From Real Estate to Racehorses -
The Crowd Gets A Cut
How fractional ownership is shaking up the crowdfunding space.
Most people think “crowdfunding” means investing in startups. You know the type—toss in $100, cross your fingers, get some equity—and maybe a tote bag.
But there’s a newer crowdfunding trend that’s been picking up steam: fractional ownership of assets.
It’s a form of crowdfunding, but instead of owning a piece of a company, you’re owning a piece of a thing—a building, a painting, a racehorse… even a lawsuit.
And this isn’t about investing in a fund, ETF, or other pooled collection of property. It’s a direct ownership interest in a specific, single asset, alongside a bunch of other investors.
How It Works (and Why It’s Not Just Crowdfunding 2.0)
Most traditional investment crowdfunding deals (especially under Regulation CF) are about funding operating companies—startups or small businesses trying to grow.
But if somebody wants to sell shares of a single asset—a painting, a property, a barrel of whiskey—they run into a problem: that “operating company” requirement normally means being a typical business selling goods or services.
And that usually DOESN’T include just owning an asset and hoping it’ll rise in value.
That’s where Regulation A comes in.
Reg A allows issuers to raise up to $75 million a year and doesn’t necessarily force the issuer to operate in the traditional sense. That’s why most fractional asset offerings happen under Reg A, either as a standalone asset or via something called a Series LLC (more on that in a sec).
You also see fractional asset raises happening under Regulation D.
In fact, this type of raise got its start in Reg D, for the most part on the real estate side.
But since—most of the time—investors need to be accredited to get in on Reg D offerings, and since many folks AREN’T accredited, we’ll mostly focus on the Reg A flavor of fractional asset sale for purposes of this discussion, as well as a few exceptions that have been able to squeak in under Reg CF as well.
Wait, What’s a Series LLC?
A Series LLC is a legal structure that lets a company split itself into mini-companies, each holding a different asset.
So you might have “AssetCo Series 1” for a Miami condo, and “AssetCo Series 2” for a Banksy. Same parent, different deals. Investors buy into the one they like.
Moreover, that large $75 million per year limit for Reg A comes in handy, because it can be divvied up among the different offerings in the series, leaving lots of room for multiple deals per year under the same filings.
So the Series LLC approach is tidy, scalable, and fits nicely into the Reg A world.
As a result, that’s how most of these fractional asset deals are getting done today.
So What Can You Own A Piece Of?
Here’s a quick tour of some of the asset classes being divvied up by the slice—and who’s doing it.
Real Estate
Real estate is probably the most developed corner of the fractional game. You’re not buying into a giant pool of properties, REIT or fund—you’re buying a chunk of one property or project.
Groups doing this:
- Arrived – lets you invest in individual rental homes under Reg A.
- Redswan – specific commercial real estate deals such as office buildings, multifamily complexes, and mixed-use developments. Note that Redswan only offers projects under Reg D for accredited investors, although investment minimums may still be on the low end.
Fine Art
You can now own a piece of a Warhol without auction paddles or generational wealth. Who wouldn’t want a tiny piece of a Banksy??
- Masterworks is the main player here. They buy high-end pieces, file a Reg A offering for each one, and let investors buy shares.
Race Horses
You can now tell your friends you co-own a thoroughbred.
- MyRacehorse offers fractional stakes in racehorses, often with perks like track access or owner updates. The group has had some notable wins, including the 2020 Kentucky Derby and the 2024 Preakness! Their offerings are done via Reg A, as well as Reg D.
Collectibles
Vintage cars, sports cards, a copy of the Declaration of Independence—you name it.
- Rally and Collectable are both platforms offering shares in individual collectibles. They use Reg A filings for each item or series.
Movies
Own a slice of a film, from script to screen.
- Angel Funding is a Reg CF funding portal that has worked with producers of wildly successful family-friendly projects such as The Chosen. They tend to focus on supporting uplifting movie and television projects.
- CineBlock is a new funding platform that’s on our radar (we know the founders). Like Angel, they’ll be using Reg CF to capitalize projects, which as far as we know will be general interest fare.
Issuers here are able to use Reg CF instead of Reg A because film production companies are considered operating companies. Not much difference here from an investment standpoint, but it makes for a more streamlined experience for the issuers.
Music Royalties
Ever dreamed of owning a piece of your favorite song? With fractional ownership, that dream is becoming a reality.
- SongVest offers “SongShares,” allowing fans to purchase fractional ownership of music royalties through SEC-qualified Regulation A offerings. Investors can earn quarterly royalties from their share of the song’s earnings.
Athlete Future Revenue Streams
Wall Street sports fans have been hacking away at finding a path for investors to invest in the careers of their favorite athletes for years. Imagine what it would be like to buy a cut of your favorite rookie’s future earnings.
- No Reg A or CF offerings currently active.
- But last year, Denver Broncos linebacker Baron Browning sold shares of his future earnings through the platform Vestible under a Reg A deal. Vestible’s website is promising more deals are on the way!
When this model is fully realized, it will take fantasy sports to a WHOLE new level!
Barrels of Spirits
Whiskey and other spirits gain value while they age. And some investors want in.
- No Reg A or CF platforms or issuers are doing this (yet).
- But Reg D groups like CaskX and House of Rare (tequila) are active here.
Litigation Finance
The most niche of the bunch. This is about backing individual lawsuits and sharing in the outcome. Returns COMPLETELY detached from the market! Detached from the ECONOMY, for that matter!
- Most litigation finance is done via funds or Reg D private placements.
- There are no Reg A or CF issuers offering fractional ownership in specific cases—yet. But we’re going to be breaking a story VERY soon that will change all of that.
So What’s the Big Deal?
Fractional ownership is letting everyday investors get exposure to stuff that used to be for insiders like art collectors, land developers, and movie producers.
At the same time, it’s created a new way for asset owners to raise cash—without selling the whole thing.
And whether it’s happening under Reg A, Reg CF, or Reg D, this space is growing. Expect more categories, more issuers, and even more surprises in the years ahead!
‘Til next time!
Sean Levine
Managing Editor
Disruptor Nation
DISRUPTOR NATION RECEIVED NO COMPENSATION FROM—NOR HOLDS ANY POSITION IN—ANY CROWD ISSUER OR PLATFORM MENTIONED IN THIS ARTICLE.
