:

  1. Set your expectations for the type of business you will create—accept that it’ll cost you time and money.
  2. As your business grows, so do you as a person and CEO.
  3. Be clear on your priorities, take care of yourself, and be a lifelong learner.

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Disclaimer: As with any digital marketing campaign, your individual results may vary.

Full Transcript of The Episode

Show transcript
Jilliene Helman: You know when there's regulatory change, there's usually a big opportunity to grow and build a business around it and that's what I did. I quit a few months later and decided that I was going to build a real estate crowd funding business.

Announcer: Do you want to impact the world and still turn a profit? Then you're in the right place. Welcome to Growth Everywhere. This is the show where you'll find real conversations with real entrepreneurs. They'll share everything from their biggest struggle to the exact strategies they use on a daily basis. If you're ready for a value packed interview, listen on. Here's your host, Eric Siu.

Eric Siu: Before we jump into today's interview, if you guys could leave a review and a rating, and also subscribe as well, that would be a huge help to the podcast. If you actually enjoy the content and you'd like to hear more of it, please support us by leaving us a review and subscribe to the podcast as well. Thanks so much.

All right everybody. Today we have Jilliene Helman, who's the CEO of Realty Mogul, which is an online market place offering crowdfunding for real estate investing opportunities. Jilliene was also named to the 2015 Forbes Under 30 List, and she has a whole list of other accolades, but I'll let Julliene talk about them. Jilliene, how's it going?

Jilliene Helman: Going great, thanks for having me on.

Eric Siu: Yeah, thanks for being here. Why don't you tell us a little bit more about who you are and what you do?

Jilliene Helman: Sure, so you mentioned I'm the CEO of Realty Mogul. I came out of a banking and real estate background and always knew that I wanted to be an entrepreneur, so Realty Mogul was my first company and the first venture backed company as well, that I've run and grown. We are an online market place for real estate investing. We connect investors who want to invest in real estate, with commercial real estate investment opportunities, and we allow those investors to do everything online. They can do due diligence on investment opportunities online, review all the materials and then complete the entire transaction online, from legal documentation to funding, and then also they have access to an investor dashboard, to see how their investments are performing over time.

Eric Siu: How did you come up with this idea?

Jilliene Helman: You know I was working in banking at the time and my boss at the bank asked me to look into a new regulation called the Jobs Act. That was the regulation that really legalized this concept of crowdfunding for investments. Crowdfunding for donations existed, like Kickstarter and Indiegogo, but true investments, that wasn't legal yet in the US. I got my hands on this piece of legislation and just thought to myself, there's a huge opportunity here. When there's regulatory change there's usually a big opportunity to grow and build a business around it, and that's what I did. I quit a few months later and decided that I was going to build a real estate crowdfunding business.

GE 209 Jilliene Helman Page 2 of 9 Eric Siu: Got it, and so when you quit, I mean you're going all in on this, were you scared?

Jilliene Helman: You know, you're always scared, right? I think that anytime that you make a big decision in life, even though you have conviction and you know in your gut that it's the right thing to do, there's still absolutely an element of fear and you just have to get over it.

Eric Siu: Got it. Great, so what, I mean we can dive into some numbers real quick. Do you have any case studies? Let's say what's kind of the average return for someone that has a low risk tolerance versus high risk tolerance, if you're looking to start with this?

Jilliene Helman: Yeah, so we have a variety of different types of transactions that we do. No investment is ever guaranteed, right? First and foremost there's real risk in real estate investing. There's risk in stock investing, bond investing. Anywhere you invest there's going to be risks. We offer a couple of different products for different types of investors.

For investors who are more focused on income, we actually have a REIT, which is a real estate investment trust. That is a vehicle where you can pool together a variety of different commercial real estate investments and get diversification to a bunch of different transactions. In that vehicle, for example, we just declared our ninth consecutive 8% annualized distribution. We've paid 8% in that vehicle.

You can contrast that to an equity transaction for example, where you're buying a share, in say an apartment building, and you're going to get any of the income, after expenses, that comes from people renting that apartment unit. We've had transactions where we've underwritten and were looking for cash flow in the early days, when you're holding the property, but then when you go to sell the property, assuming there's some appreciation, which is a huge assumption. There's always risks. We've had transactions that have been over 15% returns. It really runs the gamut, depending on how much risk investors are willing to take.

Eric Siu: Right. Okay, awesome. You have raised a total of 45 million dollars over five rounds, so what kind of numbers can you share around the business today?

Jilliene Helman: Yeah, so the 45 million was venture capital, so we use that venture capital to operate our day to day business. We don't use that to invest in underlying real estate. An underlying real estate, our investors on the platform have invested over 265 million dollars. We have 110,000 registered investors on the platform. The underlying value of the real estate is over a billion dollars, so in many transactions that we do, there will be both debt and equity. We're not necessarily both. We might bring in a bank to do the debt and we might finance the equity. Our investors have invested 265 million in properties worth over a billion dollars.

We've returned back to investors over 60 million dollars in capital, so my philosophy on the business was always, it's great to take in investment dollars but

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we really have to prove ourselves by sending money out. How quickly can we get money out of the system? We've had zero principal loss from investors, so no investors made, you know, has lost money with us. There's still risk in every transaction but I think we're really proud of our track record. We've invested in 330 properties around the country and we're really proud of what we've built.

Eric Siu: Is this pretty flexible? Can people jump in and out of the, pull their investments in and out as they please or do they have to leave it in for a certain period of time?

Jilliene Helman: It's really not flexible. We're not liquid the way that like the stock market's liquid. We are not. Investors really are looking for long term. It's a long term hold. Think about real estate. It's not like you sell buildings every day. You hold them. You operate them. It's not liquid and that's, I think one risk for investors, is if investors really want liquid cash, it's a lot easier for them to either keep their money in cash or put it in stocks, which are liquid. These are all illiquid investments.

Eric Siu: Right. Okay, great. How did you, since we talk a lot about marketing on this podcast, how did you go about acquiring, let's just say your first 1,000 customers?

Jilliene Helman: You know we got some really great press in some early start up type blogs, Geek Wire and stuff like that, from pitch competitions, so I was out and I was doing Angel pitch competitions to raise money for the business. We got some interesting press around the pitch competitions and we were one of the companies in the pitch competition, and then I went on to win a bunch of pitch competitions, so it was really some press and pitch competitions was what kicked off the business.

Eric Siu: Wow, awesome. Okay, cool, so then press and what's sustaining the growth right now? What's working in terms of customer acquisition nowadays?

Jilliene Helman: We're really, our marketing goal is to be omnipresent. We do all the traditional online stuff, Google, Bing, Facebook, Search Engine Marketing, digital advertising, all that good stuff. We spent a lot of time and energy on SEO, so we've written probably close to 500 blog posts now and those tend to be all educational, to drive ... I mean really two fold. One, I'd say the primary objective there is really to educate our consumer because we want people to be educated about real estate, and then two is to drive SEOs, when people are searching for real estate terms on Google, we'll populate through our educational content. Then we also do offline stuff. We do a lot of events. We meet, all of the real estate companies that we do business with, we meet in person still. Those offline events help us a lot on that side of our business. We're a two-sided marketplace because we've got investors on one side and real estate companies on the other. We use a lot of live events for those real estate companies, which has been great. We're omni channel and our goal is to be omnipresent.

Eric Siu: Great. Sounds like things have been going fantastic, and as we all know, when you grow a business, well there's a lot of struggle. What's one big struggle you've faced while growing the business?

GE 209 Jilliene Helman Page 4 of 9

Jilliene Helman: I think that it's two-fold. It's like you always need more time and it always costs more money. I don't think as a first time CEO, when I first started the company, that I realized just how long it takes and just how much money you're going to need. Thankfully, we raised a lot of venture and we're in a very, very regulated space, so we own a broker dealer. We operate two investment advisors. We operate a lending company. We've got a lot of infrastructure that we had to build, specifically being a FinTech company. I think that the regulator and the infrastructure's a lot more owneress when you're FinTech, but I think that it's just controlling your mind when things take longer and cost more money than you expect them to be. There's so many examples of that.

It took us a lot of money to figure out what marketing channels are going to work. It took us a lot of money to figure out where's the best source, what's the best type of real estate that we want to be investing in. In the early days of our business we were doing investments in residential properties, and we decided over time, this isn't going to be as scalable and as a good of a risk reward for our investors as investing in commercial properties. We stopped investing in residential. There's things like that where you make tough decisions and really, it's you always need more time.

Eric Siu: Awesome. You know what's interesting, before we actually started, I spoke about how we actually talked a couple years ago and you've always struck me as someone that's kind of a no BS, straight to the point, you're a hustler, right? What I'm detecting from our conversation here is it feels like you've become a lot more, kind of let loose a little more. Is there a story behind that? Do you agree with that sentiment?

Jilliene Helman: Yeah, I think that you evolve as a CEO. You're a very different CEO when you have ten employees and when you have 70 amazing professionals working at the company. From my perspective, we've grown astronomically over the last couple of years. I think we've learned a lot too. You learn that it takes time to get a business going. There are no overnight successes. There's so many examples of, you look at companies like Amazon. They've been at this for decades and they're still barely cutting a profit. When you think about that, there's really no overnight successes and I think that I've grown tremendously as a CEO because you have to when you grow. You can't do the same things that you were doing when it was you and a co-founder in a living room, kicking the company off.

Eric Siu: Yeah, I think it's that and then also, at the same time, it's your attitude has also become, it feels like it's become more light-hearted too. I think you're, it sounds like almost even more forgiving in a sense?

Jilliene Helman: Yeah. We still have really high expectations, I think at our company, but I think that what you realize over time, as you build the business is, as long as you've got everyone rowing in the same direction, and as long as you're planting the seeds, you have to believe that those seeds are going to grow. Same thing if you're planting a tree, you stick a seed in the ground and you believe that that tree is going to grow, so you leave enough feet around where you put that seed in for that

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tree to grow in. It's the same concept where we've planted a lot of seeds in the early days of our business. We've now seen a lot of the fruit of our labor, which has just been fantastic, and I think that's that lesson around, you have to constantly believe that it's going to happen and you have to create enough space to allow it to actually happen.

Eric Siu: Great. I was actually watching one of your YouTube videos, where you're on TV and you were talking about how you wanted to get into real estate because it's something that you talked about at the dinner table all the time growing up. I'm curious. What drives you because you just seem like a very go, go, go person?

Jilliene Helman: Yeah I love learning. I really enjoy learning. I'm an avid reader. I love learning from others, so I try and surround myself with really high quality people, who are experts in their domain, and absorb as much as I possibly can from them. I'm a big believer in personal growth. I'm a big believer in there's always something to learn and there's always somewhere to improve. I think that that helps drive me. When you think about purpose in life, how do you be the best version of yourself? That's one purpose. How do you take that best version of yourself to impact others in a positive light?

For me, that's around coaching, working with a lot of our team members to give them exposure to things that they otherwise wouldn't have exposure to. Working with folks who get to take on more than they wouldn't be able to take on if they didn't work for a start up. There's a lot of examples of people in our company who have said to me. "You know, I never would have been able to do this if I was at XYZ company or XYZ big company, and you've given me the opportunity to learn a new skill set." It could be good or bad. They could learn a new skill set and love it, and they could try something new and go, "I really don't like this and this really isn't for me." Either way that's fantastic because they've learned from it. That growth is really, really important to me.

Eric Siu: Great, okay. What's one big change you made in the last year that impacted either yourself or your business in a big way? For example, you could admit that you went to Soul Cycle and it changed your life.

Jilliene Helman: It's not quite Soul Cycle but we're going to go off on a super tangent here. I think that the, I think of my life very linearly. I'm actually, I tend to be a linear thinker and when I think about priorities in life family is number one, health is number two and the company is number three. Maybe that's strange for a CEO to say publicly that their company is not their number one priority, but in reality mine is family, health and company. Health is the one that I actually want to talk through.

I think the single biggest change is optimizing micronutrient levels, so what does that mean? Everybody's body needs vitamins and minerals and amino acids to survive and to function. I have now started really honing in on that and figuring out, okay am I getting enough Vitamin D? Am I getting enough Vitamin B? Am I getting enough Vitamin K, and really thinking about why types of foods do I need to eat in order to optimize those? Provides greater energy, it provides greater clarity, so I've

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been very focused on optimizing micronutrient levels.

Eric Siu: What kind of food?

Jilliene Helman: That may sound very, very dorky but that's the truth.

Eric Siu: I love it, but what kind of food are you eating? I'm sure, like for you, it's like you know exactly what kind of food. Do you stick to a regime or are you always changing up your diet?

Jilliene Helman: Well it depends. I'll take a micronutrient test about once every quarter, so every 90 to 120 days and it depends. Sometimes I'm deficient in Vitamin K. Sometimes I'm deficient in Vitamin B. It just totally depends. Long and short of it is green leafy vegetables. At the end of the day, most Americans don't consume enough green leafy vegetables, so kale and spinach and all that good stuff.

Eric Siu: Okay. I've actually never gotten tested before, so where do you go get tested for that?

Jilliene Helman: There's a place in Los Angeles, in Hollywood, called Next Health, which is where I go, but I'm sure that you can go to any doctor and say, "Hey, I want to test my micronutrient level." It's a simple blood test. They take blood and you get your results a couple days later.

Eric Siu: Got it. The interesting thing about this podcast is it's about growth in respect to marketing, but I think, you know I also talk about personal growth a lot and I think this is important because if you don't have your health, you don't have anything. I think it's important for our people to at least, if you've never heard of this stuff, maybe Google it and look into it a little more because honestly, how are you going to be able to crank out 100% if you're not healthy.

The other thing I wanted to talk about, I mean you and I touched upon dinners and having, meeting with like-minded people, other entrepreneurs perhaps, or even creative in some senses, how's that, like you attending these dinners or you're hosting these dinners impacted your life?

Jilliene Helman: Yeah, I think that meeting interesting people is a source of energy for me. There are two ways that energy works in the world. It can be a source of energy or it can be sucking or taking of energy. I find for me, that meeting interesting people who are committed to growth and who are doing really cool, interesting things is a source of energy. I've met some fantastic people. When you're surrounded by other CEOs or other people who are in your profession you learn. You can learn new ways of doing things. You can learn new marketing channels that maybe you didn't try. You can learn how best you help motivate people. How best do you create career ladders for people on your team, so tremendous amounts of growth. Also, it's helpful, as a CEO, to realize that other CEOs are also dealing with some of the same challenges, whether it's raising capital or hiring new talent, or figuring out other ways the business could grow in scale. We're all, as CEOs, dealing with that. We're

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all dealing it in different ways and the intensity of it may be different, but it's helpful to know that there's a community around you and there's folks around you that are going through it, and can also help you.

Eric Siu: Yeah, couldn't agree more. What's one new tool that you've added in the last year that's added a lot of value? For example, DropBox.

Jilliene Helman: I think, this is probably more on the personal front of it. We've been on DropBox and you know, I think the infrastructure from our company has been pretty fantastic, but I think that, I would say personally it's journaling. I journal every day now and it helps me to check in with myself, figure out how I'm feeling about the business, where I think we should go. I do a lot of my own strategic planning in my journal and it's a stream of consciousness. It's not structured. It's just for me. I don't intend for other people to read it but it helps prepare me for my executive team meetings. I will, before an executive meeting every week, go back and read my last week of journaling and then come back with thoughts or ideas, or questions or things of that nature. That's been really, really impactful on me and I think helping me to be a better CEO.

Eric Siu: Interestingly enough, I, couple years ago, I used to think journaling was very rah, rah, like oh I don't need it, blah, blah, blah, but after listening to another podcast then I was like, "Oh you should check out the five minute journal," and I actually started using that and it's had a major impact, I mean mine's fairly simplistic. It's just a couple of things. It sounds like yours is a little more involved, but massive impact. I highly recommend it. If you want to start journaling, maybe start with a five minute journal and then you could start to have a blank journal and fill that out. What time do you fill out your journal, is it before, end of day or both?

Jilliene Helman: I'll sometimes journal twice a day. My practice is in the morning, so in the morning before I go to work, I've got pretty dedicated morning routine, so I rarely miss it in the morning, but if I've got a busy day and I want to kind of decompress at the end of the day, I'll journal when I get home at night as well, and just kind of share with myself, again this isn't meant for anyone else, but how did the day go, what could I have done better, what are things that I'm thinking about, what am I worried about, what's keeping me up at night, because I feel that when you get it on paper and you sort of get it out of your mind, you can allow your mind to rest, to get back to a place of equilibrium so you can go back the next day and do it all over again. If you don't give yourself that rest because you can't get stuff out of your mind, it becomes a lot harder to be at your best.

Eric Siu: Love it. Okay, well what's one must read book you recommend to everyone?

Jilliene Helman: This is the hardest question for me. I read so much. One of my favorite books is The Everything Store, which is the story of Amazon. I really, really like company biographies. They're just kind of the style of book that I've gotten really into. Hatching Twitter is a great book. There's an amazing book by the Container Store CEO. I've read the Starbucks CEO book. I've read the Happiness book by the Zappos CEO. Tools of Titans is another great one, which is the new Tim Ferris book, but I

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read veraciously that it's so hard when people ask me my favorite book or what I recommend. I think part of it depends on what stage you're in.

If you're truly really, really early stage and you're just getting started, there's different books than I think if you are growing a company or nearing 100 employees or like the challenges are different. I'd say like in the very, very early days my favorite book was Do More Faster, which is the tech star's book about how to get a company off the ground and pitfalls and all those kinds of things. Now, I really like reading books more about how people created the vision of their company and how people created the culture of their company, and how people grew exponentially, so it just depends on stage but those are some of my favorite books.

Eric Siu: Yeah, I think that's the most important point anybody has made on this question, on over 250 interviews that I've done so far. The fact of the matter is yeah, everyone's at a different point, different chapter in their life. People, especially on Instagram, for example, people are always comparing their chapter one to somebody else's chapter 25, and it just doesn't work that way, so I think that's a really good point. People need to be writing books for people, or not writing books, if they're going to do a blog post, less the books, it should be for different stages. I totally agree with that.

Since you're such a big learner, I'm sure you listen to audio books, podcasts, things like that. What else do you listen to. What do you listen to in terms of podcasts, I should ask?

Jilliene Helman: I actually listen to few podcasts. I'm a better visual learner than I am an auditory learner.

Eric Siu: Okay.

Jilliene Helman: I just know that about myself, so I don't listen to a ton of podcasts.

Eric Siu: Any documentaries?

Jilliene Helman: I've seen a lot of documentaries but I don't have much time to watch television these days, to be completely honest, so I can't ... The last documentary I watched was the Jonathan Gold documentary, about food in Los Angeles, which was sort of interesting. I thought it could help inspire some new food choices, but nothing that I've watched that frequently.

Eric Siu: Do you feel like sometimes if you're watching TV, like a Netflix or movie or something like that, do you feel guilty and do you feel like you should be getting back to work?

Jilliene Helman: I don't know that it's that I feel guilty. I would rather just read. Again, I'm a big reader and I watch TV occasionally, but I just find that I enjoy reading more than watching TV. It helps actually relax my brain more because I have to focus to read

GE 209 Jilliene Helman Page 9 of 9 and when I'm watching TV I'll just be thinking about other things and not focusing, and so I don't even get the relief or the relax from it.

Eric Siu: Got it. Okay, cool. Well this is incredibly good and incredibly more efficient, so Jilliene what's the best way for our people to find you online?

Jilliene Helman: You can email us at [email protected], for any emails and online we're

Eric Siu: All right. Thanks so much for doing this.

Jilliene Helman: Thank you.

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