Rick Nolan presented a consulting-for-equity deal for a startup developing a SaaS platform to help homeowners manage their properties effectively. The platform integrates tools for tracking maintenance, arranging mortgages, securing renovation loans, and connecting with service providers. With roots in an established real estate tech firm, the startup is backed by founders with decades of industry experience. They aim to launch beta testing by the end of the year, leveraging relationships with real estate agents to gain early adopters.

The revenue model monetizes user engagement through partnerships with mortgage brokers, insurance providers, and contractors. By offering the service free to homeowners, the company intends to drive user adoption and long-term value. The business plan highlights modest early revenue growth with a “hockey stick” trajectory, targeting profitability within 18 months and a $27 million valuation by year five.

The team has secured partnerships with established real estate and insurance entities, and an advisory board supports the company’s goals. They seek $500,000 in convertible note investment to fund development, with a subsequent $1 million round planned within the next year. Rick highlighted the company’s competitive advantage and user-focused design approach, emphasizing its simplicity and disruptive potential in the real estate market.

Rick’s role in the venture includes advising on financial modeling, investor relations, and business planning in exchange for equity. Participants on the call provided insights on improving user experience, increasing beta testers, and scaling strategies. The conversation underscored the importance of a seamless user interface and rapid feedback loops for the platform’s success.

Carl Allen and other dealmakers praised the pitch’s analytics and the innovation behind the SaaS solution. They emphasized Rick’s experience in startups and venture capital as crucial to guiding the business. The session concluded with a reflection on the value of consulting-for-equity deals and excitement about the potential for scaling and disrupting the residential real estate tech space.

Full Transcript:

Rick Nolan.

Rick, I was gutted you weren’t in Atlanta, man. I really wanted to meet you, but, hey. Hopefully, next time.

Yes.

I was one of those people just the guy that this is a guy that knows how to present deals, by the way.

So, over to you.

Alright. You can see my screen okay? Yeah.

1. Let me just hit the bar here.

Alright.

So this is a consulting for equity deal, that I’ve been working on.

So I’m gonna give you some more backdrop of one of the founders toward the end.

So so, I’ll so what they are putting together is a suite of tools that, based on the SaaS platform, so software as a service, so basically, like a web app to allow homeowners to manage their property. So you’ll see as you go through helping homeowners find mortgages, helping them find, renovation loans, for example, helping to find service providers for some work around the house, etcetera.

And, so I’ll make the comparison. It’s a start up, right, to be clear. So, basically, they’re zero revenue stay. The company is, you know, in the stages of being formed kind of thing. So it truly is a a starter in that context.

So, I’ll go talk more background in the space a little bit toward the end of the presentation.

But But it comes from a technology company that’s already been building tools for the real estate industry since twenty fifteen.

And and, the two founders, so you can see in the bottom of the slide here, have spent decades in the real estate industry. Do you remember?

Take it.

Sorry. Somebody need to be muted there?

Yeah. I’ll deal with that. Sorry to see you back.

So the two founders come from the real ace real estate industry and have a lot of regard, and not just the real estate industry per se, but but, providing technology solutions to the real estate industry overall that they’re leveraging in this context as well. So they’re starting from a point of of traction and moving into a a new opportunity that they’ve recognized and and wanna pursue.

So as I said, it’s it’s, you know, two guys in IBM trying to build the company out. So they’re looking for five hundred thousand dollars investment today and fifty beta customers that I’ll talk about a little a little bit, later on as they, start trying to test the efficacy of the other product they have. But the the forecast has got basically I’ll I’ll treat this as it’ll probably be at twenty twenty four before the revenues kick in when they have a a, a product that they can offer for sale. So these align with calendar years starting in twenty twenty four, but, you know, they they expected hit break even kind of in the eighteen month mark and growing as you expect a soft model to do with with a lot of profitability, within the, five year period.

So as I mentioned, the the offering itself is is, laying over top of the residential home market. So residential real estate, everyone on on this call, I’m sure knows, is is one of the, largest unmanaged asset classes in the world. Right?

Where, you know, most people are homeowners and, everything from single homeowners, which is the bulk of the marketplace, to multiple homeowners, You know, it’s a very, very large marketplace, and there aren’t a lot of tools out there to assist a homeowner, manage the property the way a commercial property manager would have. So some of the spin off, aspects of that homeownership activity around, home maintenance spending, insurance for the for the home and car, etcetera, mortgage commissions, and and the maintenance spend. So it’s a very, very large, very, very active marketplace that these guys are leaning into.

So the market problem that they’re trying to address as soon as the opportunity, it really comes down to what’s in purple here, which is when you think of other applications, like, from a user experience, people wanna, you know, have a very easy, accessible opportunity for finding, you know, the best sales on items. Like, how how many of us start off when we’re shopping or something going to Amazon, right, or when you travel and you go to Expedia, you go to AutoTrader, for example, if you’re looking for a car. So you’re looking for these kinds of apps to assist you to survey the marketplace on your behalf, find the best offering, find the best price, and give you come back to you with choices as to which ones you wanna do. So that’s what this this opportunity is going to provide in the area of of services for homeowners.

And as you say in the end point below that, this idea comes from the work that they’re already doing with two hundred twenty five real estate offices in Canada with six thousand agents within that using an existing SaaS product that they offer in their in the parent company.

So in terms of fit, so there’s the market need. What the solution they’re putting together is kinda like the electronic health record. And I mentioned that specifically in the context of when you think of an electronic health record, think of security, think of of of the, ability to share from your doctor of of this one condition to a doctor over there. So, basically, you own the record of your home.

Everything from the maintenance records, you know, when when the roof was in place last to the water heater, warranty, etcetera. You own the health record of your home, and you get to choose where you share it. Right? So by leveraging in some of the, connections on, marketplace, value activity, on on, you know, so there’s there’s neighborhood profiles.

There’s neighborhood sales activity. There’s a whole bunch of things I’ll talk a little bit later on and get into some of the partnerships. But adding in this sort of real time, information into the SaaS platform adds value to what you need to be done for your home, management to make sure you have the latest, you know, in terms of being a real time information, but also by going into a broader marketplace, the the most, applications as well. So it’s not just about price.

It’s also about, you know, some of the, you know, my opinion on a higher price for a better service, for example.

It’s not without competitors. Right? So, the the company that I’m talking about here is the first one highlighted in blue here, but there are other ones as well. But what I’m highlighting here are the differences between this offering and some of the competitors that are already in the marketplace.

So there is an opportunity to be disruptive in this marketplace overall. So it’s a large growing industry already with lots of activity. And these other companies have come before, really, to my way of thinking, just prove out the market. Right?

So you don’t have to wonder if this is gonna take off or not. These other companies already show you that there is a marketplace that is then getting activity, and can you beat them right back to your unique sales proposition.

So why this company will win?

I love this simple business model for this company and for to to grow and get traction. I’ll talk about it in the next slide. But, basically, for the users using it, it doesn’t cost them anything. So you think of Facebook, right, or or or x or formerly known as Twitter, for example.

There are marketplace platforms out there that have no cost to use. Right? You monetize that on the back end, right, on in different ways. The advertising just has got a little bit different way of monetizing it.

But the getting the eyeballs in here is no cost to the user, but with great value to that user in terms of of the outputs of the of the, of the of the application itself. So real time applicate analytics I touched on.

The more you put into it in terms of profiling your home, the more it can help you as well in terms of of, getting the best information.

And I touched on here on some of the technology stack underpinning the platform. So I don’t expect you on the call. If you know them, fantastic. But Ruby on Rails, React, and React Native, all available with web APIs, connectors to go into this, application. So they’re not building everything from scratch. What they’re doing is is, linking in things that are already available.

So here’s the simplicity of the business model that I love.

It starts off with tapping into a base of referral sources. And by these, I mean, brokers and agents. So these are the gateways to get in the actual homeowners signed up. And so each person is expected to refer this product to their clients. And so they’re the the founders’ existing relationships, they have existing relationship with six thousand Sutton Realty agents. So Sutton Realty is a large national real estate agency in Canada.

And, this company already provides, one of its other products to that, company. And so there’s a a a a brand of trust associated between this Sutton Realty agency and this parent company that they intend to leverage. So it starts off with with expanding that relationship of trust with the intermediaries or referral sources.

But then each broker, from a model perspective, you’re expecting them to deliver fifteen to twenty free home prints in. Your home prints is with with the output of this is. So if someone comes in and they own own a home, think of it like a fingerprint. So but this is a a print for your home where you you it’s going to capture the unique, identifiers about your home. And so the that fifteen to twenty, home prints from our brokers, about fifteen percent of their client base, typically, to get a sense of of, throughput there.

And then the next piece of the business model is you expect a very small percentage of the cumulative number of Homeprint users to request help in some of these various areas. Right? Asking for a mortgage or refinancing of the existing mortgage so there’s not be one put in place as you purchase a home. It could be when that comes for up for renewal, home insurance or small renovation loan. So you’re expecting a very small percentage of of penetration into your base of of free home prints.

The company, based on existing relationships, are expecting a modest penetration into the Canadian industry, and then a year three, expanding into the US marketplace.

So that’s that’s kind of its go to market strategy and simplicity of the business model.

Here’s where that comes to in terms of numbers. Right? So over here in the, if I can get my little cursor going, are the various types of referral networks, the total number that they have in Canada, etcetera. So let me just talk about the business model in turn here as I explained in this chart.

So some of the key drivers to the business model starts off with the cumulative home prints. So as I mentioned there in the previous slide, thirteen per year per broker.

Right? The the traction so of the hundred and forty thousand real estate agencies, for example, by year three, the company is expecting fifteen percent penetration at that marketplace back to where we’re just talking about a, TAM, SAM, and SOM.

Mortgage brokers, three percent of that marketplace.

They’re not counting on any penetration in insurance brokers, and then home bill was sixteen percent. And then the that’s of getting the home prints, then the penetration of the home prints themselves. So just one percent of the home prints ask for, mortgage assistance, point five percent for, renovation loans of twenty five thousand dollars being in the average, and then, two percent, on the insurance brokers. So very, very simple small numbers, but you can see when you look at the forecast, here’s one through five, how it grows over time in terms of the, of the activity. And most of it is based on cumulative growth as well. You see the footnote in year three, that’s when we, the company’s intends to expand into the US marketplace.

So for those of you who like a visualized presentation, I’ll also have that as well that we can come back to. But, basically, it’s your typical hockey stick growth. I always laugh when they when, you know, you think of a venture capitalist, for example, complain when a a founder talks about their hockey stick growth. But if the hockey stick didn’t exist, they wouldn’t invest. So this one has a a healthy, growth opportunity. And what I will say about this is I’ve spent some time talking to the founders to beat some realism into in terms of the assumptions that, underpin, their forecast. So I’m quite comfortable with the achievability of this forecast.

So the numbers themselves, show you this way in terms of the revenues going from four hundred and thirty thousand in year one to twenty seven million in five years.

The marketing expenses, etcetera, sales, product development are modest, but do grow, but just not at the same pace. That’s a danger, particularly the SaaS company, but any product company that sales grow faster than expenses. And so the profitability at an EBITDA level, as I said earlier, starts off in a loss position in year one, somewhere around the eighteen month market hits breakeven, and then grows to a a twenty four million dollar, profitability in year five.

So breaking that down in terms of go to market for the first year, they’re expecting to to release their beta version by October thirty first. So we’re looking for or they’re looking for some, people to participate in that trial.

They wanna test with a few large agents and teams. So these are people who do a hundred plus transactions per year, plus a small number of past and future or surpassing current clients that the the two founders have, if you wanna bring into it. So the the whole purpose of the beta test is to test the functionality and to make sure all the bugs are out of the, out of the product before they release it on, sort of, January first of twenty twenty four. And they’re expecting twenty home prints per agent from that beta test in terms of a a trial.

So the goal here again, to get complete version one of the platform by, by by the start of q one. And then as it moves into the end of year one, start moving on into, you know, hey. We got version one done. Now we wanna start adding some of the enhancements of getting into some of the pro tool functionality, expanding some of the develop, relationship with home builders, etcetera, that I talked about in the previous line of penetrations.

And, and then, starting once we have confidence in the, functioning of the tool and the ability to, you know, walk the talk, so to speak, so to, you know, ban build out consumer ads.

Your three milestones, focusing on the technology readiness, moving that into year two. So adding the missing features as I as I just described, and, focusing on user acquisition is a big part of that back to the the building model that I I touched on earlier.

And in the second year, one of the add on features, at the end of the day, you all want, a company to be a portfolio, not just a single product. So as they look to expanding their their portfolio offerings, looking into other areas, for example, home inspection.

And then I mentioned talking about the, building on the Canadian experience and going into the US marketplace.

Traction to date as they’ve already got some key partnerships in place.

So, OPTA Solutions has a, basically, a database of, in the Canadian context, residential and and commercial, real estate locations across Canada. And it’s it’s relied on as as, you know, the term is ground truth property data.

Walnut Insurance offers, insurance quotes online.

So, you know, API is the connector between, them and your software application.

So that they’ve already got a partnership placed in that. And so it has connections into fourteen carriers that will insurance carriers that will provide the quotes.

Neighborlytics is a partnership as well that connects through an API to their software tool, that provides the the neighborhood information, everything from profile in the neighborhood to recent, real estate transactions in the neighborhood, etcetera.

They already have a five person advisory board in place with expertise in real estate industries on on their industry bodies. So the governing bodies, not just the real estate agencies themselves. So, the real estate associations, for example, on, real estate, the property development, back to that, homeownership connection, and industry. And then, what they’re approaching me on is, bringing expertise on financing.

They’ve already started a home print database building on what they’ve they’ve, had been using already, what they’ve as they tested out their alpha for alpha product, for example, etcetera. They’ve already been building up their their own home print database from, what they have, And they’ve been recognized in a few places as well for what they’ve been putting together.

So, generally, what they’re looking for right now is, as I mentioned, five hundred thousand dollars of investment. And the notion here is, to put that as a convertible debenture, that will convert into whatever the security is for what what I’m referring to here as a qualified transaction. So that qualified transaction will probably be in nine to twelve month time frame and be worth about a million dollars. So the five hundred thousand that comes in now will be converting to whatever that security looks like in in about a year or so.

And then the next, financing after that is about another three million dollars. And as they’re referring or highlighting in the management model earlier, that’s it. They’ve raised, you know, they won’t need they’ll have enough profitability where they won’t need additional capital after that. My value add in terms of what their, you know, consulting fracker piece here is this financing, process is, something I’m quite comfortable with.

I’ve secured these and honest many times already in other stories that I’ve been part of. And and, part of the, you, uniqueness of this offering is you’re expecting investors today to participate in follow on rounds on the way through.

And, and so investor relations becomes very important. And in my in my last company, we had, eighty percent of our initial investors invest in follow on rounds.

Then, so and the other piece here is, they’re looking for five to ten beta test partners, each of whom is capable of delivering five to ten home print testers.

So for myself, I’ve I’ve I I’ve, you know, profiled this on a number of calls, but, basically, I’ve been I’ve been part of fourteen startups in the past, nine of which are venture capital backed, six from the point of founding.

So I’ve taken companies from, you know, idea in a coffee shop to, to venture funding and and and then it moved on.

You know, so I’ve got experience in building a world class company from that first inception and across multiple sectors. Most of it is in high-tech, including computer software as this one is, but it’s also biotech, life sciences, and I’ve I’ve done some, other industries as well, for example, in real estate. Fundraising experience, I’ve done over eighty transactions totaling over three billion dollars, and a broad mix from, like, the smallest deal is probably a hundred thousand dollars to over three hundred and fifty million. So I understand the capital markets, how it’s structured, how you pitch to different players at at different stages, and, you know, what you have to look like to get money from them at that point in time. And, so they ask of me right now, is that they’ve asked me to, have a sort of an active mentorship role at the company to help build the company, assist them with business planning and financial modeling and attracting investors.

They’d like, participation on the advisory board. And because of a finance background, doing a fractional CFO role with them as well. In exchange, the as I said, this is consulting.

So ten to fifteen percent of the company would be what I would expect. And my expectation would be, norm the way I normally do something like this is I get all the equity upfront, and then and but it’s all subject to a it was called the reverse vesting agreement. Basically, if if I don’t, pan out, they can just buy it back, for, you know, basically a penny.

And I’ll open up for, discussions.

Carl, over to you.

Rick, amazing. So great great presentation. Lots of analytics. You know, it’s really amazing to see how your brain works. I I think what you can do with this as well, and I’ve done similar consulting brevity projects before where, you know, you you get a piece of the deal for your expertise and and and being, you know, the numbers guy and the strategy guy. But then I I think potentially as you as you scale this thing up to hit those numbers, you’re gonna need follow on investing rounds. So I think you should get compensated in terms of fees and equity, more equity, if you’re the the point person that’s actually driving that additional investment into the company.

So fascinating stuff. Like, I I’ve not really kind of seen or heard from this before.

Certainly outside of the, of the residential real estate stuff. I know we have I have a similar thing in my house in England, and I think others have as well. But, but, no, this this is really, really interesting. This is like a a new innovative, game changing technology.

But, lots and lots of questions in. What I’ve actually done as well, guys, is I’ve messaged Christian Blumetti, just so that we can really drill into this, for the next twenty minutes. I I’m gonna move Christian to spot one on the red light, green light call, next week so we can spend the rest of the call kinda drilling against this. Because there’s so many questions in here from the likes of of David Gerrold, Dave Evans, Carter, which I wanna get to.

But first off, I’m gonna go to Kyle first just because of the innovative nature of this. Kyle, what’s your take on this, man?

I think Kyle had Kyle had he just sent me a message. He had to jump off.

Alright. Cool. Jeremy, I’ll go to you.

Yeah.

Yeah. Very, very interesting product. It almost kinda reminds me of, like, the CARFAX, for for homes almost. But, you know, with with consulting for equity type deals like this, you know, really, I dig into the background of, you know, whoever the the owner is, whoever developed this because you can you know, consulting for equity deals are are great because, you know, they they pitch it to you as you’re getting equity in the deal.

You know, you’re gonna get all this potential upside, but you can put a lot of time into these types of engagements.

And if you don’t have the the right jockey in place to be able to to execute, that’s that’s a lot of time wasted for for for you. So I I really dig into, you know, their their background, their expertise because, you know, if if they’re not able to to grow these types of companies or or scale them themselves and and those types of things, it can be a lot of time wasted. Also, with these types of consulting for equity deals, I always ask for some sort of retainer.

So there’s some skin in the game, from from whoever’s bringing you on as well. So you’re getting some sort of base, type type compensation for them. But but, yeah, a very interesting product.

Definitely think there’s a, you know, a need, a a place in the the market for this. So, excellent presentation.

Thank you. So so just to respond to a couple of those, on the background of the people. So, as I mentioned, I’ve been, like, six startups from scratch. In all the things that I’ve done, the founders have always found their way to me. They’ve been referred to me by industry intermediaries, accounts, lawyers, those kinds of folks.

And this is the same thing. So they came highly, highly recommended, and I’ve got to know them. You know, I didn’t agree to this. So I I left my last, I had my last exit in twenty eighteen, and I considered myself too young and retired, too old to start again.

And yet here I am thinking about starting again. So it’s taken a lot for me to to be open to this. And so if if there’s been a lot of tire kicking where exactly you’re saying, Jeremy, I wanted to make sure that they’re, you know, the proof is in the pudding kind of thing. These guys are, you know, are worth their salt.

And, so so they keep checking the boxes off from a industry access. And so when I when I evaluate these opportunities, I will also always try to understand what the challenges are to future success. And when you go through the business model, technology was not one of the key elements of this success according to the business model in my mind. Right?

The the notion of the app itself is there’s lots of people you can help develop the on the technical side. So the two founders are from the real estate industry, which is, you know, basically marking your revenue growth. They’ve been relying they so to get the alpha done, etcetera, in their previous product, they’ve relied on, developers that, you know, brought in for hire kind of thing to to to get the product done. So I’m I’m quite comfortable that there’s no, access, you know, no requirements.

That way, they can’t be you know, that’s gonna get in the way of of the future future success. So I’ve I’ve assessed that sort of risk. It’s it’s never perfect, but I’m I’m quite comfortable so far. On the second piece, the notion of getting paid, a retainer is always challenging when you do get started because they don’t have cash.

And, so I think as the and I personally have have never wanted to, use up investors’ money in the first round to pay management salaries. So I to me, the first money coming in goes toward what she had value to the company, which is the product development and the marketing in this context.

So that notion probably is becomes more important when they get the million dollar round and up, for example. The second thing is is, contingency fees.

That’s a fine line to, to walk from a regulatory stand point.

I’m not registered as a as a a a broker to help, you know, our financial intermediary. So I can’t get contingency fees, and be on-site with the legal system. But you can do it if you’re the CFO because then I’m representing the company. So I’d have to get get some thought to, you know, what that can sort of fractional CFO rule that they’re asking me to fill and how much time I actually wanna commit to that because I’ve I’ve got other plans as well.

Nice. Thank you for that. Right. I would just wanna go around the room. There’s there’s been some really cool, questions in the chat, and I wanna go to Patrick Alvarez as well.

He’s got his hand up. So, yes. So car Carter Baker’s got a lot of insights, has a lot to say on this. Carter, why don’t you unmute yourself, and let let’s get you riffing with Rick on the stuff.

Yeah. Hey, Rick.

I really like the idea behind this this product. I don’t think there’s something that really encompasses this in the US, at least that I’m aware of. It sounds like some folks on the other side of the pond has something similar to this, but, really, what it comes down to is whether or not these clients are actually gonna use this product. And I think the key to that is gonna be like a rapid fee a rapid feedback loop when you’re building this out. And so if you have a way to sweeten the pot with the first hundred to thousand users, I’m not sure how you would do that exactly, but you want to have them using it as often as possible so that you can find the holes where they want certain things in there. That’s gonna be crucial to the, to the success of this product. But other than that, I I like the idea behind it.

Thank you. And and that’s exactly the whole purpose of having the beta test.

And based on their existing relationships, they’re quite comfortable they’re gonna be able to get that that, I’ll call it a thousand home prints done, with the existing really because the company does have a good brand of reputation within, Sutton Realty and those six thousand real estate agents.

And, they all want fifty of the six thousand to to do this. And so they’re gonna go up to the top end, producers within the Sutton, network to to get that that that fifty going and then ten to fifteen each kind of thing is an expectation.

So they’re quite comfortable being able to ramp up, but I agree with you. That’s absolutely a critical you know, back to the business model. Right? It it’s getting that traction, getting getting the the referral networks primed and ready to go, and that they want through this or incentive to do this.

Right? And I’ll come back to that in a second. And then them actually walking the talk and actually getting it out there. Right?

And then it falls on from there. So so the incentive for the real estate agent to do this is the stickiness factor for their for their perspective. So if you’re a real estate agent, you wanna always be looking for adding value to your clients that no one else does in terms of why it’s beneficial to work with you. And so this becomes one of those items.

Right? It doesn’t cost anything to to the homeowner.

And, you know, what we can provide you with assistance to get your mortgage in place to, you know, anytime you wanna know what your current value is, you you you can check on your dashboard, you know, all those kinds of things. And, again, this doesn’t cost you anything, mister Homer or miss Homer.

Yeah. And the thing that inspires confidence in me is the fact that these guys have such expansive experience in the real estate space. They know what their clients want and what they need.

It’s it’s just really gonna come down to how easy is this platform to use, how clean is it. Right? Do they like to use it?

Can you can you stay in front of them year round with this product?

And those are all the things you’re gonna be looking for in the beta test, for sure. And the other thing I’ll add to in terms of of the you know, back when I go through the start up process, you know, I I did the business plan and the financial model, all that kind of stuff. At the end of that exercise, I ask myself, what are the key things that are gonna challenge this company’s success in the next five years? And then of those things, what areas do I need help with in terms I don’t have enough knowledge?

And so then I I I define adviser seats at an advisory table based around I call them knowledge centers. What, you know, what are the areas I want some help with? And then I populate those with the best people I can find to sit in those seats so that I have a a go through resource in each case. So you touched on one of those seats in in your comments there, which is access to the real estate industry.

To me, you know, back to number one on the on the business model, it’s not just about these guys’ networks, but their board members are also totally plugged in as well.

Got it. So when you say five to ten beta test partners, those are agents who are gonna be reaching out to ten of their clients. Does that sound right?

Right.

1. Yeah. I mean, anything you can do to increase that that that test pool is gonna be huge in the beginning.

Well, absolutely. And and speed with which that gets done.

Yeah. Exactly. Exactly. That that’s all I got for now. Good job, Rick.

Thank you. Thank you.

Thank you very much. David, Jerrold, you got some questions.

Honestly, I am so confused at this point as to what Absolutely.

I I thought at the with the opening slide, I thought it was kind of Angie’s List meets CARFAX.

And but but then we got off into mortgage brokers and insurance.

And so give me I guess, if you could go back and give me the thirty second elevator pitch of of Yeah.

So take take your CARFAX idea. Yeah. Take your CARFAX idea. So but it it’s not just about it.

It’s the car you own, not the one you you don’t own you’re thinking of buying. Right? So Right. You own a car and you’ve got the equivalent of the CARFAX that has everything that’s going on with the car.

It’s accident history, when the last time I had this oil change and all kinds of stuff. Now that app, in addition to having all that information, tells you, reminds you that, you know, hey. You know, your your tires need to be changed over to the next season. And by the way, they probably also need to be replaced because it’s been three years since you last had your tires replaced.

Right? You’ve now got this many kilometers in your tires. Right? So so it it proactively reminds you as well.

And in case you’re selling or thinking of of leasing your car, here’s what your car is currently worth. It’ll do that for you, right, without you have you having to ask it. Does that explain a little bit differently?

Yeah. That does. So so so then, I guess, to go the next step. So I get that as the user. That that’s cool. You know, I I could probably go with that.

Where does the revenue stream come from? Am am I? Because you said it’s free to me. So who’s Yep. Who who’s your customer? I see where your user is, but who’s your customer?

So let me just go back up to this part right here. Right? So the bottom bar here is where the the revenues happen. Right?

So you’re gonna get seven hundred dollars from a mortgage broker every time a mortgage is is, one of your referrals, gets a mortgage from them. Them. You’re going to get a a, point five percent of the loan value when you help, arrange a, renovation loan for a homeowner. You’re going to get eighty dollars for each, insurance policy gets put in place with one of your home print, customers.

So it’s monetizing the eyeballs.

Got it. Got it. Okay. That thank you. That and now it makes sense again. I I got lost there in the middle.

No worries.

No. No. I I I think this is I I I think this is really cool. I think the consulting for equity opportunity for you is I mean, it it’s a perfect fit with with your, with with your background.

And, so I I like that.

I I guess my last question, just in terms of the in terms of the initial round, are are there any, are there any valuation caps or anything on the on the conversion of the node?

So it hasn’t been done yet, but the way I’ve typically done them is I would answer that no. What I’ve typically done is so in the US, the Angel community relies on what’s called the safe note, which is exactly that. Right? So whatever the price is for the next one, I got a twenty percent discount, for example, to that pricing.

What I’ve done is use a convertible note, not a safe note, where I’m gonna pay the I I being the company. I’m gonna pay, I’ll call it, two and a half percent a month accruing interest. So the longer you hold your note between when you make your investment and when that that conversion happens, you keep accruing two and a half percent of a month on the face value of the note. So effectively, you’re getting a discount to the future round based on that accrued accrued, interest.

So reward people coming in earlier, than later kind of kind of thing as opposed to everybody getting twenty percent no matter what. The other thing on those notes that that just to compare them with the US, security, safe notes don’t ever expire.

Right? They can just sit there. I’ve been in companies in the past where, you know, it took a lot longer and the company got in trouble because of that, to to find that qualified round. And in the meantime, the angel investors original angel investors were, you know, left hung and hang his right with no place, no recourse on anything. The convertible notes have a mature date. So you would typically get, I don’t know, twelve to eighteen months to get that qualified transaction round done, or my note expires and I want my money back.

In which case, that typically puts the company in a refinancing situation.

Yep.

Cool. Alrighty. We’ve got about, seven or eight minutes left. Let me go back. Actually, let’s go to, Patrick Alvarez and John Churinski.

Super quick. I just wanna echo something that Carter said. So I’m currently a product owner at a cybersecurity company, and I realized that the reason why we’ve lit we’ve lost some of our biggest, contracts to our competitors is, it it’s it’s yes. We have on par technology, but the UX design isn’t as favorable for other, customers or or prospects.

Right? Because in order to grow this company, yes, you you you mentioned it. Right? You you need you need to leverage those partnerships.

You need a strong or robust, sales team, but it is gonna be how much time do customers wanna spend and actually keep whatever software this particular software or application.

So, we had to go through multiple, iterations. So and then also really identifying what is our USP or our unique seller proposition when you look at some of the top two to three big guys on the market. So, yeah, I just wanted to say that again at the UXP or the or or the application and then seeing how the other, big guys, what their, user experience also looks like is gonna be the the the the differentiating factor, because you guys might have better technology. But if the customer thinks that, like, you have twenty five hundred features and they don’t know how to use any of them, like, and it’s just the last thing, like, five clicks to get to some place versus two clicks. Customers, for whatever reason I mean, I think we we we start to realize that too. They they definitely love that. But, yeah, that’s that’s about it.

Yeah. And and so on the user experience, point, first of all, you know, these guys aren’t techies, right, in the sense of, this is not gonna be led by technology people. This can be led by user experience. And and, so I I I so I have not seen the product, so I can’t speak to it, directly that way.

But so I get comfort to know that it it it’s being designed by users as opposed to technology people. And, again, this whole what you just touched on is the whole purpose of why they do an alpha and now a beta to pretest it in in in very serious to get the bugs out of that that experience as much as possible before they go live. Right? So so I I’ve got faith in the process a little bit.

The second thing in terms of of, comparison to what’s available in the marketplace, as I was showing in the competitive mark, slide earlier, the I mean, I’ll just scroll back up to here for a second so I can have it in front of me while I talk.

You know, there are other ones out there. Right? But they don’t have the same offerings. Right?

And the one thing I always have in my mind when I see charts like this from companies is, okay. This list of benefits, they they’re reported to you because you got all the green check marks, but maybe customers don’t care about them. Right? That’s why none of the other guys have them.

But if you look at what what they hear, they touch on what you were just raising your comments. Right? The ease of the use of the the the one click approach to it kind of stuff. The information comes to you so you don’t have to go hunting for it.

Right? So just that that ease of the experience are all touched off in in that list of benefits. So so they’re you know, back to the fact that the product is being designed by users, not techies, I I think is important. And when you look at comparisons as well, I never take it for granted.

That doesn’t mean there’s gonna be a forever comp advantage. It just needs a right now advantage, and because the competitors could be addressing those shortcomings as well. Right? So you but you’ve got a good head start.

Thank you. Great. John Siminski.

Okay. Yeah. Rick, two quick comments. I know this business is gonna work good for you because years ago years ago in Denver, I ran a, small home fix up company, and my referrals all came from brokers from their sellers who wanted their houses fixed up. Then the second part is, there’s a company called Credit Karma, and they give you free Ecos score and credit monitoring. And in exchange, if you buy a credit card through them, they get a commission.

And they’re very successful, and it’s kinda similar idea. That’s all I have to say. Right?

Yep. Thank you, Jonathan. Absolutely correct.

Great. Okay. Thank you for that. Let’s go back to chat. We’ve got four minutes left.

Okay.

What else have we got from you guys?

Crystal Anderson had a lot of really positive thoughts and comments on this. Crystal, do you wanna unmute and, join the join the conversation? You still on the call?

Nope. Okay.

She gone. Let me go back through. Steve Holland, you were on a broker call for the first deal. What are your thought think about this?

Yeah. I gotta love the broker calls, man. Always selling brokers.

Yeah. This so this is interesting. Obviously, VC, I mean, I have a lot of questions about liability.

You know, when when something goes wrong and people start pointing fingers, how do you actually claim things? What what is the process to be able to claw back if something needs to get rerepaired? You’re trying to as I understand, you’re trying to track the the the renovations and things that are being fixed in the house, for insurance purposes. So what if something goes wrong?

Is this a is this this is there a liability kind of closely?

So so think of it like a marketplace.

Right? So you’re not you don’t there’s no liability for the marketplace vendor itself. It’s between the the, the home maintenance person, right, and the homeowner. Right?

So there this isn’t ending designing a contract between those parties. They’re just introducing them. And it’s gonna be just like the insurance broker, for example, all we’re gonna do is is make a referral. This homeowner is looking for an insurance quote, or this homeowner is looking for a mortgage to be put in place, or this homeowner is looking to have a, a, you know, a bathroom renovation done.

After that, it’s between the parties. So there there’s very little liability for this company in that transaction.

Got it. Yeah. I I mean, first of all, kudos to you, Rick. It it sounds like you’ve done this before. You’ve done this quite a bit, and you have quite the pedigree.

You’re you’re definitely more gifted in the VC space than I am. I’m still I’m with David Giraud a little bit. I’m still trying to wrap my head around all the parties, what the avatars are, what their motivations are. I’m I’m just not quite sure.

And and and for your contribution, I mean, I I love the the sort of reverse earning where you you start with the equity and then you sort of prove yourself, throughout the process. I think that that’s a smart way to go about consulting for equity. I would be interested to see if as the money starts to come in, if there’s other ways to get paid on bringing, capital to the table. I I like getting paid cash for doing work that I do instead of just being told that if this works, you get paid.

And if it doesn’t, you sorta ate your time. So, I’d say keep pressing into it. I I I just think about the under other industries. Why hasn’t this worked in the insurance space?

I’d love to have, for for personal health, I’d love to have all my records consolidated into a single platform so that my doctors know, when I go from one to the other, what my records are. I just always feel like there’s other powers that be that are deincentivizing the consolidation of information, and I try to understand why those why those things have not been developed and put in place and what is what has kept this from actually getting to market, you know, before. So, anyway, good good luck with this. I wish the best for you.

Thank you. Awesome. Alright, guys. So get your votes in.

You know, deal one or deal two, obviously, very, very different. So probably not really fair to do a compare and contrast. You know, deal one was a solid, full acquisition.

You know, deal two is a a very innovative, high growth consulting for equity play. But, yeah, it’d be interesting to see, you know, whether you’re more aligned to deal one or or deal two, but, you know, I don’t think we can read, you know, kind of much into that. You know, what I wanna do in the last minute is just, just hit me up in the chat here with what’s your single biggest takeaway, from this call. Obviously, there’s a lot of stuff that we’ve been through today about the event, about deal one, deal two, both absolutely, great deals, but in different ways.

So, yeah, just hit me up, guys, in the chat, through the group. What’s your single biggest takeaway, and we’ll go through and reveal those. So, takeaway from John, quality of the presentations are tremendous. They are.

Carol loved the TAM the TAM Samsung.

David, maybe you and I can do a little training on that going forward if, if the guys wanna learn that in a bit more detail.

We’ll do a we’ll do a live, we’ll riff on a on a particular business to do that for you, which Yeah.

Let’s do that.

Yeah. David Gerard was seventy ways to be deal maker. That’s true. Jerry Barber about mindset.

Marcel, pitch decks tell the stories. Red light, green lights confirm the thesis.

That’s the quote of the day, guys.

Pitch deck tells the story.

Red light, green light confirms the thesis. He’s talking about the one sheet. I love that. I absolutely love that. That’s amazing.

Lisa Harvey, the thinking creativity is tremendous. Ollie, you can find seller listed deals on broker sites.

Is the juice worth the squeeze?

Clive, great presentation from Rick. Jennifer, love the learning. Still a bit green, but love to learn. Well, Jennifer, you’re in the right room. This is where we can teach you all of this stuff. It’s amazing.

Loads of TAM, Samsung, which is really cool.

Ken’s agreed. MedSpa’s are worth considering. Ken’s based in California as well, guys. So, Olga, you might wanna reach out to can I know he lives there? Jared Clark loves the ways to structure consulting for equity deals.

Steve Holland, who’s one of our gangsters, he’s learned to call Nick for my next VC, Saskia. I think he’s talking about Nick Bradley. Right? Yeah.

Which is pretty cool.

Yeah. Lots of lots of comments on here.

I love the comment from Christian. Biggest takeaway, everyone keeps upping their game on the presentations, and and I I would absolutely agree with that. I think the way you guys are pitching, you know, you you’re gonna blow investors away with the right deals. So that’s that’s my biggest takeaway, just how good these presentations are, how well you guys know these deals, how well you guys can answer these questions.

That’s, that’s the best thing for me. So love it, guys. It’s been a great call.

I’m, I’m not gonna be on the, foundation call, tomorrow. Kendall’s gonna be squaring that away with who’s gonna take that session. You’ll never guess what I’m doing tomorrow. Right?

I have to take my Florida driving test. Like, what the fuck? Right? I’ve been driving for thirty five years.

Right? I bought a car in the US in Florida, and I still only have my UK driving license. So my insurance company have said, dude, you need to get a Florida driver’s license. So I went to DMV, and I said, hey.

Here’s my UK driving license. Here’s my super clean UK driving record. I need a Florida driver’s license. They’re like, well, dude, you gotta take a test.

I’m like, why? Like, my children can drive. Like, what what the hell? No. So I’ve gotta I’ve had to study this book to learn all the, like, signs, and then I gotta take a test tomorrow.

So that’s that’s what I’m doing. And then my my business partner, Ross Turner, in my econfolio venture, he’s flying down this weekend with his wife, Jess, who a lot of you met at the event. They’re gonna be hanging in in Space Coast fighter with me all weekend because there’s a space launch. We’re gonna go and stand on the beach tomorrow evening with a beer.

And, I don’t know if you guys have ever seen a rocket take off from Cape Canaveral, but the freaking beach shakes. And you’re holding a beer, and the beer’s shaking.

So, that’s gonna be pretty awesome. So, I won’t see you tomorrow, but I will see you on Monday for the quarterly, Protege review and kickoff. Got some really cool new stuff that we wanna, share with you guys. Obviously, announce all the winners and the prizes and the deals and all that great stuff. So have a great rest of your day and week. I will see you guys on Monday.

I’m not sure who’s taking the, the training tomorrow, but it will be somebody. So, well, we’ll get back to you on that through circle. But have a great rest of your week, guys, and I will see you guys soon. Until then, bye bye for now. Bye, guys.

So I hope you enjoyed that deal review. Definitely subscribe to this channel. Hit also hit like and share so that you’re getting the very best content from me in real time. Every time I wanna announce my deal of the week, I want you to see it so that you can understand it.

And what’s interesting is the more of these deal reviews that you go through, you’ll start to see the patterns. You’ll start to see how seller psychology and valuation and deal structure all kind of combine. You’ll start to see common patterns when we look at the financial analysis. You’ll start to see common patterns and kind of red flags and what the growth and exit opportunities might be if you bought a business like this and you took it forward into the marketplace.

So definitely keep watching these, and I will see you soon for the next deal review. Until then, bye for now.

Hey, guys. I’m Karl Allen. I’m the founder of deal maker bot society. I’ve done tens of billions of dollars of deals over the last thirty plus years.

If you’re new to my channel, definitely hit like and subscribe so that you can get all of my amazing deal maker content in real time. You’re not gonna miss any of the outstanding information that I’m gonna share with you. And if there’s a question that you’ve got, if there’s something that you want to know the answer for and you want me to speak to it, definitely hit me up in the comment section, and I will record those videos for you, and I will get them on this channel as soon as possible. So love having you part of this YouTube community, and I can’t wait to serve you.

Until then, bye bye for now.