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Jun 30, 2022 · 32m · top-founders

Rockstar Guitarist Launches SaaS, Breaks $3.6m in revenue, $30m valuation

Kurt Avarell · 19m spoken Nathan Latka · 8m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of Conversations with Nathan Latka, Ember co-founder and CEO Kurt Avarell explains how the startup scaled to $3.6 million in revenue within ten months by offering fractional luxury vacation home ownership powered by venture equity, real estate debt, and proprietary software.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 31.5% of the talking time here. How this is scored →

Nathan as informed peer 5.8 Guest teaching 4.0 Guest disagreement 2.0 Nathan pushing back 4.5
05100:0010:0020:0030:000:42–3:58 · Nathan as informed peer 5/10 Kurt Avarell's Background and Transition from Canopy Nathan presses Kurt for ARR figures from his previous startup Canopy, expressing skepticism when Kurt cites strict ongoing NDAs. Nathan rejects relying solely on venture funding numbers as a vanity metric of growth.3:59–8:41 · Nathan as informed peer 5/10 Ember's Fractional Vacation Home Ownership Model Kurt explains the mechanics of the 1/8 fractional ownership model and how Ember acquires inventory. Nathan questions vulnerability to competitors like Blackstone scraping listed prospective properties.8:41–16:09 · Nathan as informed peer 7/10 Scaling Inventory, Capital Strategy, and Debt Financing Nathan demonstrates high domain knowledge comparing Ember's acquisition debt facility with FinTech warehouse facilities and SPVs. Kurt shares their $17.4M equity funding and $20-30M debt leverage structure.16:12–29:12 · Nathan as informed peer 6/10 Commercial Break: FounderPath Valuation Tool Nathan breaks down the unit economics of the 12% markup and $100 monthly platform fee while raising potential liquidity traps for owners trying to resell. Kurt educates him on how selling LLC shares on the MLS bypasses standard mortgage underwriting.0:42–3:58 · Guest teaching 2/10 Kurt Avarell's Background and Transition from Canopy Nathan presses Kurt for ARR figures from his previous startup Canopy, expressing skepticism when Kurt cites strict ongoing NDAs. Nathan rejects relying solely on venture funding numbers as a vanity metric of growth.3:59–8:41 · Guest teaching 5/10 Ember's Fractional Vacation Home Ownership Model Kurt explains the mechanics of the 1/8 fractional ownership model and how Ember acquires inventory. Nathan questions vulnerability to competitors like Blackstone scraping listed prospective properties.8:41–16:09 · Guest teaching 4/10 Scaling Inventory, Capital Strategy, and Debt Financing Nathan demonstrates high domain knowledge comparing Ember's acquisition debt facility with FinTech warehouse facilities and SPVs. Kurt shares their $17.4M equity funding and $20-30M debt leverage structure.16:12–29:12 · Guest teaching 5/10 Commercial Break: FounderPath Valuation Tool Nathan breaks down the unit economics of the 12% markup and $100 monthly platform fee while raising potential liquidity traps for owners trying to resell. Kurt educates him on how selling LLC shares on the MLS bypasses standard mortgage underwriting.0:42–3:58 · Guest disagreement 3/10 Kurt Avarell's Background and Transition from Canopy Nathan presses Kurt for ARR figures from his previous startup Canopy, expressing skepticism when Kurt cites strict ongoing NDAs. Nathan rejects relying solely on venture funding numbers as a vanity metric of growth.3:59–8:41 · Guest disagreement 2/10 Ember's Fractional Vacation Home Ownership Model Kurt explains the mechanics of the 1/8 fractional ownership model and how Ember acquires inventory. Nathan questions vulnerability to competitors like Blackstone scraping listed prospective properties.8:41–16:09 · Guest disagreement 1/10 Scaling Inventory, Capital Strategy, and Debt Financing Nathan demonstrates high domain knowledge comparing Ember's acquisition debt facility with FinTech warehouse facilities and SPVs. Kurt shares their $17.4M equity funding and $20-30M debt leverage structure.16:12–29:12 · Guest disagreement 2/10 Commercial Break: FounderPath Valuation Tool Nathan breaks down the unit economics of the 12% markup and $100 monthly platform fee while raising potential liquidity traps for owners trying to resell. Kurt educates him on how selling LLC shares on the MLS bypasses standard mortgage underwriting.0:42–3:58 · Nathan pushing back 6/10 Kurt Avarell's Background and Transition from Canopy Nathan presses Kurt for ARR figures from his previous startup Canopy, expressing skepticism when Kurt cites strict ongoing NDAs. Nathan rejects relying solely on venture funding numbers as a vanity metric of growth.3:59–8:41 · Nathan pushing back 4/10 Ember's Fractional Vacation Home Ownership Model Kurt explains the mechanics of the 1/8 fractional ownership model and how Ember acquires inventory. Nathan questions vulnerability to competitors like Blackstone scraping listed prospective properties.8:41–16:09 · Nathan pushing back 3/10 Scaling Inventory, Capital Strategy, and Debt Financing Nathan demonstrates high domain knowledge comparing Ember's acquisition debt facility with FinTech warehouse facilities and SPVs. Kurt shares their $17.4M equity funding and $20-30M debt leverage structure.16:12–29:12 · Nathan pushing back 5/10 Commercial Break: FounderPath Valuation Tool Nathan breaks down the unit economics of the 12% markup and $100 monthly platform fee while raising potential liquidity traps for owners trying to resell. Kurt educates him on how selling LLC shares on the MLS bypasses standard mortgage underwriting.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 64.6% · guest 35.4%0:00 · Nathan 64.6% · guest 35.4%3:00 · Nathan 14.3% · guest 85.7%3:00 · Nathan 14.3% · guest 85.7%6:00 · Nathan 27.8% · guest 72.2%6:00 · Nathan 27.8% · guest 72.2%9:00 · Nathan 27.6% · guest 72.4%9:00 · Nathan 27.6% · guest 72.4%12:00 · Nathan 29.6% · guest 70.4%12:00 · Nathan 29.6% · guest 70.4%15:00 · Nathan 42.8% · guest 57.2%15:00 · Nathan 42.8% · guest 57.2%18:00 · Nathan 21.7% · guest 78.3%18:00 · Nathan 21.7% · guest 78.3%21:00 · Nathan 37.4% · guest 62.6%21:00 · Nathan 37.4% · guest 62.6%24:00 · Nathan 18.4% · guest 81.6%24:00 · Nathan 18.4% · guest 81.6%27:00 · Nathan 15.1% · guest 84.9%27:00 · Nathan 15.1% · guest 84.9%30:00 · Nathan 58.4% · guest 41.6%30:00 · Nathan 58.4% · guest 41.6%
Sharpest disagreement ▶ 3:34 Kurt refuses to reveal Canopy ARR

Kurt firmly declines to provide any historical revenue metrics despite Nathan's direct probing, standing his ground on NDA obligations.

 Hardest push from Nathan ▶ 3:41 Nathan challenges startup capital raised metric

Nathan openly questions why an old NDA would prevent disclosing revenue ranges and dismisses total capital raised as an awful metric of business growth.

 Biggest teaching moment ▶ 27:24 Kurt explains LLC share liquidity mechanism

Kurt clarifies that sellers are not bound by co-owners because they are transacting LLC equity rather than real estate, allowing 24-hour closings.

 Nathan holds their own ▶ 14:00 Nathan analyzes debt facility structures

Nathan demonstrates sharp financial acumen by comparing Ember's asset-backed debt collateral to FinTech invoice factoring and bankruptcy-remote SPVs.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Kurt Avarell's Background and Transition from Canopy 5236 Nathan presses Kurt for ARR figures from his previous startup Canopy, expressing skepticism when Kurt cites strict ongoing NDAs. Nathan rejects relying solely on venture funding numbers as a vanity metric of growth.
Ember's Fractional Vacation Home Ownership Model 5524 Kurt explains the mechanics of the 1/8 fractional ownership model and how Ember acquires inventory. Nathan questions vulnerability to competitors like Blackstone scraping listed prospective properties.
Scaling Inventory, Capital Strategy, and Debt Financing 7413 Nathan demonstrates high domain knowledge comparing Ember's acquisition debt facility with FinTech warehouse facilities and SPVs. Kurt shares their $17.4M equity funding and $20-30M debt leverage structure.
Commercial Break: FounderPath Valuation Tool 6525 Nathan breaks down the unit economics of the 12% markup and $100 monthly platform fee while raising potential liquidity traps for owners trying to resell. Kurt educates him on how selling LLC shares on the MLS bypasses standard mortgage underwriting.

Statements from this episode (10)

Assertion Supported
Avarell: Canopy raised about $70M by 2019 departure
“We raised at the time that I left, it was about seventy million.”
Kurt Avarell Jun 30, 2022 ▶ 2:12
Assertion Not checkable as stated
Avarell: Most second-home owners use properties only six to eight weeks yearly
“The downside is most second home owners don't use the home That often. And so you know, they're only, they think they're going to be there six months out of the year, but they end up only being there six to eight weeks out of the year.”
Kurt Avarell Jun 30, 2022 ▶ 5:00
Assertion Not checkable as stated
Avarell: Pacaso and Ember are the two dominant players in fractional ownership
“Right now it's basically the two big players in the space are Picasso and Ember. There are a couple others that are smaller but those are the two big ones.”
Kurt Avarell Jun 30, 2022 ▶ 8:30
Prediction Not checkable as stated
Avarell: Ember will '100%' surpass $100 million in GMV in 2022
“Oh yeah. Yeah, absolutely. Based on the current growth, a hundred percent.”
Kurt Avarell Jun 30, 2022 ▶ 11:35
Assertion Not checkable as stated
Avarell: Ember operates near breakeven with almost zero cash burn
“I can tell you, we operate pretty close to a breakeven. Like we've not burned hardly any cash. Most of the cash that we put on the balance sheet is to buy inventory.”
Kurt Avarell Jun 30, 2022 ▶ 12:07
Assertion Supported
Avarell: Peter Thiel led Ember's Series A in $17.4M combined round
“So we closed a seed and an A, which we kind of announced together at a 17.4 million dollar financing. The A was led by Peter Thiel. So we were super excited about that to have him lead that financing. And we closed that in February.”
Kurt Avarell Jun 30, 2022 ▶ 13:25
Assertion Not checkable as stated
Avarell: Ember holds $20M to $30M in total debt financing
“Well on the debt side, it's, there's several different sources of debt that we use to make this happen. And you know, it's probably in the 20 to thirty million dollars right now on the debt side and the combination of everything collectively.”
Kurt Avarell Jun 30, 2022 ▶ 14:24
Disclosure
Avarell: Ember takes 12% markup on home purchase and furnishings
“Where we make the money is on that You know, we're right now at 4.3 million dollars, the four million dollar purchase price of the home, 300,000 dollars of furnishings. We take a 12% uplift. So we'll take that 4.3, multiply it by 12%. And that's where Embe…”
Kurt Avarell Jun 30, 2022 ▶ 18:10
Prediction Not checkable as stated
Avarell: Ember expects to double or triple customer count by year-end
“Well, we've had over a hundred families buy in to Ember to date over the past 10 months, and yeah, we expect to, you know, double, double or triple that number toward, you know, the end of the year or so.”
Kurt Avarell Jun 30, 2022 ▶ 19:26
Assertion Not checkable as stated
Avarell: Ember share transactions close in 24 hours via LLC interests
“You list the property, it goes up on the MLS, it goes on Ember's website. we bring in a buyer, the buyer buys a share, and they can actually close on that share in 24 hours because what they're buying is a membership interest in an LLC, not in not, you know,…”
Kurt Avarell Jun 30, 2022 ▶ 27:35
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