Adobe Stock/Maks_Ershov

According to the San Francisco Chronicle, RealtyShares, a San Francisco-based a real estate crowdfunding firm that was started in 2013, has laid off most of its staff and will no longer seek new business. It will continue to manage existing deals with the skeleton crew still left. The company's website connected would-be investors with commercial real estate projects including apartment buildings and hotels, anywhere in the U.S.

It raised $58 million in venture capital from leading firms including Menlo Ventures, General Catalyst and Union Square Ventures. But in a note to investors Wednesday, it said it was “unable to secure additional capital” to fund its growth. “As a result, we will not offer new investments or accept new investors on the RealtyShares platform.” In an email, the company said it will continue to service existing investors and deals “through a combination of vendor and in-house resources.”

A year ago, RealtyShares had about 100 full-time employees, said Nav Athwal, who founded the company and was its CEO until last November and a board member until the summer. Before its latest round of layoffs, it had 75 employees and contractors, the company said. It retained a team to handle existing investors and about $400 million of assets under management, but it would not say how many.

RealtyShares was part of a cohort of companies that sprang up in response to the Jumpstart Our Business Startups Act in 2012. The measure created exemptions to the securities laws that let private companies raise money over the internet and social media. One provision let privately held companies raise relatively small sums from any individual investors. Another made it easier to raise larger amounts of money from accredited investors — those who meet certain income and asset requirements — by letting them advertise deals online, said Douglas Ellenoff, a New York City attorney with Ellenoff Grossman & Schole.

Read More