In our latest Founder Profile we sit down with Dan Summers, a highly seasoned real estate executive that has seen and done it all including building Madison Realty Group into a 150 employee business that he brought public in 1999.
He has now built a platform called eVest Technology that provides tech enabled tools for companies and individuals raising capital for either companies or real estate projects. To start the company is focused on targeting the real estate market.
Through AI technology they are making online public offerings more efficient and effective. So much so that he and his team are currently raising a $2M Series A round directly through their platform at a $10M valuation.
Check out our discussion below to learn more about the unique offering...
Daniel, you have had a long tenure building businesses in the real estate world and have even taken one of your companies public. Can you talk about how your background shaped your decision to build eVest?
It was a very daunting challenge. Technology and Real Estate do not currently coexist in any substantive way. Consequently, the decision to move forward as a singularly focused technology platform mandated intense scrutiny and third party input.
I had to rely on traits and nuances learned from decades of founding and building-out companies from cradle-to-grave. Fortuitously, I learned several cornerstone propositions that have served me well over the years:
- Make sure the endeavor is opportunistic and not already flooded with competition.
- Make sure you understand the barriers to entry.
- Make sure you can outperform any existing competition.
- Do not go into any venture under-funded.
- ALWAYS hire a team smarter than you. One $100,000 employee is far better than 2 at $50,000 each.
- Make sure your team buys into your passion, takes ownership and views their employment as a career not a job.
- Create an employment environment where people want to come to work every single day.
- Make sure your team is compensated for success. They need to participate in every single success the company realizes.
- Always keep a seat at the poker table. You can’t win unless you’re playing.
For those that don’t know, how do you define eVest as a business?
A comprehensive White Label software enhanced with Artificial Intelligence (AI) for any company or individual raising capital and/or managing investors.
What are the key differentiators of the eVest technology over other resources for real estate project lead gen, investment and management?
Investor harvesting tool. Driven by AI, this tool mines API’s for Big Data via our proprietary algorithms. It then aggregates and correlates the results to generate a unique list of prospective high networth investors.
Our SEC compliant technology eliminates the traditional PPM requirement. Our Online Public Offering (OPO) platform digitizes the requisite information for massive electronic distribution so investors can make a prudent business decision immediately and seamlessly.
Our customized CRMs offer Sponsors an ability to view real-time activity such as pledging, accreditation, doc execution and funding. Further, filtered email communication, document dissemination and automated dividend payments and K-1’s are all internally integrated.
You talk about utilizing AI in your service. Can you explain exactly what that means and how it is creating value for your customers?
The secret sauce to any investment is to generate adequate capital through the investment community. We have developed a predictive analysis tool to solve for that quandary. Our algorithms reach into private and public API’s to aggregate data and push to a predictive machine that has learned how to correlate the data into a science driven outcome i.e. unique high net-worth individuals.
Who is your core customer segment and how are you reaching this audience?
Our core customer is real estate developers, owners and operators. But don’t mistake the flexibility of the technology. It has the technical ability to cross over to most any other industry.
Can you talk about the monetization of the platform and what type of retention you see from subscribers?
We are by far the least expensive and most transparent of the white label investment platforms. We charge a nominal one time set-up fee and a simple monthly license fee that is “not” indexed to the amount of capital raised. Our Series A proforma suggests a 60% retention rate year-over-year. Conservative…yes but we plan for the worst.
What is the plan for this business from an acquisition / IPO route? If it is an acquisition what type of strategic investors do you think would be interested in this business?
Frankly, I can’t predict the flavor of the day 60 months prematurely. I can however predict the versatility of the platform and to whom it can and will serve. An ideal candidate is a Blackrock, Charles Schwab, Wells Fargo kind of user. They have thousands of RIA’s advising thousands of clients on investing. My platform will eventually have hundreds of investment opportunities all serviced under a singular portal (RealtyeVest). Kind of a buffet. A one stop shop for their clients.
Do you know the type of revenue or EBITDA multiples that similar types of businesses are able to achieve in acquisition?
Yes…Tech companies trade at a 10-12 X EBITDA. Our proforma indicates a $9,000,000 EBITDA EOY 5 resulting in a $90,000,000 valuation.
Currently, you are raising a $2M series A round via RegD 506c on your own platform. Can you talk about the decision to raise capital from accredited investors online rather than go after a more traditional round of capital?
Online investing IS the new traditional. We have gone to great lengths to create our Online Public Offering (OPO) technology so it would be insane not to utilize what we created. We “believe” this process is the Modern Day Syndication process already displacing the traditional Private Placement Market.
What I love about Dan is that he understands the power of raising capital online and he is working to make the capital raising process more efficient for everyone.
I could see a world where we begin to see more companies raising via platforms such as Wefunder and SeedInvest leaning on this type of technology to help them have more successful campaigns.
About: Chris Lustrino
A Boston College Eagle for life, on a mission to democratize startup investing for all people at KingsCrowd, with a passion for Fintech, investing, social impact, doing well and doing good, and an avid runner, cyclist and writer.