3 Ways To Invest In Alternative Platforms Like A Pro


With savings accounts and bonds paying historically low yields, savvy investors are increasingly following Wall Street into alternative assets. Whether it’s Lending Club and Prosper in consumer lending, Realty Mogul and Fundrise in real estate, or Wunder Capital and SunFunder in solar, online financing platforms are leading the way in providing investors direct access to the double digit annual returns that banks have been enjoying for years. So how is a thoughtful investor to navigate this new landscape of alternative investing options? Here are three key filters to sift through the alternative investment noise:

1. The worst case scenario

Given today’s tumultuous capital market outlook, evaluating an investment’s downside protection is a critical task for an investor exploring alternative platforms. In the case of consumer or commercial lending, for example, you’re counting entirely on a consumer or business to repay. If they can’t a default results in a 100% loss. With real estate and solar investing however, assets are typically transferred to the lender if the borrower defaults. Real estate backed loans historically recover 60-70% of their value even in the case of default, and SolarCity has shown an 80% recovery value for solar systems in default. When we experience our next downturn these asset backed investments offer significant protection against loss of principal.

The other dynamic to consider is the ease of diversification. As we know, diversification is the only free lunch in investing, and some platforms make building a diversified portfolio significantly easier than others. Platforms like Lending Club and AngelList have added diversified investment options after starting with only single investments, while real estate platforms have continued to focus largely on project-by-project financings, increasing the burden for the investor to build their own diversified portfolio and often complicating their taxes.

2. Don’t pick up Wall Street’s scraps

As we’ve seen again and again, alternative investing platforms move their customer focus from individual investors to institutional investors as they mature. This is a natural consequence of institutional investors’ ability to inject enormous amounts of capital into alternative investing platforms, however some platforms allow that pendulum to swing too far to advantaging institutional investors at the expense of individual investors. The most prominent example of this is the way institutional investors algorithmically cull the financing opportunities on Lending Club and Prosper before those loans are ever available to individual investors. In effect, those platforms are offering individual investors the scraps of Wall Street. Investors should instead ask hard questions of alternative investments on how their platform or approach unlocks an underserved market, and thereby delivers outsized returns for undersized risk. For example, today’s software allows dozens of individual investors to profitably make, real estate, factoring, or solar investments that would have been cost prohibitive just a decade ago.

3. Evaluate both the company and the investments it offers

Along with a surge in investing innovation comes the need to confirm that new platforms are credible and protecting investors appropriately. A good place to start is the platform’s website, where team, company, and press details should be available. A particularly helpful data point in this analysis is if the company has the backing of strong venture capitalists firms, as they perform a robust legal and regulatory analysis of the investment platform before investing. Finally, investors should carefully review the contingencies prepared in the case of the supporting company failing. In particular, the questions of how easily a portfolio can be transferred and whether the costs of servicing the portfolio are built into the investments themselves. For example at Wunder Capital, we build a 1% loan servicing fee into every solar loan so that any loan portfolio service provider can perform that function once an investment has been made. Making sure that the company backing the platform has been evaluated by institutional investors, has the right team to tackle their market, and have built transferability and servicing costs into their investment from the start will ensure that investors exploring alternative platforms construct a winning portfolio.

About Wunder

Wunder Capital is a financial technology company that provides financing to solar projects throughout the country. Based in Boulder, Colorado, Wunder allows accredited individuals, trusts, family offices, foundations, hedge funds and pension funds to invest in the country’s new solar infrastructure. Wunder was founded in 2013 and won the U.S. Department of Energy’s 2014 Sunshot Challenge, the COSEIA’s 2015 Summit Award and was the first solar technology company to complete the prestigious Techstars technology accelerator program. Wunder is backed by some of the best venture capital firms in the country; Techstars Ventures, Fenway Summer, FinTech Collective, and LaunchCapital. Wunder’s software-based approach is dedicated to removing logistical barriers and high costs from solar investing, passing the savings on to investors and borrowers. Visit WunderCapital.com.


Wunder Capital is a financial technology company that provides financing to solar projects throughout the country. Based in Boulder, Colorado, Wunder allows accredited individuals, trusts, family offices, foundations, hedge funds and pension funds to invest in the country’s new solar infrastructure. Wunder was founded in 2013 and won the U.S. Department of Energy’s 2014 Sunshot Challenge, the COSEIA’s 2015 Summit Award and was the first solar technology company to complete the prestigious Techstars technology accelerator program. Wunder is backed by some of the best venture capital firms in the country; Techstars Ventures, Fenway Summer, FinTech Collective, and LaunchCapital. Wunder’s software-based approach is dedicated to removing logistical barriers and high costs from solar investing, passing the savings on to investors and borrowers. Visit WunderCapital.com.

« | »