Raising Money for a SaaS Company in an Industry Slow to Adopt Tech

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Raising Money for a SaaS Company in an Industry Slow to Adopt Tech

Originally posted on Powderkeg.co on 8/10/17 by Keith Kleinmaier

Anytime you have to ask others for money, it’s a serious process. It doesn’t matter if it’s for a youth sports organization, a local grass roots event or, in our case, a Commercial Real Estate Tech (CRE Tech) startup. Especially when the industry you are serving has been slow to phase out legacy software and adopt new technologies. Before we get into our specific case, a little background on Tenant Tracker.  

Tenant Tracker is a cloud-based application for Commercial Real Estate developers, landlords, owners and eventually tenants. Our software is taking clients out of spreadsheets and into a robust, collaborative system, allowing team members to track all of the critical dates, timelines, contacts and process from Letter of Intent to Tenant opening for business. Historically, this has all been done in spreadsheets, email and notebooks.  

When we took TT to market, we validated it first with a few clients. When we started our fundraising process, this ensured that we were not only validated in the marketplace, but we were generating REAL revenue. Unless you have a unicorn on your hands, this is imperative in raising funds, especially in an industry reluctant to change and slow to adopt new technology.

In order to ramp up our development and pay our team to secure new business, we set out on a seed round in the $500k range. We were poised to succeed in Indiana, approved for a Venture Capital Investor tax credit for in-state investors, and going to market with a convertible note round, which was easy for first-time investors to grab on to.  Our focus initially was a small circle of friends, family, local tech players and local CRE industry folks. Our plan was set.  I thought our round would be wrapped up in less than six months. But oh, was I wrong! Here’s what I learned throughout the process: 

Roll Off the Rejections, Learn & Proceed

When I was a Freshman at Indiana University, I wanted to earn some ‘weekend money’ like everyone else.  So I got a job as a telemarketer for the school, calling alumni and asking for money.  Most people hated it, I loved it.  I looked forward to speaking with alumni and learn about their adventures after they left school.  I built a relationship with each call, except for the ones that hung up on me before hearing my pitch.  This was a job that if you got 10-20% of your calls to donate, you were a leader.  This means often times 90%+ of your efforts ended in: NO!  Well, I was the weird one in the group and not only enjoyed it, but continued working in the office my entire undergrad career. I worked my way up into management and my first two jobs post-graduation were managing large university fundraising centers. In these roles, I dealt with and taught students how to handle rejection and raise money.  It’s crazy the parallels I saw in raising money for a SaaS startup in CRE.

If you are raising money for your startup, don’t get discouraged by all of the rejection.  Review each one post-op, and gain 1-2 nuggets from that experience. In my case, I learned more and more about what investors were looking for and dove deeper into why they were investing in the first place.  

Take each objection as an opportunity. Build the ‘NO’ relationship as much as possible, because some day, that person who rejected you might need help from you. Or they might have a referral for you. Or better yet, they might be interested in your next round.

Educate First Time Investors

Early on, when our circle of potential investors was smaller, I kept getting rejected.  I realized it might have been less about our company or our team and more about the fact that I was pitching to first time tech investors. Add on the layer of CRE industry, and I now realize that I was setting myself up for continued rejection.  My approach was all about our team, technology and our solution.  That is all important and is continually driven into founders from all angles. But I skipped a valuable step of helping educate the investors on the process and what they were getting into.  This eventually helped us bring on multiple first time tech startup investors into the round.

Your Industry + Technology = Scary?

Our industry of Commercial Real Estate has traditionally been slow to adopt technology.  However, there has recently been a flurry of CRE startups raising significant dollars, mostly on the coasts.  While this has been great for CRE tech in general, it was still difficult to convince Midwest investors to put their arms around CRE tech.  The feedback I received from seasoned investors and larger Funds hit hard: come back when you’ve developed a significantly larger revenue base of customers.  Some of this feedback mirrored the master strategy of certain investors and funds.  However, others felt for this industry, they didn’t want to invest until they were confident CRE companies would spend the money to upgrade their technology.  This thinking is transferrable to other industries battling legacy software and slow-to-adopt philosophies, such as FinTech, Health Care and Construction.  My advice is to work with a couple of strong clients early on to help dispel this myth.  There are companies out there willing to change, and bringing them on board early will help your investors stay in the conversation.

Ripe For Disruption

Continue to hit home with potential investors on how your industry is ripe for disruption, if it applies.  CRE has so many points in the process that still rely on spreadsheets and outdated software, it has been an industry ripe for some time.  However, investors don’t want to put their money into the 10th company doing the same thing as the 9 before them.  So our mission was to remain laser focused on the niche our software helped serve, and this helped our investors see how we could disrupt our segment of the CRE industry, rather than following many disrupters before us and crossing our fingers. This allowed our investors to understand our path to customers and revenue, and eventually jump on board our round.  

In the end, I learned more than I could have imagined, and we ended up maxing out our seed round at $600,000!  We are eternally grateful to our initial seed investors and their confidence in us has helped us build momentum as we continue through 2017. 

Learn more about Keith and what his team is building at Tenant Tracker here.

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VisionTech Angels Adds Tenant Tracker to Its Expanding Investment Portfolio

VisionTech Angels Adds Tenant Tracker to Its Expanding Investment Portfolio

VisionTech Angels, one of Indiana’s most active angel investing groups, has invested in Indianapolis-based startup, Tenant Tracker, increasing the stable of companies in its investment portfolio to 24. The VisionTech Angels investment was matched by Elevate Ventures.

Tenant Tracker is tenant coordination and build-out software for the commercial real estate industry that transfers paper-based processes to the Cloud, resulting in significant gains in efficiency. The solution, which was created at DeveloperTown, is the brainchild of Mike Kelly, managing partner of DeveloperTown, and local commercial real estate broker Keith Kleinmaier, who serves as Tenant Tracker’s chief executive officer.

Kleinmaier says the investment will have a profound impact on the company. “Until now, Tenant Tracker has relied primarily on friends and family to fund our software development and early commercialization efforts, including an extensive beta test. By closing this $600,000 seed round of funding with VisionTech and other investors, Tenant Tracker can break out of our ‘quiet phase’ and dial up our sales efforts. The market is ready and so are we.”

VisionTech Angels Executive Director Ben Pidgeon said Tenant Tracker attracted a good deal of interest from its network of angel investors in Indianapolis, Bloomington, Fort Wayne, and Lafayette. “Tenant Tracker has the potential to transform an untapped market, commercial real estate, that is very detail oriented and still tied to paper. Our investors liked that Tenant Tracker has a good customer base that is successfully using the software and are validating their revenue model; it’s very impressive in an early growth company.”

VisionTech Angels also appreciates that Tenant Tracker’s roots are grounded in both the commercial real estate and tech industry. Kleinmaier is a licensed commercial real estate broker and worked in the technology industry before joining Retail Realty in Fishers, Indiana, as president. Kelly, Tenant Tracker founder and DeveloperTown managing partner, has helped create, advise, and launch a number of tech companies.

“Tenant Tracker delivers a focused user experience,” explained Kelly. “The software allows users to track property leasing deals, manage construction and build-out status, see detailed property reports, access tenant data, and share status reports. Because it’s Cloud-based, the information is available anywhere, a true benefit to our users who are able to access Tenant Tracker from the project site or back in the office.”

Added Kleinmaier, “With all of this data in hand, commercial real estate developers, owners, and landlords have the ability to be more efficient, move tenants into properties sooner, and in turn, add revenue to the bottom line. Good-bye spreadsheets!”

 

About VisionTech Partners I VisionTech Angels

Founded in 2008, VisionTech Partners is a privately held company that links investors to high-potential, early-growth companies. Based in Indianapolis, one of the nation’s most dynamic startup cities, VisionTech is where inventors, entrepreneurs, investors, universities, and strategic partners convene to share, fund, and launch innovative technologies and companies. VisionTech Angels has chapters in Bloomington, Fort Wayne, Indianapolis, Lafayette, and an affinity chapter for physicians, AngelBom.

 

About Tenant Tracker

Indianapolis-based Tenant Tracker, is the creator of a cloud-based tenant coordination and build-out software of the same name for commercial real estate companies. Tenant Tracker makes it easier for users to track deals, manage construction status, see detailed property reports, access tenant data, and share status reports. Tenant Tracker integrates with current front-end and back-end software, allowing users to seamlessly connect data, while minimizing errors and duplicate entry.

 

Contact: Melanie Lux, mlux@luxandassociates.com, 803.331.4794

4 Attributes of a Successful Commercial Property Investment

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4 Attributes of a Successful Commercial Property Investment

Getting ready to buy your first commercial investment property is really exciting. You’ve been saving to get to this point and finally you’re here. However, as a first-time investor, this excitement could lead you to make rash decisions, which would be detrimental to your cash flow in the long run.

To avoid making impulsive decisions, many top investors recommend that you always get a third party to view your property before buying and that you also view the property in the same way an average tenant would see it. If you were a tenant, would you want to lease that space?

Investors simply cannot afford to be complacent concerning the situation of their properties because if nobody is prepared to shell out rent for the space, they're going to find themselves in trouble. In order to reach 100% occupancy in your property, it is important to take into consideration what tenants want from a property. 

The best way to keep a tenant in your property and paying rent is to ascertain that they have nothing to repine about. According to property veteran Margaret Lomas, there are a number of simple ways to keep current tenants happy.

“What commonly sends a tenant looking elsewhere is when there are maintenance or desperate renovations that are left unattended, and when they sense they may just pay the same elsewhere for a space in better condition.”

To get optimum rent and attract the perfect tenants you should know just what tenants look for when they are trying to find a property.

1. LOCATION

Location is, quite famously, one of the top things to think about as it pertains to making a purchase. Research your facts about different local market segments, to check out the ones with strong earnings potential and strong demand. It is also important to consider not only the market in which your property is located, but its position with regards to local amenities and retail competition. This is often best looked at in relation to the type or kind of tenant you want to attract.

2. access

It may seem perverse but usually tenants tend to be more concerned with logistics than the actual address. The key commercial real estate components include ingress and egress access points, proximity to stop lights or intersections, and proximity to major roads to name a few. The most important factor generally tends to be the location and how easily accessible this location is for the tenants customers.

3. exterior condition

Tenants love whatever looks or seems new. As a commercial real estate property owner, you should take pride in things such as parking lot condition, signage, roof conditions, and landscaping. If all of these are in great condition, you are more likely to attract local and national brand-name tenants. 

4. Tenant improvement

Every tenant understands that the fact that another business leased the space before them, nevertheless, they don't want to see or believe that. Turnover is enviable in retail commercial real estate. Being able to manage this process in an organized fashion is critical to your bottom line. Using new tools such as Tenant Tracker (TenantTracker.net) allow you to streamline this important process and move tenants in happier, and sooner. 

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Tenant Tracker Makes A Splash At Summer Conferences

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Tenant Tracker Makes A Splash At Summer Conferences

 The last month has been tremendous for Tenant Tracker in getting the message out to the industry.  In May, we were fortunate enough to be a part of Disrupt CRE Chicago, a conference that put some of the brightest and best minds in the Commercial Real Estate & Tech space together in one place.  In June, Tenant Tracker was an Exhibitor and Spotlight Presenter at CRE//Tech in San Francisco.

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Verge 4/28 Pitch Night Recap

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Verge 4/28 Pitch Night Recap

Wow. What a thrill to be a part of Verge’s Pitch Night at the Speak Easy.  I can’t thank Matt Hunckler, Erika Kotterer and emcee Danielle McDowell enough!  What I love about Verge events is the vibe and energy from everyone involved.  From the volunteers setting up to the teams pitching to the awesome attendees, it was electric. 

 

I was fortunate enough to be able to pitch Tenant Tracker alongside our Founder, the one and only Mike Kelly.  Tenant Tracker was one of three tech companies to pitch to the crowd and in front of four talented sharks: Angel Morales, Founder & Chief Innovation Officer of Smarter HQ, Derrick Braziel, Co-Founder and Managing Director of MORTAR, Cincinnati, Erica Martin, Technology Investor and Vice President at Warburg Pincus and Ryan Phenninger, Chief Technology Officer at 250ok.  All had great questions and provided tremendous insight after the pitches.

 

As excited as I was to be in front of the large crowd to pitch Tenant Tracker, it was an honor to be on the same stage with the two other Pitch companies for the night.  First, Noblesville High School Senior Zach Baker pitched his cool app, Pass Whiz.  Hard to believe he started this in study hall at the age of 15!  We will see great things from Zach for many years to come.  Rounding out the night was the very cool story of locally headquartered Odyssey, a social content platform that just announced a $25 Million round of funding 24 hours before the event. Congratulations, Odyssey!

 

The night ended with great lessons and stories from serial entrepreneur Robert Harris.  The crowd learned a lot from his various success stories and how he got to where he is today.

 

Thanks to all that came out to the event at the Speak Easy. I enjoyed interacting with many of the attendees and sharing the story of Tenant Tracker.  And if you made it this far, I’ll make my plug again that we are hiring a Senior Developer – contact careers@tenanttracker.net if you are interested. 

 

It was a perfect setting for great pitches and networking.  Looking forward to the next Verge event…

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Tenant Tracker Is Hiring A Senior Developer!

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Tenant Tracker Is Hiring A Senior Developer!

We are excited to announce a job opening at Tenant Tracker for a Senior Developer role.  Our traction in the marketplace over the last six months has fueled our need to expand our development team.  It’s an exciting time to be a part of this Commercial Real Estate Tech Startup.

Our offices are in the heart of South Broad Ripple at DeveloperTown.  Know of some rock star developers you’d like to refer?  Check out the listing below and reach out to us at careers@tenanttracker.net.

What is Tenant Tracker?

Tenant Tracker is a SaaS application improving the process of tenant coordination (TC) in the commercial real estate (CRE) industry. Most tenant coordination process relies solely on spreadsheets and e-mail. We’re changing that by automating the process and delivering tools that provide new insight into the process and data behind the TC process.

What do we offer?

We’re a startup with a culture defined by its early members, which means you can help define our culture. We offer full benefits and flexible schedule. We care more about what you’re doing than where you are or when you’re doing it. We need to collaborate to deliver high-quality services, so you’ll need to work the hours of a normal human being. We all have lives and other responsibilities, so we’re flexible.

What will you be doing?

  • Help to define the product that improves the lives, and let's be honest, profits of our customers and their employees.
  • We have big plans to further change the game in both tenant coordination and CRE tech in general. You’ll be a key component in making those plans possible.
  • We’re growing. In order to grow, we need to improve some of our processes that are holding us back. You’ll be working on moderate to advanced application architecture.
  • We also have customers. We’re a small team so we share the responsibility to make sure our customers are happy. You’ll primarily participate in this activity by gathering and implementing customer requirements. Common customer requests are reporting and integrating into external systems like Salesforce.
  • We deploy every Wednesday and so will you.

Who are you?

  • 5+ years experience in building, maintaining and growing SaaS applications.
  • Expert-level knowledge of Ruby + Rails.
  • Language flexibility. We’re primarily focused on Ruby + Rails, but we use the best tool for the job and the core language or framework may change as the application evolves. We recently added React to the stack, so you may need to get a little familiar with it.
  • General web development skills in HTML, CSS, or JavaScript.
  • Experienced server administration: Linux, Postgres, AWS platform
  • Experience with Postgres and database architecture.
  • We test with Rspec. You don’t have to BDD or even TDD, but you must write tests.
  • Version Control: Git

If you feel you are a good fit to the team, please contact us at careers@tenanttracker.net.

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Welcome to Tenant Tracker!

It’s time to launch the official Tenant Tracker Blog.  If you’ve made your way to our corner of the world, thanks for showing up.  Our goal is to open a window into the behind-the-scenes happenings of a startup, provide detail on what Tenant Tracker is all about and share some CRE/Tech insights along the way.  We hope you enjoy this and share our story with others.

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