Female Entrepreneur Scaling a PropTech Venture with Over $40M in Funding: PunchListUSA CEO Min Alexander (Part 4)

Sramana Mitra: How did you finance this company?

Min Alexander: Earlier on, there was a lot of seed funding. Early seed investors like Meeting Street Capital, Idea Fund, and Venture South are still very active with growing portfolios.

Sramana Mitra: Are these North Carolina investors?

Min Alexander: Idea Fund is in Raleigh. Meeting Street is in Charleston where we’re based. Venture South is in Greenville. One of the opportunities in a business like ours is fieldwork requires investment and full-time employees upfront. To be able to scale, you have to create an infrastructure. The investment at seed was about $4 million in total.

As we started growing, our burn increased. At that time, our burn was increasing from $300,000 to $500,000. We were also in a transition where we had convertible notes. We weren’t quite ready for a full Series A raise. I also invested personal funds. In terms of returns, it’s probably the best thing that I did. Our leadership team is personally invested.

Sramana Mitra: My question is a bit earlier than the phase that you’re describing. The three investors that you talked about who gave you the seed funding, what did you have at that point to raise that money?

Min Alexander: Most of it was concept financing and then the Carolina One partnership. A lot of the cold-calling that we were doing to add brokers, we would able to negotiate marketing agreements. While it’s not recurring revenue and it’s no guarantee of revenue, what it said was I’m open to your business and you’re welcome to market to my agent base. That was something very tangible for us to target.

Sramana Mitra: Carolina One is a brokerage firm.

Min Alexander: Yes.

Sramana Mitra: So they were both investors and marketing partners?

Min Alexander: That’s right. To have that vote of confidence from a very early investor and a business tied to it, that’s a model that we have replicated throughout our Series A.

Sramana Mitra: How did you meet Carolina One?

Min Alexander: This was an existing relationship with Jimmy Banyas who is our Charleston sales lead. He’s a brand ambassador for us. Jimmy is also a licensed broker.

Sramana Mitra: This model of working with brokerages as both investors and marketing partners is something you’ve replicated?

Min Alexander: Absolutely. Funding got a little challenging for all early-stage companies over the last six to nine months. As the economy has faced some headwinds, venture capital was a lot more scrutinized. Earlier on, we had our eyes set on, “We’ll have venture partners and we will have aggressive growth targets. As the market started softening and getting more constrained, we started going back to the partners we already worked with.

Home Depot is our single-source supplier. We approached them and said, “We are raising our Series A and we’d like to get your thoughts on this investment.” They are now a major investor. They also hold a Board observer seat. The second one is our largest institutional client. They’re a significant real estate owner, operator, and buyer. They’re also a major investor. Then the third is the broker partner – Second Century Ventures, which is the investment arm for the National Association of Realtors.

Sramana Mitra: I really like the model of having investors who are deeply savvy in your domain and are able to contribute meaningfully. It’s a very savvy way to build a business.

Min Alexander: We needed to finish this raise and close it. When we sat back and thought about our contingency plans, that’s when our team had the aha moment. It has worked really well. The two lead investors were a part of this journey for our Series A raise very early on. Sweet Water Private Equity – they believe in what we are building as a marketplace, especially the data component.

The second co-lead is Morpheus Ventures out of Los Angeles. They’re super experienced in PropTech. They were the early investors of Skype. They also understand consumer businesses. Then you had three strategic partners – Home Depot, the large single-family operator, and then Second Century Ventures. We have a 360-degree-view of our industry. They can help us not only with network and growth but also make sure that we don’t have blind spots.

This segment is part 4 in the series : Female Entrepreneur Scaling a PropTech Venture with Over $40M in Funding: PunchListUSA CEO Min Alexander
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