startups

Launched and Accelerated

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On September 13th, we welcomed six new startups to the MetaProp accelerator family. The past month has been energizing, challenging and productive for them and us as we ramp-up the startups’ growth curve.

MetaProp integrates its venture fund and advisory businesses with its accelerator companies. Over the summer we launched our Fund II and recently added a new Consortium of sponsors, making the MetaProp community more integrated and stronger than ever. At the beginning of the accelerator program our number one goal is to connect each startup in the cohort to our broader community. As our network of investors and sponsors has grown, so too have the opportunities for our companies.

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John Kang, CEO of Reasi, flies across the country every other Thursday to join us. He explained that so far, our community has been the greatest value he has gained from the program: “MetaProp opened up the East Coast PropTech ecosystem for us.  We've lined up back-to-back meetings with partners we would have struggled getting in front of. Furthermore, the program has helped with branding and navigating broker and title relationships,” John explained.

At the same time, the glue that truly holds the class together is the cohort itself. Ultimately, the program is hard work, requires frequent travel and a great deal of dedication. Each year, we find that CEOs push through for their cohort mates. John explains: “Meeting the other cohort founders has been inspirational. We're all so motivated and committed that it's contagious, and learning about their experiences has been an unexpected bonus as Reasi tackles similar challenges.”

We are looking forward to watching this class grow and mature. In particular, we are looking forward to finding ways for all of you (our community) to engage with them. Take a look at the list of companies and some highlights from orientation, below.

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The 2018-19 MetaProp Accelerator at Columbia University cohort includes a diverse mix of founders who are looking to solve big problems in interesting and challenging areas of PropTech, including smart cities, residential brokerage, tenant advocacy and sustainability. The companies are using cutting-edge technology, including computational geometry, blockchain and machine learning to solve some of the industry’s biggest problems. Take a look at the group of startups below:

Aegis AI  (Chicago) Aegis AI uses computer vision to identify weapons in surveillance camera footage, dramatically reducing law enforcement notification time and saving lives in an active shooter situation.

Aegis AI (Chicago)
Aegis AI uses computer vision to identify weapons in surveillance camera footage, dramatically reducing law enforcement notification time and saving lives in an active shooter situation.

Avvir  (NYC) Avvir compares laser scans of constructions sites to BIMs in order to identify construction errors, monitor progress, and ultimately enable a dynamic living digital twin of a building that can be used as a platform for the management of smart buildings.

Avvir (NYC)
Avvir compares laser scans of constructions sites to BIMs in order to identify construction errors, monitor progress, and ultimately enable a dynamic living digital twin of a building that can be used as a platform for the management of smart buildings.

Furnishr  (Toronto)  Furnishr is a turn-key home furnishing platform that designs, sources, delivers and setups your home all in one day.

Furnishr (Toronto)
Furnishr is a turn-key home furnishing platform that designs, sources, delivers and setups your home all in one day.

Jabbrrbox  (NYC) Jabbrrbox is a new workplace solutions company bringing privacy to commercial and public spaces. The Jabbrrbox solution fills a critical void in the public and private marketplace and is engineered for today's modern mobile workforce.

Jabbrrbox (NYC) Jabbrrbox is a new workplace solutions company bringing privacy to commercial and public spaces. The Jabbrrbox solution fills a critical void in the public and private marketplace and is engineered for today's modern mobile workforce.

LiveBy  (Nebraska) LiveBy is a hyperlocal data company focused on empowering brokers, teams and agents with the tools to showcase their local expertise. With plug-and-play local content for websites and new, sharable Neighborhood Guides and Market Reports, LiveBy helps real estate professionals prove why they know their markets best.

LiveBy (Nebraska)
LiveBy is a hyperlocal data company focused on empowering brokers, teams and agents with the tools to showcase their local expertise. With plug-and-play local content for websites and new, sharable Neighborhood Guides and Market Reports, LiveBy helps real estate professionals prove why they know their markets best.

Reasi  (LA) Reasi is an online real estate escrow service that provides a secure and seamless home-closing experience. We eliminate escrow costs using our blockchain platform, support the transaction from offer to close, and bring simplicity & security to a $10 billion escrow market plagued by frustration and wire scams.

Reasi (LA)
Reasi is an online real estate escrow service that provides a secure and seamless home-closing experience. We eliminate escrow costs using our blockchain platform, support the transaction from offer to close, and bring simplicity & security to a $10 billion escrow market plagued by frustration and wire scams.

 
Orientation week featured the brand new MetaProp Accelerator Consortium with  Comcast machineQ ,  Cushman & Wakefield ,  First Republic Bank ,  Fox Rothschild  and  Inmobiliaria Colonial .

Orientation week featured the brand new MetaProp Accelerator Consortium with Comcast machineQ, Cushman & Wakefield, First Republic Bank, Fox Rothschild and Inmobiliaria Colonial.

We celebrated with a Welcome Toast at the Columbia Startup Lab:

We celebrated with a Welcome Toast at the Columbia Startup Lab:

Kent Tarrach gave his annual talk on asset management

Kent Tarrach gave his annual talk on asset management

Scott Rechler welcomed the companies to RXR’s headquarters

Scott Rechler welcomed the companies to RXR’s headquarters

Fox Rothschild invited the companies for a lunch and learn:

Fox Rothschild invited the companies for a lunch and learn:

What We Learned From the Tel Aviv Roadshow

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The third roadshow stop for the MetaProp Bridge @ Columbia University took our partners to sunny Tel Aviv, Israel.  It was particularly exciting to visit during the widely celebrated Purim holiday.  Amazing costumes everywhere!

We’ve had our eyes on the Israeli PropTech startup market for a couple of years now and are very impressed with its recent development.  During our short visit, we met almost a dozen real estate tech companies and many industry enthusiasts, mentors and investors.

We thought our readers might appreciate some quick observations from the road show trip:

  • Cybersecurity, computer vision, robotics, and, quite frequently, automotive were the most commonly mentioned local industry clusters generating buzz.  For more information on what’s happening on the ground, we recommend checking out Forbes’ “The Tel Aviv Tech Startups To Watch In 2018.”

  • While “Startup Nation” has long been a hotbed of technology and innovation, VCs, corporate R&D, innovation and venture arms are all further increasing their presence in Israel - from Haifa, to Herzliya, to Tel Aviv, to Beersheba.  We frequently heard names like Intel, Microsoft, HP, Volkswagen, etc.--along with many other corporate names that one might not traditionally associate with technology (e.g. insurance, infrastructure and CPG companies)--cited as players increasing their local activities. Tech is on everyone’s mind.

  • Startups naturally remain very interested in growing outside of Israel.  The most common expansion locations we heard were North America, China and Western Europe. Read Forbes’ “Israeli Entrepreneurs Are Shaking Up The American Real Estate Market.

  • We saw tremendous interest in the PropTech space - especially Construction Tech (Astralink, Siteaware, Beyon3D).  This makes sense as the country is experiencing an enormous real estate boom.  There are more cranes flying in Tel Aviv than Aaron has seen since his time in Moscow in 2006.

Special thanks to our friends who supported and hosted during the trip - especially the entire executive team at market leading PropTech firm BMBY!

 
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Aaron Block  Co-Founder & Managing Director  Email

Aaron Block
Co-Founder & Managing Director
Email

Zak Schwarzman  Partner  Email

Zak Schwarzman
Partner
Email

Pilot Day at Cushman & Wakefield

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On December 8th, top Cushman & Wakefield technology and business executives participated in an exclusive, two hour “Pilot Day” with featuring presentations from the MetaProp NYC 2015 real estate tech accelerator class. 

During the Cushman & Wakefield Pilot Day, SocialSign.In, Radiator Labs, Optii Solutions, Rentalutions and Notion demonstrated their technologies.  In August 2015, the five startups were selected from a pool of more than 150 applicants by the MetaProp NYC investment committee made up of current technology investors and former executives at Blackstone, Sequoia Capital, Cushman & Wakefield, Boston Consulting Group and Google.

Cushman & Wakefield Global CIO Adam Stanley remarked, “Our industry is evolving so quickly and our clients want us to lead through technology and innovation.  We’ll continue to offer our business and technology leadership access to top minds in the real estate tech space.”

MetaProp NYC Co-Founder and Managing Director Aaron Block said, “Cushman & Wakefield touches every aspect of the real estate business and the MetaProp NYC 2015 accelerator class has companies that improve office, retail, hotel, multifamily, industrial, and leisure asset types.  There’s a lot of exciting overlap and potential impact.” 

“The Pilot Day series is an important aspect of our teams’ preparations for the New York (January 26, 2016) and San Francisco (February 3, 2016) Demo Days,” continued Block.  “Cushman & Wakefield was a perfect partner. Their CIOs, strategists and business line leaders were extremely engaged.  They rolled up their sleeves, asked thoughtful questions and provided meaningful feedback about the startups’ technologies and presentations.”

MetaProp NYC Demo Days celebrate the culmination of the 22-week MetaProp NYC accelerator program and provide graduating startups with new corporate relationships (for pilots and investment), new angel/VC interest, and media awareness.  Those in attendance (MetaProp NYC 2015 class, venture capital investors, program mentors, corporate partners, real estate industry executives, media, government officials, etc.) network with the industry’s top minds and are the first to hear about the latest technologies, new partnerships/funding announcements and early details about MetaProp NYC’s 2016 class.

The Forgotten 50%

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Real estate is one of the oldest industries in the world.  Some of the first ever real estate deeds were signed and recorded in cuneiform script, on clay and stone tablets, at the dawn of the 4th Millennium BC in Ancient Mesopotamia.  That means that human beings have been transacting land from one party to another for approximately 6,000 years if not longer.

Since then, real estate has become a roughly $15 trillion industry, which amounts to the size of the entire stock market.  From Sumerian times through the 1980’s, real estate was a family affair.  Property was owned and passed down from generation to generation, and each family had its own quirky way of managing, leasing, and selling real estate. 

Starting in the mid 1980’s, this “mom and pop” world of real estate gradually began to change.  In 1986, congress enacted new tax laws that leveled the playing field for institutional investors to start investing in real estate as its own diversified “asset class”, much like they would equities or fixed income.  1988 saw the creation of what many believe was the first modern real estate fund: the Zell/Merrill Lynch Real Estate Opportunity Fund.  This vehicle raised $400 million of institutional investor capital to pursue assets sold primarily by the Resolution Trust Company.  This opened the floodgates to the rapid proliferation of Real Estate Investment Trusts (REITs) and real estate private equity funds in the 1990’s. 

Along with the rise of institutional real estate as an asset class came the birth of the World Wide Web in 1989.  As the web proliferated in the 90’s, so did real estate technology.  Since then, real estate technology has been almost exclusively focused on catering to these “institutional” real estate investors and property owners.  Software companies preferred to sell directly to these types of entities, as they owned massive amounts of property and theoretically conducted business in a more organized and professional way. 

Thus, legacy players like YardiMRI, and RealPage, as well as newcomers like VTS and Hightower have focused almost exclusively on providing software to manage institutional real estate.  As these software platforms have grown more robust, more and more resources have been poured into assisting these large institutional players manage their massive portfolios.  However, what has happened to the smaller landlords, the ones who still pass down real estate through generations and maybe still write deeds in cuneiform on stone tablets?  The short answer: nothing at all. 

While mom and pop landlords still control roughly 50% of the total real estate market in the United States, they have been almost completely ignored by software companies.  Small time landlords manage 24 million homes according to the latest US Census data.  These landlords want to use software to manage property more efficiently, but can’t afford large solutions like Yardi or MRI.  At MetaProp NYC, we call this class of landlords “the forgotten 50%” because since the 1990’s the software community has largely forgotten about them.

Companies like MetaProp NYC portfolio company RentalutionsEasyrent and a few others are beginning to provide small landlords with the same functionality as larger property management software platforms at a fraction of the price.  Rentalutions allows landlords to accept payments online, screen tenants, execute leasing, manage facilities, and more.  Although the market is highly fragmented, these landlords are now clamoring for software.  Rentalutions has been able to sign up 16,000 landlords in 5,500 zip codes across the country to its platform and it’s growing quickly.

Some things never change: as large as institutional real estate has become, the business is still very similar to how it was in Ancient Mesopotamia.  Only difference is now small time landlords use Rentalutions instead of stone tablets.

Top 15 Most Influential People in Real Estate Technology 2015

In honor of our upcoming 2015/2016 Demo Days, MetaProp NYC presents:   

The first annual list of the most influential in NY real estate tech:

  1. Jared Kushner of Kushner Companies and Josh Kushner of Thrive Capital

    • These two power brokers control millions of square feet in NY, and are among the earliest adopters and champions of all things real estate tech including startups like: WeWork, Compass, Cadre, Honest Buildings, and WiredScore.

  2. Zach Aarons, Clelia Peters and Aaron Block of MetaProp NYC

    • The most prolific angel in real estate tech, one of NYC’s top residential brokerage minds and an ex-Cushman executive teamed up with REBNY, ICSC, the NYCEDC, Warburg Realty and Zillow to launch this real estate tech startup accelerator and the #1 global RETech seed fund.  This team also produces NYC Real Estate Tech Week.

  3. Nick Romito of VTS and Brandon Weber of Hightower

    • Founding entrepreneurs and competitors who are lighting the commercial real estate tech world on fire. Future of CRE could be here.  Both companies have activated old-line institutional partners (Blackstone, Newmark Grubb Knight Frank Corp, etc.) and have raised significant Series B capital from blue chip venture funds.

  4. Robert Refkin and Ori Allon of Compass

    • Ex-Goldman Sachs and ex-Google founders who built a tech enabled residential real estate brokerage powerhouse.

  5. Susan Daimler of StreetEasy/Zillow

    • One of the previous generation of real estate tech entrepreneurs who remains as relevant and influential as ever.  Currently GM of top residential listings site.

  6. Steve Schlafman of RRE

  7. Rich Sarkis of Reonomy and Michael Mandel of CompStak

    • Big shots taking on the goliath, publicly traded deathstar CoStar.  Michael’s CompStack democratized leasing “comps” and Rich’s Reonomy just completed a massive Series B with investors like Bain Capital.

  8. Michael Rudin of Rudin Management

    • 4th gen Exec who helps spearhead the 20m sqft portfolio's tech investments.  Incubating their own DiBoss building operations platform.

  9. Dave Eisenberg of Floored and Red Swan Ventures.

    • Widely recognized as one of the smartest entrepreneurs in the space.  The authority on interactive 3D graphics and space test fit technology.  Also investor in Hightower and other technologies through VC Red Swan Ventures.

  10. Bill Field of LeFrak Investments, Ryan Melohn of Expansion VC, Michael Milstein of Millstein Properties, Grand Central Tech incubator, and Circle Ventures, and Ryan Freedman of Corigin Ventures

    • Not as well known as the Kushners and Rudins but still very influential strategic investors.  These gentlemen invest real estate family money and help new technologies access pilots within their vast portfolios.  Local portfolio companies include Honest Buildings, Radiator Labs and LogCheck.

  11. Ryan Baxter of REBNY and Sarah Malcolm of ICSC 

    • You can't ignore the influence of real estate associations in the future of our industry.  Ryan Baxter is a lobbyist and liaison to the real estate tech community for industry association powerhouse REBNY.  He's recognized as a Crain’s NY 40 under 40Sarah Malcolm runs digital strategy for the global retail real estate association ICSC and maintains tight relationships with the local venture, start-up, media and real estate communities.

  12. Erik Levy of DMGI, Brad Svrluga of Primary Ventures,  and Jordan Nof of Tusk Ventures

    • Erik leads investments for the deepest investor in the real estate tech data space.  Holdings include Trepp, SiteCompli, and Real Capital Analytics.   Brad has been an early champion of real estate tech and investor in local startups Reonomy, Fieldlens, and TheSquareFoot. Jordan served as a director at Blackstone and now leads investments at Tusk Ventures.

  13. Riggs Kubiak of Honest Buildings

    • Ex-Tishman Speyer executive who invented the real estate market’s leading procurement and workflow platform

  14. Caren Maio of Nestio

    • Top female founder in today’s crop of real estate technologists.  Created NY’s leading residential listings system for residential real estate professionals.

  15. Ashkán Zandieh of CRE:Tech and Falkon

    • Founder of CRE:Tech research and consulting and property research app Falkon.  One of the original advocates for real estate tech in New York City. 

An Open Letter to Millennial Entrepreneurs

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Dear Millennials,

Many of you have now decided to start companies.  That's great.  We need young people with fresh ideas in the entrepreneurial ecosystem.  I am counting on you to become the next great visionaries disrupting the real estate technology industry.  Hopefully some of you will someday apply to MetaProp NYC.

Because so many of you are now entrepreneurs, I thought that I would share some basic principles with you.  These principles seem clear and obvious to me as an elderly member of the "Jordan Catalano Generation" but for some reason many of you either don't share them, don't care about them, or fundamentally disagree with them.

Nonetheless, here are some things that you need to understand when you raise money from me as an angel investment in your business.

·         I have just made an angel investment in your business.  This is usually in the form of a convertible note, preferred stock, or a SAFE.  Regardless of this structure, this now makes you a fiduciary.  If you don't know what fiduciary duty is, please stop everything you are doing and look it up immediately!  No links here; you have to use the Google machine yourself.

·         I made an angel investment in your business.  This is not a Thiel Fellowship grant.  I did not just give you money to "find yourself", "save the world", "learn about startups" or "explore an intellectual curiosity".  I invested a small amount of money in your business that I would like some day to turn into a large amount of money.  If you happen to find yourself while building your business and making me money, that's awesome.  If you want to only further your education, please do so on your own nickel.

·         I just made an angel investment in your business.  Here is a list of things that you are not allowed to do under any circumstances until you return a larger sum of money to me than I put in.  All of these rules are based on my personal experiences with millennial entrepreneurs.  No names but all experiences are 100% truthful.

o   You are not allowed to purchase a fancy Audi Q7 because your team is having "mobility problems" getting around Silicon Valley.  You can take the bus.

o   You are not allowed to hire a personal chef for your team so they can eat better.  They can eat Soylent or whatever else people in your generation eat.

o   You are not allowed to fly business class.

o   You are not allowed to stay at a five star hotel when you come to visit potential investors and clients in NYC.  You can stay at a hostel.

o   You are not allowed to say that you need a high salary to cover your rent.  You don't have kids.  Move back with your parents.  I know it sucks but make it work.  If your parents don't live nearby, you need to crash on someone's couch for a few months until you raise more money or actually God forbid start running a cash flow positive business.

o   You are not allowed to tell me that you are crushing it when your company is two weeks away from becoming insolvent.

o   You are not allowed to ignore me.  When you are running out of money you need to pick up the phone and call me, immediately.  I am not suggesting I can fix your problems but I might be able to help and it only takes you 10 minutes.  You have nothing to lose.

o   You are not allowed to tell me that you don't need my help because you have a "fantastic team of mentors and advisors" who are much better than me in every way. If your group of advisors is so good, why were they not able to prevent you from flushing your business down the toilet?

o   You are not allowed after you have lit my money on fire to tell me how "excited" and "inspired" you are to be working at another company filled with "geniuses".  Unless that other company is paying me a recruiting fee after hiring you or giving me equity, I really don't give a shit about how awesome your new job is.  You sucked at your last job and lost my money.

o   You are not allowed to tell me that my communication to you has been poor.  I have no obligation whatsoever to communicate with you except for signing various documents and wiring money.  You have an obligation to communicate with me.

o   You are not allowed to hang up the phone when I call you to tell you that you ignored these rules and did a terrible job at running a company.  Just because your other investors are too scared about reputational risk to yell at you doesn't mean you don't need to be yelled at.  Don't expect to be coddled by everyone.  Life is not all Care Bears and rainbows at Burning Man.

I will tolerate the fact that you have no idea about John and Lorena Bobbitt. I am even okay with the fact that you can't sing me any Stone Temple Pilots song.  I feel sorry that you never had the privilege of seeing Tonya Harding ice skate or seeing Dylan date Brenda and Kelly simultaneously.  However, I just unfortunately can't tolerate you ignoring the very simple rules and principles that I have outlined above.

Sincerely,

Zach Aarons

How To Turn Pain Into Gain

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When professionals in various industries approach me about starting companies, I almost always ask them to engage in a simple exercise.  I ask them what the most frustrating thing they did at work was and if software could fix that problem or at least make it less frustrating.  The answers usually run the gamut from, “yes, software could fix my problem and I want to build it” to “no, it’s still too esoteric a problem to benefit from software” and everything in between.  When someone wants to build software to solve a particular pain point that they have experienced at work, that’s when my eyes light up.

As an investor, I practice something similar to this method.  My friend Paige Craig of Arena Ventures has written extensively about what he calls the “hunting” method for finding great startups.  His approach is “imagining future solutions and then focusing my time on finding founders who fit within those theses”.  Now Paige is a very successful generalist investor and has myriad interests.  He is able to imagine these types of scenarios across different industries.  This is a difficult skill to master.  However, for mere mortal investors, I suggest engaging in the “hunting” method to find companies that address (and hopefully solve) unique pain points that you have encountered in your day to day business life.  

One day several years ago, I was sitting in my office minding my own business when I noticed that everyone was tense.  My office is typically a pretty quiet place but on this day people were pissed and I wanted to know why.  I found out that a subcontractor’s bid for a very important building material had come in significantly higher than we expected and caught us all off guard.  I felt bad for my colleagues for a while but then decided to see if there was a way to use software to provide greater transparency and efficiency to the construction bidding process. The workflow had been done for centuries with paper and pencil and only recently integrated what I would call “disorganized email solutions”. 

I put on my Paige Craig hat and decided to do some “hunting”.  I scoured the web to see if I could find some software that general and sub contractors could use to simplify and streamline the bidding process, and thus save money for developers in the long run.  I struck out, found nothing, and got back to work on whatever other project I had in front of me that day. 

Later that very evening I was bored and trolling Angel List.  I have found a few startups in my portfolio by just looking on Angel List, and then cold emailing those companies, but not many.  Nonetheless, I like to see what people are investing in and what cool companies are coming out so I visit the site almost daily.  Most of the time it’s easiest to see startups that are trending.  However, for some reason a company called BuildingConnected popped up on my feed.  The company was solving EXACTLY the problem I had experienced first hand at work that day.  It seemed too good to be true. 

I asked for an intro on Angel List and the founder, Dustin DeVan, replied to me within seconds.  Within 15 minutes we were on the phone chatting.  I liked him and the fact that he had extensive experience in the construction industry as well as a team of talented technologists building the platform.  I was sold!  He asked me if I wanted to see the product before cutting a check and in one of my gutsiest (or stupidest) moves ever as an angel I said, “I don’t need to see a product.  The fact that you HAVE A PRODUCT puts you leaps and bounds above everyone else in an industry that desperately needs it”.  I signed papers for the round that night.

Dustin has become a good friend, a mentor at MetaProp NYC, and a pillar of the nascent construction tech community since then.  He has signed up many contractors to use his platform and they just love it.  I continue to be incredibly excited about what BuildingConnected is doing because it is solving discreet, very painful pain points that developers and contractors experience across the world on a daily basis.  So, if you are looking to find a potential investment, look to turn your own pain into gain.  Happy hunting!