6 Go-to-Market Lessons from LODAS Markets’ Alternative Investment Marketplace Journey

Building a marketplace is hard. Building one in a highly regulated industry where billions of dollars trade hands is even harder. In a recent episode of Category Visionaries, LODAS Markets CEO Brian King shared invaluable insights from transforming the alternative investment trading landscape. Here are the key go-to-market lessons that emerged from their journey.

1. Start with a Personal Pain Point That Scales

The most compelling products often emerge from personal experience with industry problems. For Brian, watching family and friends struggle with illiquid investments revealed a systemic issue: “I had a lot of family members and friends that were trapped in illiquid investments. And in some cases, the outcome was a total nightmare. They wanted to sell, but there just was no way out.” This personal connection to the problem helped identify a market need that extended far beyond individual cases.

2. Leverage Domain Expertise to Build Trust

In regulated industries, deep domain expertise can be a crucial differentiator. Brian’s background in building successful exchanges like Bats Markets and Bats Europe provided the credibility needed to raise capital and attract early adopters. As he notes, “I spent most of my career building marketplaces, and then today we are a marketplace for alternative investments.” This expertise wasn’t just about understanding the technology – it was about knowing how to build liquid markets from scratch.

3. Solve the Supply Side First

While many marketplaces focus on demand, LODAS Markets discovered that supply was their critical challenge. “The biggest initial hurdle that we had was being able to get supply. That means the people that are looking to sell, largely that hurdle for us was just getting people to know that we exist,” Brian reveals. Their solution involved building relationships with financial advisors and creating technology that made it easy for advisors to onboard clients looking to sell.

4. Use Technology to Remove Industry Friction

In traditional industries, technology can be a powerful differentiator. “We’ve made the process incredibly simple. Literally, somebody can set up an account in less than five minutes. But it’s all done through technology, which I think if you look back, even just three years, nothing was done with technology in this space,” Brian explains. This technological approach not only improved user experience but also created a scalable distribution channel through financial advisors.

5. Build for Institutional Requirements First

LODAS Markets found success by focusing on institutional buyers’ needs early. “The institutional buyers that we have, they have a very specific appetite, meaning that in many cases, they have reserved or earmarked several million dollars for a specific product or asset class,” Brian shares. This strategy helped solve the chicken-and-egg problem by creating concentrated pools of buying power that attracted sellers.

6. Choose Market Structure Carefully

Rather than building a traditional broker-dealer platform, LODAS Markets opted to become an Alternative Trading System (ATS). This strategic choice positioned them uniquely in the market, with Brian noting they function “a lot like a stock exchange. It’s just a stock exchange for real estate.” This infrastructure decision helped differentiate them in a space where “there aren’t many competitors.”

The results speak for themselves. With between one and two billion dollars represented on their marketplace, LODAS Markets has demonstrated that bringing modern exchange technology to traditionally illiquid markets can unlock significant value. Their vision extends beyond just creating a trading platform – they’re working to break down the silos that currently segment the alternative investment market.

For founders building in regulated industries, LODAS Markets’ journey offers a masterclass in strategic market entry. By combining deep domain expertise with modern technology, focusing on supply-side challenges, and building for institutional requirements, they’ve created a platform that’s transforming how alternative investments are traded. As Brian puts it, “unlocking that liquidity is going to help this marketplace grow.”