The Exchanges

Q So Ryan, did you guys, have you guys bootstrapped this or have you raised capital?

A So we actually bootstrapped for the first two years of it. Um, in the very early days, it was just me doing all of our development, uh, and mainly doing our sales and the two of us, honestly, handling all of the chats that would come in. Um, we were, anytime you messaged in on RentReady in those first couple of years, it was literally us on our phone or computer messaging back. Um, in 2019, we raised our first venture round and that was really when we brought on the core team to RentReady. We grew to about eight as a team. And then we raised a venture round earlier this year. So we've raised about five million dollars to date.

AI assessment note: “we actually bootstrapped for the first two years... raised about five million dollars to date”

Q Okay. Take me back to the backstory here. When did you launch?

A Um, so really back in 2016. And, uh, as you mentioned, I mean, I was, I was going to school in New York city at pace. I had gotten that, uh, my first internship at Goldman actually, which is right across the street from pace. And it really all started when I went to try to get my first apartment myself, not as a landlord, but as a tenant. And realized that it was incredibly difficult to rent an apartment. Um, actually going through the application process was quite difficult. And I had just gone through an application process as a student, which was not that difficult, which was the common app process. I filled out an application once I applied everywhere I wanted. It was pretty nice and easy. It struck me as shocking that the, uh, rental industry wasn't the same way. And so initially version one was just building an app myself for myself and friends. And I had done our initial development. Um,

AI assessment note: “so really back in 2016”

Q So small landlord managed by what? Number of square footage managed? Number of beds managed? Number of units? What is defined small?

A So in our case, I normally say one to a hundred units. We have some people that break that and say, I don't care if I'm over what you've designed it for. I'm more than a hundred units. Um, but in our case, it can be as little as one single family home that you own to around a hundred units. Um, and a lot of it comes down to, I would say more so the mindset of the person. So there's a very large difference between someone says I'm running a property management business where I've hired a number of employees. They are working under me. And someone that says, I have my, my, my day job that I'm working on. I have this real estate business that it allows me the freedom to either put a kid through college or retire earlier, go on a couple extra vacations. And I'm trying to figure out a way that I can manage this myself simply and easily without necessarily needing to hand it over to one of those management companies or, uh, go gray trying to do it.

AI assessment note: “in our case, I normally say one to a hundred units.”

Q What are some of the changes you made? Like you run a first out on bigger pockets and it's way too expensive. It won't work at Scale, but you make some tweaks and drop it down and you save 80% on the thousand. Like what were some of the tweaks you made to optimize a channel once you enter it?

A Um, countless. So, I mean, not just, uh, not just tweaks about, uh, like the messaging you're using, uh, or even the part of the product that you're talking about when you're talking about an end to end suite with rent ready. It's, it does matter when you say, okay, are we going to talk about payments? Are we going to talk about a maintenance coordination, accounting, listings, screenings? Um, so there is yes, those choices, but really some of the surprising things to, um, come from even things as simple as like, does it matter if you have a Person in the photo or not. Does it matter if you have a house in the photo or not? It doesn't matter what type of colors you use. Um, so all of those, we actually went through about 1200 different ad creatives over the course of last year.

AI assessment note: “messaging you're using... does it matter if you have a Person in the photo”

Q One four. Okay. Interesting. And then, so what, so you raised three, three, six this year. Looking back, I mean, obviously you guys took dilution to do that. Most people are selling 10 to 20% of their business in these sort of early rounds. Do you regret that at all?

A No, not at all. I mean, especially from the perspective of, we've looked at it, uh, not just from the capital perspective, but what also do those investors bring in each round? So, um, for example, uh, TI Ventures, um, was, was the lead for that very first round. One of the things that we have been focused on since day one has been How do we take customer feedback and convert that very quickly into action that we can change in our business? And a lot of their model in even doing their diligence on us, but what it went beyond that and doing was saying, uh, how do you learn from those customers? And that was something that we've been able to implement with them post rates. Um, like they've helped talking to our own sales reps or talking to our own marketing team or a support team and understanding how do we actually synthesize that feedback, turn it into action, create a better product and And in the end result. So, I mean, from one side of things, rent ready would certainly not be what it is today without that funding. Um, but also beyond just the capital itself, um, there's a lot of knowledge that, that comes along with those investors. Hopefully if you do it right, which I, which I feel like we've been very lucky, but lucky to have so far.

AI assessment note: “No, not at all. I mean, especially from the perspective of”

Q And then wrap us up here. You said you're thinking about a series A. How much do you think you'll go try and raise and why do you need the capital?

A So we're looking to raise about fifteen million. Um, uh, there's, there have been some pushes to, to raise a little more, but I, I think honestly it's about all we need. Um, and really the, the purpose of that will be just scaling up what we have already and integrating some services that will, uh, further help landlords. For example, the accounting side of things was one that they had asked for a lot. We actually added that in Q three, um, where we've completely automated the landlord Accounting side of things are very much automated that side of things so that that's just streamlined. Um, but it goes far beyond even just the maintenance coordination and accounting, um, taking it truly to the, um, As far as we possibly can in terms of, uh, integrating additional services that ultimately solve pain points that tenants and landlords have to bring to us.

AI assessment note: “we're looking to raise about fifteen million... the purpose of that will be just scaling”

Q What year was that? Was that the first year or second year or further?

A Uh, it's actually further. So we spent probably the first year and a half just in development. Um, we had, I mean, a small number of landlords on the platform. Um, but I remember we had passed our, uh, our 100th customer back in early, um, And, uh, he and I actually happened to be together. A lot of the time we, we aren't necessarily in the same place. Uh, we happened to be together that day, which was pretty exciting to kind of be next to each other, cheersing to that. It's, it's funny to say, um, to look back at that now and bigger, um, as excited as we were about a hundred as you know, the scale changes, you have to, uh, readjust what you, uh, how you feel for each hundred. But, um, it, it really was a super, super, um, You know, personal exciting moment for us to-

AI assessment note: “Uh, it's actually further. So we spent probably the first year and a half”

Q Well, no, I don't know what your goals are. So my, my question specifically is just around the market size and how fast you can add customers. Can you break 10,000 landlords in next year or can you do it this year? You think?

A Uh, I mean, I, I'd rather not speak directly to the, the customer amount itself. Um, it's just not really a number that we share, uh, publicly, but, um, in terms of the, the growth or understanding that side of things, I can't say, I mean, we grow this, this year alone, we've grown a 10% month over month. Um, so I, certainly in terms of how fast we can grow, uh, I've talked to a number of even founders in the, the prop tech space and Um, the space itself is, is really exploding. Um, but even within the space, from what I've been hearing from founders, uh, we, we've had a healthy growth rate, even above the average in, in the prop tech space.

AI assessment note: “I'd rather not speak directly to the, the customer amount itself.”