Internal Documentation

Seed Raise

September 8, 2024 (Review of Week EOY-16)

Hi, everyone! Thanks Jason and François for the guest memos!

The Seed Raise is officially started! I met with the first investor this week (the venture arm of the eBay founder’s social impact foundation). I had spoken with this particular investor over the summer, thanks to an intro from our friends over at Eli, and the conversation was pleasant enough – we walked and talked in Fort Greene Park. It seemed like our story won him over enough that he wanted to figure out the best positioning for the deal screening meeting. That said, he had reservations about his ability to get buy-in: To hit the revenues we’re projecting out in our model, we need to be able to convert the deal pipeline we get via our institutional customers into transaction fees. We haven’t yet made that connection of the pipeline building to the contractor transaction. We’ll see how other investors feel about that.

Here are some things I think everyone should know about our raise:

  1. We’re raising $3M to get to a gross revenue of $10M by end of 2026
  2. This is a priced round, which means that investors who hold SAFEs now will convert to holding real shares in the company (along with the new investors)
  3. We’ll probably be able to do a first close when we hit $2M (from lead or co-lead investors), and then we’ll raise the remainder from follow-on investors and/or NY State.
  4. We don’t have a cash problem (yet). Erika and I just did a YTD cash analysis and we have a runway of more than 12 months, including the proceeds of the JLL 0-interest loan. But if we don’t raise the Seed (for whatever reason), we would look at whether we can make it up with earned revenue in 2025, and it would probably entail some amount of economizing.

Also, starting next week, I’m going to ask Marc to report on Revenue team highlights/low-lights, Erika on Strat Growth, and Jason/François on product/engineering. I am going to be heads down on fundraising and not at all tuned-in to what is happening “at home.” Please make their task easier by pro-actively sharing what you think needs celebration / risk management

Metrics

  • Unique Buildings: 5,588 ←- as of 9/1
  • Annual Run Rate: $1.3M ←- no change
  • Monthly net burn: $60k <– based on July-first week of Sept.
  • 2024 Transaction fees to date: $6,257.34 ←- no change
  • Outstanding invoices as of today: $158,006.46

Last Week’s Highlights

  • Congrats to the prod team on Release 77! I don’t know exactly what is in it, but I assume it’s more work on GP. Keep it comin’!
  • Related Bid Related has selected the winning contractor! I’m looking forward to seeing how the Revenue team is evaluating and thinking about metrics, both in terms of process (e.g. what claims can we now make about saving time and money?) and in terms of the over-all revenue plan for 2024.
  • CPC’s GGRF RFP is in! Bright Power (Prime) let us know that the final composition of the team is BP, HR&A, BEEx, IMT, NEI, Esther Toporovsky’s shop, Elizabeth Kelly, Jessica, and KC3 – nearly all of them are people we’ve worked with and have high confidence in.
  • We’re approved for JLL Foundation’s loan! JLL Foundation’s non-dilutive investment takes the form of a zero-percent loan that comes due when we raise 10x the loan or 5 years have gone by. One interesting consequence of going through the JLL Foundation process is that I actually got to meet and pitch the partner for JLL Spark, the venture arm of JLL – they’re a Series A investor and I felt good about the conversation. The partner left out a welcome mat for when we’re able to come back to them with a national product that we can show to La Salle, JLL’s multifamily investment entity.
  • We’re one step closer to being a certified B Corp. We just got notice that we’re starting the verification phase. Kudos to Erika for pushing this along.

Any missing highlights? Please share in Slack comments.

Watch List

Hey, so, I just want to remind you that it’s as important to align on what risks we’re managing together as it is to celebrate wins. Skipping it is like skipping leg day (or so I imagine!)

  1. 2024 Revenue From the start, the revenue projection for 2024 was back-loaded, but we’re now heading into Q4 with little realized revenue in 2024. It’s not an existential threat at this point, but we need some clarity on what to expect (as well as maybe a different approach for 2025)
  2. Pace of product delivery continues to be a challenge. We have a lot in early 2025 that depends on more streamlined and faster product delivery, so this is going to need a team effort to figure out.
  3. Onboarding is improving, but still has a ways to go, especially for non-technical roles, and possibly also with what the sponsor should be owning vs. onboardee? I welcome folks sharing thoughts.
  4. Recruiting like the song says, “always on my mind”! Hopefully also on your mind!
  5. Focus we always have a lot going on, especially with external partnerships. Having a lot that competes for our attention is a risk (even if we seem to do OK balancing things).

On Deck for This Week

  • Please welcome Sara Vasilovski and Yousef Abukwaik. Sara will be joining us as a part-time contract bookkeeper/virtual assistant; Yousef is our NYU-sponsored building science intern!
  • NYC stakeholder meetings will be taking some of Jason’s, Marc’s and my time. Jason and Marc will be supporting NYC’s sustainability agency with LL97 industry working groups and I’ll be attending a Green Economy Advisory Council meeting with NYC economic development agency.
  • Horizontal Practices meeting is on Thursday. I won’t be with you, but I do have a suggestion for a topic: I think it would be interesting for folks to do an iceberg exercise on autonomy (I know, I’m a sucker for the icebergs). Probably, people have different ideas of what autonomy means and what needs to be happening below the water line.
  • It’s e-NPS time! Please make sure you respond to the survey. It’s a requirement both of our SOC2 and B-Corp processes.
  • Here’s what’s on the Company Radar

Please Leave Feedback

Please note your reaction to this update in the Slack channel. It helps us to know what is resonating, what is unclear, etc. Thanks!

  • What are your highlights / lowlights?
  • Did we miss a highlight? Something else you want to react to?

Comments

François (HOE) - Congrats on the JLL Foundation’s Loan - I’m not worried about the runway but it’s great to have more of it, and the validation + contacts from going through this process.

Jason (BuildSci Lead) - I’m glad we have a decent runway, but I hear you about the pace of product delivery. Having just consolidated a lot of disparate needs into the zenhub roadmap, we need to figure out how to make more incremental progress faster.