In a special corner of co-working mecca 1871, where you might hear mutterings about cap rates and cash flow, is elmspring, a three-month accelerator for real estate startups with potential to disrupt the market in a big way.
The real estate industry is on fire in terms of venture capital, elmspring executive director Colleen O’Toole tells us, along with angel investment and out-of-the-box corporate collaborations like the accelerator’s recent partnership with multifamily giant Waterton Associates. Just look at some of the participants in its first class. College Annex, a college rental site, is already profitable and used at 19 universities, while ReaLync snagged $300k in seed funding and gained 2,000 users (from NYC to California) of its live virtual property touring system. It’s all about looking beyond traditional investment dollars for larger sales opportunities that provide a stable revenue model, Colleen says.
Pictured: the Merchandise Mart, where elmspring resides within 1871. Now on its second class of entrepreneurs, its startup teams include veterans of commercial real estate, residential and technology: CondoGrade evaluates the financial health of condo associations; HerbFront connects the growing cannabis industry to amenable real estate owners; PeerRealty is a crowdfunding platform for middle-market real estate investments; Megalytics helps lenders evaluate financial risk; and CampNative will find you the perfect campsite. The biggest challenge for them, learned from the first class, will be finding ways to pivot and address feedback from prospective clients, customers and investors early on, Colleen tells us. (Pivot is tech talk for quickly changing your strategy or business model.) You heard it here first, expect mega-IPOs (and Aaron Sorkin-penned biopics) from these companies in a few years.
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