Why do startups report results? Is it braggadocio? Attention-seeking? We can’t speak for all of our peers, but it’s a fair question, especially since we periodically report results ourselves, as we are today for the first quarter of 2016 while also sharing perspective on news of our first quarterly rate cut.

In the case of Groundfloor, public reporting is matter of accountability. On one hand, our financial and operational details are a matter of public record, in compliance with federal and state regulatory requirements. That is a price of being the only issuer authorized by federal and state governments to open up previously private real estate finance markets to the public.

But on the other hand, we also share more than the law requires. Why? We’re more accountable than the minimum due to the nature of our enterprise. At Groundfloor, thousands of investors entrust a part of their portfolios to borrowers through us. Our borrowers count on Groundfloor to deliver capital quickly, reliably and cost-effectively. Many potential investors and borrowers watch from the sidelines, deciding whether and to what extent they can trust this new world of finance. You’re all a part of this startup’s journey, and you deserve to know how it’s going.

The first quarter of 2016 was a very good one for Groundfloor--our lenders, our borrowers and the company alike. Armed with our Series A financing, we’ve added staff to every part of the company. The results are already showing. This quarter we offered a record number and dollar volume of loans, while also seeing corresponding record levels of investment.

More specifically, here are some facts and figures for Q1:

  • Lenders invested $2.8 million in 25 loans offered by our borrowers

  • 700 investors participated in at least one loan, lending an average of $1,300 per month

  • Investors funded loans in an average of 281 minutes, investing up to $2,800 per minute during peak periods in March

  • Borrowers repaid 11 loans worth over $700,000

That is very healthy growth across the board. Behind the scenes, we continue to build systems, processes and policies to enable Groundfloor to grow even faster while maintaining tight controls over loan quality and servicing. We’re pleased that those efforts are bearing fruit more quickly than expected.

Now, on to the second part of our news: Our first quarterly rate cut. With all of the progress, no loss of principal on any loan we’ve made to date, and so much demand to participate, we decided now is the time to start reviewing rates on a regular schedule. This first reduction will save our borrowers an average of $500 to $2,500 per loan, but this is more than a change in pricing. It’s actually the advent of a dynamic Nick and I first envisioned three years ago when we started Groundfloor.

Just as the best investors don’t need or want to give up control only to pay Wall Street’s high fees or earn the banks’ low rates, the best real estate entrepreneurs deserve a better deal for their projects than the status quo currently offers them. How do we know? The Internet is speaking, voting with its investment dollars and loan applications. Freed from the unnecessary impedance of Big Finance, we are seeing the beginning of an inexorable march to lower the cost of capital.

That’s obviously a win for borrowers who get to pay less for the money funding their projects. Perhaps counterintuitively, however, rate reductions also deliver for investors. On average, Groundfloor lenders earn an annual rate of 13.7 percent on loans that last just seven months. Unlike any other real estate investment product available today, our lenders choose what they earn, on what term, with what level of risk. Within each grade, as more and better borrowers are drawn in, choice and opportunity to diversify grows. Finance theory teaches that greater choice and better diversification yield higher risk-adjusted returns.

So: More choice and a bigger slice of the pie for everyone -- except those who’ve historically run the show. What else would you expect from the Internet?

As Nick says in our press release, “this is just an opening salvo.” It is a salvo that a precious few may notice today, but we believe will someday be recognized for the important moment it is. We appreciate you who are here with us in the fray, and we love hearing from you. Write us with suggestions, encouragement, ideas or critique at founders@groundfloor.us.