Episode 620 of Shark Tank features Aaron McDaniel pitching a real estate crowdfunding website TycoonRE.
The website was founded by McDaniel, who was once one of AT&T’s youngest vice presidents, following the JOBS Act in 2012. The act permits non-accredited investors to fund tiny private companies online.
TycoonRE’s crowdsourcing procedure is straightforward. For a quick look at the risk-rated listings, simply visit the TycoonRE website.
The estimated return on investment (ROI) is included in each listing. The TycoonRE team contacts you within 24 hours of clicking on a property you’re interested in purchasing.
All “paperwork” is completed online, and money is transferred electronically.
An L.L.C. that holds title to the property makes you a “partner” in the transaction. Profits are given to “shareholders” after a contract is closed.
TycoonRE is currently active in the burgeoning real estate market in San Francisco. With the support of a Shark, McDaniel hopes to expand into new areas faster.
If you were a Shark, would you be interested in being a real estate mogul?
What Is Tycoon Real Estate?
Tycoon RE is a crowdfunding site for the real estate industry that allows investors to pool their money and finance real estate transactions.
Who Is The Founder Of Tycoon Real Estate?
Aaron McDaniel is the founder of Tycoon Real Estate, who pitched the business to the Sharks to get additional investment to expand the business.
|Company Name||Tycoon Real Estate|
|Product||Real-Estate Crowd-Investing Platform|
|Investment Asking For||$50,000 For 5% stake in Tycoon Real Estate|
|Final Deal||No Deal|
|Episode||Season 6 Episode 16|
Tycoon Real Estate Before Shark Tank
Sharks usually reject proposals because they lack knowledge about the business at hand, and this is common.
Although crowdfunding is a fairly new method of obtaining capital, it has already been applied to various well-established markets.
If the person behind a crowd-funding concept is as energetic as they are, is there an increase in interest in it?
Tycoon Real Estate’s founder and CEO, Aaron McDaniel, experienced businessman.
He was one of AT&T’s most successful business sales managers and one of the company’s youngest regional vice presidents during his ten years.
Two of his books are “The Young Professional’s Guide to the Working World” and “The Young Professional’s Guild to Managing.”.
He also taught leadership courses at the University of California, Berkeley.
He pitched his online crowd-funding real estate business to them in January of 2015, so despite what you might expect, he found out if he was Shark-friendly.
How Was The Shark Tank Pitch Of Tycoon Real Estate?
Aaron McDaniel’s enthusiasm and energy could be seen in the tank before he had even spoken.
The entrepreneur’s energizing entrance into the room drew even the active sharks away.
Aaron’s conversation was as rapid as his gait, which came as no surprise. He stated that he wanted to contribute $50,000 in exchange for a 5 percent stake in Tycoon Real Estate.
When Aaron got on stage, he did it at breakneck speed, telling the sharks that real estate had been shown time and time again to be the safest method of building wealth. There were no dissenting voices among the sharks.
As Aaron highlighted, negotiating a real estate sale can be scary, time-consuming, and costly, and the greatest offers are only available to the well-off.
How can you fault that? However, Aaron wasn’t about to be distracted by Kevin O’Leary’s question.
In a bid to persuade the sharks to join him in a firm that allowed anyone to engage in real estate, even if they only had $1,000 to invest, he informed them he had an opportunity for them.
A quick-thinking businessman like Mark Cuban showed that he was no exception when he said, “I detest it, I’m leaving,” in an abrupt and somewhat unexpected manner.
When Mark made his decision so quickly, the other sharks were taken aback. However, Kevin O’Leary seemed to relish Aaron’s pain.
Aaron appeared to be struggling, but he persisted. His company used internet crowdfunding to finance real estate projects, he claimed to the sharks. All transactions had been reviewed by professionals in the industry.
According to him, the returns investors can expect are at least eight times greater than in a traditional savings account.
Investors could select the type of investment they wanted, whether retail or commercial and indicate exactly how much of their savings they wanted to put into the Tycoon Real Estate website.
The sale would be completed once the financial goal had been met, and anyone could become a real estate billionaire. The Sharks didn’t appear to be very enthused about the possibility.
Robert Herjavec enquired how an investment may get their money back after losing money.
Mark Cuban said, ‘Boom, give that man a cigar,’ as if he felt Robert had correctly pinpointed the most pressing issue facing the company.
Things had not gone well for Aaron in the tank, and he was showing signs of stress as he attempted to answer the question.
His money would be locked up in a property that many other people owned, and Robert pressed him on this. He pointed out the apparent problem of liquidity.
If the investor needed their money back right now, they could only hope to recoup a portion of their original investment by taking a loss.
Although Aaron argued that increasing the size of Tycoon would make it easier to sell the investment, Robert wasn’t persuaded, and the other sharks appeared to share Aaron’s skepticism about the company’s viability as a whole.
Tycoon Real Estate was asked how many transactions it had completed to date by Barbara, who was curious. While Aaron admitted that he had only been involved in one completed transaction, he did so grudgingly.
Inquiring about its value, Barbara pressed him, and he grudgingly revealed that it had been sold for $100,000.
She questioned, ‘Was it a garage?’ before leaving. However, given Barbara’s expression, Aaron probably should have avoided disclosing that the $100,000 had been used to pay for “half of a house” in San Francisco.
Real Estate Investment Trusts, or REITs, were brought forward by Kevin O’Leary. Their service was identical to Aaron’s, except that investors could withdraw their money much more readily without incurring any penalties from these trusts, which often own and operate a large number of buildings, sometimes even hundreds.
However, Aaron delivered the same service at a much higher risk and significantly less access to investor assets.
Aaron didn’t respond well when Kevin made a point because of the pressure or a last-ditch effort to turn things around. Sharks gasped in disapproval when he claimed that ‘REIT’s are not sexy.
As Robert Herjavec questioned Aaron, Mark Cuban screamed “Horrible” repeatedly.
Aaron argued that investors sought a physical and emotional connection to their investment.
Not so, Robert said. He argued that investors prefer to see how their money is spent and advised the distraught Tycoon entrepreneur that the firm was unsafe. That was the last straw for Robert.
When Aaron saw his chances of a deal in the tank were rapidly dwindling, he tried to gain the attention of the remaining sharks, but Mark Cuban promptly shut him down.
The Texan argued that investors’ capital would be permanently tied up with Tycoon, and the business had nothing to offer compared to the advantages of REIT investments.
To Mark Cuban’s ‘To Who?’, Aaron couldn’t explain that Tycoon Real Estate investors may sell their shares after one year.
Lori Greiner took the floor next. She acknowledged that she had no interest in sharing an investment online with strangers she had no control over, and she felt the whole concept of the business was fundamentally broken. With that, Lori was out as well.
No one impressed Barbara Corcoran as much as Lori. Even though Aaron was visibly nervous, she referred to the business as “Spooky.”
She argued that a Tycoon’s irreversible investment would put investors in danger of losing their money. Barbara also bowed out of the project since it was too risky for her to get involved.
Aaron must have known that he would not be offered a deal with only Kevin O’Leary remaining. Mr. Wonderful, on the other hand, had a surprise for him in prepared, even if it wasn’t very nice.
Kevin offered to work with Aaron with his established and well-respected investing brand if the company was willing to change its name to “Kevin’s Investments.”
Kevin went on since Aaron appeared interested. He offered Aaron $50,000 in return for a 50 percent stake in Tycoon Real Estate, but Aaron was not interested.
Incredulous, Aaron refused to give up more than 10% of his company’s stock, saying that was the most he would consider giving up.
As he exited the tank, Kevin told the entrepreneur, who appeared relieved that it was all over, “I’ve got a proven name, I’ve forgotten your name already. less eagerly than when he first entered it.
What Happened To Tycoon Real Estate After Shark Tank?
Aaron may have expected an increase in website traffic following his participation on Shark Tank, but that did not happen.
He claimed that his website failed after receiving 50,000 unique visitors in a matter of hours, but I was able to find multiple references to it being inoperable before his episode.
Aaron’s Tycoon Real Estate brand received only a small number of inquiries from potential investors in the months following the show.
Thanks to Aaron’s already-established competitors, a rescue package arrived in November of 2015.
The business was purchased by a syndicate of five crowd-funding platforms for an undisclosed amount.
After completing their crowd-funded investment packages, the organization sought to prove the sharks wrong and convince investors that crowd-funded real estate is not a risky venture.
Patch of Land CEO Jason Fritton was also excited about the greater industry exposure that resulted from Aaron’s appearance on the show. However, the consortium’s ambitions have not been met as of 2018.
There is no longer a Tycoon Real Estate website. While the company’s Facebook and Twitter profiles continue to generate interest in the market, the company itself is no more than a moniker.
Aaron has taken a new job in the same neighborhood. A smartphone software called Access Investors Network has been developed by him that enables potential investors to browse crowd-funding deals from a wide range of venues in one place.
Aaron’s app doesn’t appear to be making an impact in the fast-growing and frenzied crowd-funding real estate market after less than six months, but I have a feeling he hasn’t given up.
You can hire Aaron as a guest speaker for up to $10,000 per engagement at BigSpeak.com if you’d like to learn from his extensive business experience, although I’m sure he won’t want to dwell on his Shark Tank experience too much.
Aaron had few fond memories of the show in a recent interview. Aaron felt that way because of the sharks’ behavior, no matter what you think about Aaron or his Tycoon Real Estate firm. The
Tycoon Real Estate business was exactly that, regardless of how you feel about Aaron or his business.
Tycoon Real Estate Shark Tank Update
Tycoon Real Estate was purchased by five real estate crowdfunding platforms after the Shark Tank aired: American Homeowner Preservation, Patch of Land, Peer Realty, CrowdFranchise, and EquityRoots – even though the Sharks did not invest.
It was made public only that it was an all-cash transaction, and no other information was disclosed.
Is Tycoon Real Estate Still In Business?
The Access Investors Network, created by McDaniel after appearing on Shark Tank, allows crowdfunding investors to keep track of their contributions.
Tycoon Real Estate was purchased by five crowdfunding sites led by Jorge Newbery of American Homeowner Preservation.