At a dozen crowdfunding positions a year, is platform diligence or deal diligence the better use of limited time
A common scoring approach for crowdfunding investors has two halves, and it's worth being honest about which one actually gets filled in properly. The platform half covers things like how many offerings a platform has taken all the way to a realized exit, whether losers are published next to winners, how a sponsor who stops reporting gets handled, and where the platform's fee sits in the stack. That work is slow the first time and nearly free after. Once a platform is scored, every deal that comes through it inherits the score. The deal half is the actual underwriting: rent assumptions, exit cap versus entry cap, the sponsor's realized history on this property type at this size, the waterfall, and the extension options on the debt. That work doesn't amortize. Every deal costs the same three or four hours regardless of how well the platform scored. The case for going platform-first is that the platform is a filter bought once, and at a five figure check size the deal-level hours aren't fully paid for by the position. The case for going deal-first is that a platform's screen says nothing about whether a particular sponsor can hit a stated exit cap on this specific deal, and a platform's overall rating doesn't protect against an individual sponsor's weak track record. At a dozen positions a year, the honest answer is that both halves need real time, but the deal half is where the actual loss risk lives, so it shouldn't be the one that gets shortened when time runs out.
Where does the marginal diligence hour go at a 5k position size?
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