At Inman Connect New York, a group at VCS agreed that every company that wants money needs a leader with the courage to bleed for the company.
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If you want to fund it, you need to have a big idea, some income and especially persistence.
That’s the consensus from a group of venture capitalists who met to discuss how fledgling real estate software innovators can find the money they need to expand.
This group never broached what they were specifically looking for in terms of product type or category (CRM, Transactions, AI Lead Generation), but they all said that every company that wants the money has , agreed that the company needed a leader with the courage to bleed.
Dave Eisenberg, a founding partner at Zigg Capital, said his firm provides “99 no’s for every yes.”
“You’re looking for domain expertise. You’re looking for business founders because they have a reason why they’re the right person for this particular company, and you’re looking for a lot of persistence.” I’m looking for it,” Eisenberg said. “The failure rate for PropTech startups is not zero. You are looking for people to work through Covid to work through a high interest rate environment.”
LMRE founder Louise Dickins agreed.
“We are partnering at a more strategic level with CEOs, COOs, and founders who are resilient and get them through times like the last year. [which] It was particularly challenging. We need to find that gravitas,” she said.
LD Salmanson, CEO of Cele, who chose the title “Maverick Herder”, grew louder when he explained what he was looking for.
“Most VCs, whether they say this or not, look at it in a very simple way: ‘Will this change the world?’ Because it leads to the potential to make a lot of money. ” he said. “They’re looking for founders who can exist in this shit against all odds. They couldn’t give up even if they tried.”
Traction is also important, according to Salmanson. Maybe it’s the aura of excitement around an idea, a growing fan base, or even a powerful, emotional story. But Salmanson said if he didn’t see one of those things, he wouldn’t fund it.
Camber Creek’s Gedion Haddis, who supported Ryan Serhant’s New Technology Company, told the audience how companies can prioritize and define categories in their vision for the future.
“We are focused on fundamental differentiation, scalability and leadership. Similar to Selhant, Ryan’s clear real estate expertise, a very unique platform, and the We saw it as an innovative technology that we wanted to bring,” Hadith said. “That combination really addressed pain points in a rapidly changing environment.”
The panelists’ overall approach to leadership and proof of concept is consistent with findings from the Center for Real Estate Technology and Innovation (Creti).
“Investors increasingly favored companies with robust financials and clear ROI stories,” the center said in its 2024 year-end report. Instead, the focus has shifted to sustainable and scalable solutions with clear ROI. This change is not simply a reaction to economic conditions. This represents the maturation of an industry that has become increasingly sophisticated over the past decade. ”
In short, it’s not a great idea to move forward with it, at least without the revenue to show for it.
Email Craig Lowe
